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The London Pensions Fund Authority (LPFA) announced today that it has created a
national framework that will allow other Local Government Pension Schemes (LGPS) to
select from four alternative credit managers without having to complete a full
European tender process.
The framework is made up of Apollo Capital Management, Ares Management, Babson
Capital and GSO Capital, and will remain operational until February 2019.
The successful managers were selected after a thorough tender process, which saw
approximately 35 managers shortlisted to four.
Following the creating of this framework, LPFA selected Apollo Capital Management as
its alternative credit manager.
Subject to final documentation, Apollo will oversee the LPFA’s £150 million allocation
to alternative credit, including, distressed debt, real estate debt, leveraged senior loans
and private lending.
The mandate will be unconstrained and target absolute returns by investing across a
number of higher yielding debt markets. It is expected that the majority of investments
will be made within developed markets; however, there is also scope for allocations to
emerging markets.
Apollo’s appointment was made after a thorough two-part tender process, which saw
approximately 35 managers shortlisted to four, before the final selection. Apollo’s
expertise in alternative credit, strong investment track record and breadth of credit
solutions will be essential in helping LPFA enter the alternative credit market.
The tender process undertaken by LPFA has also created a national framework that will
allow other Local Government Pension Schemes to select any of the successful
shortlisted managers for similar work in the future, without having to complete a full
European tender process.
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