After the talk ., look carefully to see a former pension minister in conversation with Elwell

The third day of this conference and people are drifting away or getting coffee’d up in readiness for a good laugh with Louis Theroux.

Meanwhile there is a discussion going on in the main hall between TPT (fresh from announcements on their with to do CDC and run a Superfund, Smart- working hard to get to scale and Border to Coast (“who they”).

Actually Border to Coast have been showing the way on how to run large (£100bn + now) pension funds. They are the big winners from the consolidation of LGPS funds and they have been highlighted by my sick friend Chris Sier as the best run pension fund in the country for many years.

And representing them at this Conference and at this debate – the lady in my photo above. Here she is on the panel she had just left with David Lane (CEO of TPT) listening on. I was in awe and so were the panel and so was the sparse crowd who missed one of the performances of the week from Rachel Elwell.

It is not often that someone in pensions can claim to be in the FT that day and not mean they slipped in. But when Rachel said it, she meant it and meant it properly.

How often are you going to hear someone say that they do not want to takeover everyone else? Well you heard it here from a lady who I hope we will hear a lot more from, because if there was a start of this Conference, it was not Louis Theroux (funny as he was) – it was Rachel Elwell.

Brilliant chairing from Carol Young , reminded me that most of the best moments, the learning moments of this Conference , came from women – including the Chair who did a good job keeping Louis Theroux under control.

Theroux controlled by Emma Douglas

And I am so happy that FT’s Mary McDougall has reported this Elwell insight as she has been sick and now has good reason to be happy. Elwell stepped out of conventional line which says that you want to run the lot (all £392bn in the case of LGPS)..

“There is a point at which you are so big that when you make investment changes you start to move the market and you can’t be as flexible, agile or innovative,” Elwell said in an interview, adding that having one fund spanning the whole of England would make it “very difficult to keep the sense of being accountable to the local taxpayer”.

I have been saying ever since Reform took over 13 Councils and thus a large part of the governance of LGPS (Councillors govern the 80+ funds) that LGPS needs to assert its capability to do things well. In the Conference Hall and in the FT Border to Coast do just that.

It is the arguments of Border to Coast that have influenced Torsten Bell who before being “elected” and MP and “appointed” a Minister was an advocate of a single Fund to run LGPS. He has changed his mind.

The current pensions minister Torsten Bell, a vocal supporter of local government pension reform, said before Labour took office and he was elected as an MP that pension assets held across the 86 local councils of England and Wales “should be brought into one consolidated fund”. However, he said at a Pensions UK event in Manchester on Wednesday that the government does not “have plans to force further consolidation”.

It was a stroke of genius from Pensions UK to have her on this panel as it is critical for master trusts (like TPT and Smart who were represented) to recognise that there is an optimum size for them too. I worry that projections for Nest and to a lesser extent People’s and Lifesight will put them in danger of losing their “edge”- Mikulskis’ phrase for the advantage he has as People’s grows as cashflow “super-positive”.

As Chris Sier, lies ill, I realise he was right in his estimate of Border to Coast as an example for pension funds (the managers of pension money).

Joe McDonnell, chief investment officer at Leeds-based Border to Coast, said he was not looking for more funds to join the pool and there was an “optimal size” for the manager “and it’s probably . . . around £125bn”. “It’s not simply the case that the bigger you are the better you perform,” he said, adding that at about £125bn he would have enough scale to be able to “negotiate the best possible terms . . . but we won’t have to say no to certain things [that aren’t big enough]”.

As importantly, Border to Coast can invest locally to the LGPS funds they manage funds for, making them well regarded in those regions and bringing with them Reform, who have been critical of LGPS bad practice.

There have been several calls at this Conference for geographically relevant investment, most pertinently to Will Hutton when he spoke to back political intervention in the investment of DC (and LGPS) funds. It may well be right in future that funds like Nest look to LGPS as an example of how to structure the investment pooling they run for what is now more than 14m of the British population.

Young, Fiveash, Elwell and Lane – to a relatively sparse audience.