Shropshire County Pension Fund’s recently published Annual Report 2024/25 details adjustments to its private market allocations and continued strategic positioning in equities. The report, published in May 2025, outlines the fund’s investment policy and performance for the fiscal year.
Strategic Asset Allocation Revisions
The fund’s Pensions Committee agreed to a revised strategic asset allocation in June 2023, which remained constant throughout 2024/25. The fund aims to increase private market commitments to reach intended allocations across illiquid credit, private equity, and infrastructure. To offset current underweight positions in these illiquid assets, the fund maintains overweight positions in targeted return funds and equity, which will be reduced as capital calls for outstanding commitments are received (page 4).
Allocation Changes for Fiscal Year 2025
For the fiscal year 2025, the fund made specific adjustments to its strategic asset allocation. The allocation to Private Debt (Illiquid credit) increased from 6% to 7%, while Property Debt (Illiquid credit) decreased from 1.5% to 0.5%. Other asset classes, including Equities (Global, active and passive) at 55%, Property at 5%, Private Equity (Illiquid growth) at 7.5%, Targeted Return (Hedge funds, unconstrained bonds, and insurance-linked securities) at 7.5%, Investment Grade Corporate Bonds at 10%, and Infrastructure (Illiquid growth) at 7.5%, remained unchanged from the 2024 strategic allocation (page 19).
New Commitments and Manager Appointments
During 2024/25, the fund made an additional commitment of £90 million to LGPS Central Ltd for private debt, specifically to the 2024 investment sleeve, to achieve its 7.5% target allocation for this asset class. This fund is in its early capital-raising stages, and full deployment is expected to take several years. Additional commitments will also be required for private equity and infrastructure, both managed by LGPS Central Ltd, in 2025/26. These will reflect the return of capital from legacy investments with HarbourVest and GIP Infrastructure. These new or additional allocations will be funded by a reduction in targeted return strategies and a reduction of the overweight equity position (page 4-5).
Furthermore, the fund completed an oversight agreement with LGPS Central Ltd for its passive equity mandate with Legal and General. This agreement allows LGPS Central Ltd, through EOS at Federated Hermes, to undertake voting on all the fund’s equity portfolios, consolidating reporting and increasing consistency (page 6).
Future Investment Intentions
The fund continues to work closely with LGPS Central Ltd on plans to transfer further assets to the pool’s control. While awaiting the government’s response to the LGPS ‘Fit for the Future’ consultation, the fund is aware of a potential timescale of March 31, 2026, for LGPS Central Ltd to have oversight of all assets. The fund will continue to monitor legacy positions with HarbourVest for private equity and GIP for infrastructure, making further commitments to LGPS Central Ltd products to match expected maturities from these managers (page 18).
Working with partners to develop and review the current investment strategy in light of the 2025 valuation results will be a major strategic focus for the fund over the next year (page 18).
Strategic Exploration of Asset Classes
The strategic allocation in June 2023 removed the allocation to property debt in favor of private debt. The property debt portfolio is a legacy asset and is expected to mature over the next six months, with proceeds used to meet existing commitments to the LGPS Central Ltd Private Debt Fund. The total proportion of the fund to debt investments remains at 7.5%, now reflected as private debt in the strategic asset allocation (page 73).
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