After a year as the new Head of Local Government Pension Schemes, Alex Orr looks back on 2023
Alex Orr leads the UK Alternatives Distribution team for BlackRock, and last year he took on the additional responsibility for the Local Government Pension Schemes (LGPS) team.
In this interview, he reflects on his first year in the dual role.
What excited you about the role of Head of LGPS in addition to your role as Head of Alternatives for the UK?
It was a real privilege to take on the leadership of the LGPS team in addition to the alternatives role. Considering the legacy companies before it, BlackRock has been managing LGPS for over 50 years and we’ve been entrusted with £24bn by more than 60 schemes and 7 pools.1 It’s an important, growing sector that has a significant role to play, in assisting our clients’ members financial security in their retirement.
Over the last few years, we’ve seen LGPS clients becoming more interested in private markets and in particular have been growing their allocations across Infrastructure, Private Credit and Private Equity. They are responding to higher inflation or interest rates and have been looking for options that will generate income. For me that means there’s a significant overlap between the two areas I work in – and I have enjoyed the opportunity to share my experience with the LGPS team and our clients.
What also resonated for me is the commitment to sustainability within the LGPS. There is a big opportunity for asset owners in the intersection between sustainability and private markets – this could be within renewable power or private equity impact. The LGPS continue to focus on sustainable investment, to first meet their fiduciary needs, and also help achieve their net zero objectives.
Having both roles is certainly a challenge, but one that I relish.
Looking back over 2023, what are your and the team’s key learnings?
Our clients had to navigate a challenging environment last year. The overarching lesson is the importance of staying close to clients – this means talking to the pools, schemes and consultants, understand what their challenges are and bring in the best people and insights from across BlackRock to find the solution. I personally appreciated the time that our clients spent talking through their objectives and developing a trusted partnership. We engaged on numerous topics from markets and investments to sustainability and policy given the consultation.
Part of our role is making sure we’re bringing the most relevant insights to our clients in thoughtful, practical ways, so they’re not inundated with information.
The retirement landscape will continue to change over 2024. What challenges and opportunities are you expecting?
Like others in the industry, the LGPS sector is facing limited overall economic growth and persistent inflation meaning new challenges are emerging. However, as mentioned the addition of alternative assets in client portfolios is helping them mitigate some of this volatility, as well as bringing other benefits such as meeting net zero objectives.
Given the LGPS commitment to sustainability, the transition to a low-carbon economy is also opening up opportunities not just to well-known sustainability investment classes like offshore wind, onshore wind and solar, but also to some of these emerging sectors around electric vehicle charging or energy storage. These areas are exciting for clients, but also important as we advance through the energy transition.
As a Managing Director at BlackRock, what single piece of professional and personal advice can you give?
I began my career at BlackRock over 18 years ago so I’ve been very fortunate to have been given lots of pieces of advice over that time so I can’t possibly narrow it down to one.
The first piece of advice would be to continually develop your network with clients, colleagues and peers. This is ultimately a people business.
Secondly, it’s crucial to be avidly curious so that you learn about a broad range of topics and insights.
Finally, work-life balance is so important; there's no doubt that being happy and fulfilled in one area helps with the other. It's so important to ensure you're spending the right amount of time with your family and your friends, and pursuing your hobbies. In my case, that often revolves around sport such as playing tennis with my daughters or playing football with friends which I manage to do a few times a week. That does mean that life is pretty busy but definitely enjoyable!
Sources
1 As at BlackRock, 31 March 2023
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