The UK’s Local Pensions Partnership (LPP) has launched its first asset-class fund, with the pooling of its founding investors’ equity holdings resulting in the number of external managers being whittled down to three as four from Lancashire County Pension Fund’s side were dropped. The new fund is a £5bn (€5.5bn) global equity fund, which comprises the pooled holdings of its main clients the Lancashire County Pension Fund (LCPF) and the London Pensions Fund Authority (LPFA). The Royal County of Berkshire Pension Fund has not added its holdings to the equity pool, as it has not yet formally joined the LPP, a spokesman at the partnership told IPE.Berkshire is to do so early next year. Around 40% of the Global Equity Fund comprises equities managed internally, with the remainder being managed by MFS Investment Management, Robeco and Magellan, according to a statement from LPP.As at 31 March, the £6bn LCPF had five external public equity managers – Baillie Gifford, Natixis Global Asset Management (NGAM), MFS, Morgan Stanley and Robeco – and two UCITS funds managed by AGF Investments and Magellan Financial Group.The LPFA, in turn, had some £2bn of exposures to public equities as at the end of August this year, with MFS responsible for around half that.It brought the majority of its equity portfolio in-house in 2014; the in-house investments stood at £1bn before the pooling, IPE understands.This indicates that four external managers lost mandates as a result of the pooling, mainly from the LCPF’s side: Baillie Gifford, NGAM, Morgan Stanley and AGF.The LPFA brought the majority of its equity portfolio in-house in 2014. The LPP spokesman said: “We have dropped some existing managers and given larger mandates to the three on the release whom we feel share our investment philosophy.”First in a seriesIts global equity fund is the first in a series of asset class funds that LPP Investments (LPPI), the FCA-approved operator of the Authorised Contractual Scheme (ACS), intends to launch, according to LPP.The local government pension scheme organisation said it was planning to launch funds for fixed income, total return and property.Investments in more illiquid assets such as private equity, infrastructure and credit are being consolidated under special-purpose vehicles over the next six months, it added.The LPP said the new equities portfolio “provides a significant reduction in overall costs for each of the founding investors while also maintaining and improving expected investment outcomes”.The entry into force on 1 November of new UK investment regulations for local authority pension funds paved the way for the launch of the global equity fund, according to the LPP.Susan Martin, chief executive at the LPP, said: “Following our FCA and ACS approval, we have been waiting for the government to change the LGPS investment regulations. There are now no barriers to physically pooling our assets and launching the fund.”The LPP is one of the eight local government pension scheme pools that are at various stages of development in the UK.Like the London CIV, it pre-dates the government’s instruction for administering local authorities to pool pension scheme assets and is relatively far advanced.It obtained FCA approval in April 2016, at which point a spokesman had indicated to IPE that equities could be the first asset class where holdings would be pooled.The LPP sees itself as a pension services organisation and thus more than an asset pool.The venture also has a pensions administration company, LPP Administration.It does not yet have the £25bn in assets that the UK’s Department for Communities and Local Government has set out as a goal for the LGPS asset pools, but it is confident about being able to attract further clients.