LGPS Central’s Louis-Paul Hill: “My role will evolve, but exactly how that happens, we will see.”

21 Feb 2025

The new investment fund oversight and strategy manager tells Andrew Holt about his first few weeks in the role, his ambitions for the pool and why there are no stupid questions.

Interviews

The new investment fund oversight and strategy manager tells Andrew Holt about his first few weeks in the role, his ambitions for the pool and why there are no stupid questions.

You joined in January. What does your role at LGPS Central entail?

The investment oversight element, what I call the day job, is working with LGPS Central’s investment and client teams to ensure the portfolios they are running, and their reporting, meet the objectives of our partner funds. That is the main focus.

Then there is the government consultation, Fit for the Future. I have a background in consulting with the LGPS and a background in the private sector, including fiduciary management. So I expect to be involved in working with our partner funds in thinking about how the pooling model might evolve. So looking at the potential for greater delegation and the potential to advise partner funds.

My role, given the government consultation, is likely to evolve.

So in establishing the role there is some pragmatism built in so you can adapt to changes the consultation may present?

Exactly. The pool needs to think about its role in the future. There is definitely a need to do the investment oversight but given my experience, I am keen to help where I can in terms of how it will evolve.

So you will need to box lightly on your feet, dodging and weaving?

The organisation is set up to do that any- way. Everyone is pulling in the same direction. That means not standing still.

Why did you take up the role?

It is an interesting role. There is a big dynamic part to it, which I like doing. There are good people at LGPS Central and working with good, smart people is satisfying. There is also the chance to have a positive impact on the organisation and our partner funds.

I have always tried to have a positive impact in terms of investment outcomes. Compared to the consulting world, all my work now is focused on that positive impact for investor outcomes. I have no focus on revenue growth, which in the consulting world is an important part of the job. It is nice to focus solely on the investment outcomes.

Do you have any particular ambitions in this role?

Personally, I am not looking too far ahead. But after three years, five years or 10 years, if I can look back and say: “I have had a positive impact and helped the partner funds achieve the investment goals that they were looking to achieve” – I would be happy on a job well done.

I know it is early days, but what has been your biggest challenge?

Before I started this role, I was a little worried about coming in with this oversight role and that people might be defensive. But, so far, everyone has been open, and open to a challenge and open to change.

During the interview process, LGPS Central talked to me about their values, and one of them was: “to be curious enough to challenge and strong enough to change”. I liked that attitude. From what I have seen, people in the organisation do live up to that.

You have a strong investment background. What was your view of LGPS Central from the outside?

I knew LGPS Central reasonably well, through advising one of their partner funds. I have had many meetings with people at LGPS Central and advised others who worked with other pools, so I am familiar with them and with pooling.

I had a pretty positive view. LGPS Central is authorised by the Financial Conduct Authority. Working on the other side, I could see that they are focused on listening to partner funds.

More recently, there have been strong appointments in senior roles, so I could see that LGPS Central are in a good place.

What do you make of LGPS pooling as a principle?

This has been a long-term evolving process. At the start, I was a little uncomfortable with the appearance of a focus on costs and it being an exercise in getting costs as low as possible.

As you get larger pools of assets, costs do come down. But I am a little wary of that being the key driver. Where we are getting to, and I am a lot more comfortable, the key driver is about the best investment outcome. Costs are important, but getting the best investment outcome is something that we should be focused on. And we are getting there.

Has there then been some push back from LGPS Central via the consultation on these themes?

This consultation hasn’t had a big focus on costs. The evolution away from that has happened. The focus is now on investment outcomes.

What is your view of what the government wants to do with the LGPS in terms of potentially creating superfunds and the drive to invest more in private companies and the UK’s infrastructure?

The drive to invest in private markets and infrastructure is not a government initiative, as such. There is a long-term trend for the LGPS to invest more in private markets – and infrastructure is one of the main ones.

The reasons for that are obvious: these assets are a good match for the LGPS, as it can take a long-term investment perspective. Therefore, that illiquidity premium from private markets, the LGPS can take advantage of that. They are also a good match for the LGPS in terms of inflation-linked, cash flow-matching liabilities.

In terms of Fit for the Future, there is a link to the private markets and infrastructure with the government trying to encourage investments in UK specific private markets. I understand that.

Where I would come from, working with partner funds, is the need to focus on fiduciary duty, meaning the investments need to have the right risk-return profile.

What about the superfunds?

To me, coming from a private sector background, it is a natural evolution and a progression of what we are doing now.

Although I couldn’t comment on what makes a superfund.

But I hear from many pension funds that some infrastructure investments don’t t with their objectives.

I am supportive, like most in the LGPS, of having the fiduciary duty and doing the right thing from an investment risk and return perspective. There are opportunities in the UK that deliver that. So it doesn’t massively concern me, but that fiduciary duty has to be a priority.

How will these ambitions shape your role?

I need to be flexible. I need to work with partner funds to ensure the existing model that the funds they are investing in are going to achieve the investment outcomes. In the future, my role will evolve, but exactly how that happens, we will see. I expect to be involved in the discussions about building out capabilities [of the pools] in, for example, the provision of advice.

Have you made it your job to meet the partner funds? If so, what have they been telling you?

I have been on quite a few calls with the partner funds. As a former consultant, I believe in that collaborative, consultative approach with clients, and in this case partner funds. That is how LGPS Central acts. And that ts well with me.

There are, from what I have heard, a mixture of views and approaches from the partner funds. What I have been impressed with is LGPS Central clearly has the ability to listen and to do what it can to meet those different objectives and approaches.

It is early days, but have you made any changes to the LGPS’ investment approach – or do you have any plans to do so?

It is early days. I have been in the listening phase, if you like. Listening to people inside Central LGPS and our partner funds. I am very much still in that listening phase.

What strategy changes do you plan for LGPS Central?

It is the same principle. I am currently in the understanding situation and then in due course I will get on to it.

Did you have any input in the government consultation or was it done and dusted by the time you arrived?

I have had input here and there. I have had lots of conversations with people that were pulling together the response.

What are your plans as part of the consultation?

We are looking at the options and how we can deliver for our partner funds.

What has been the biggest lesson that you have learnt during your career?

I like investing and speaking to investment experts. I am also used to speaking to clients and being seen as the investment expert, and my reflection in my conversations is there are no stupid questions.

You should always keep asking questions. So that on-going dialogue and questioning part is so important.