Council pension fund makes £19m in General Election gamble

Croydon Council’s pension fund has made £19million in just a few weeks, through a gamble on the value of the pound sterling on foreign exchanges since August.

Investment banker: Andrew Pelling

That’s according to Andrew Pelling, the Waddon councillor who chairs the council’s pensions committee.

The pound has slowly been strengthening against other international currencies during the period when the likelihood of a General Election being held was increasing, with the possibility of a business-friendly Conservative government being returned to power.

Of course, if The City gets even a sniff of another hung parliament or, worse in their eyes, Jeremy Corbyn as Prime Minister, when the exit polls are announced just after 10pm tonight, all of those profits for the council’s pension fund could be wiped out. And more.

Pelling is a former investment banker. Since he took over as chair of the pension fund in 2016, it has gained £466.8million in value to reach £1.33billion.

But what goes up…

Pelling tweeted this week than the pension fund has been “partially hedged against Sterling strength”. Pelling had taken a view that the pound had become under-valued as the financial markets got too worried about the prospect of Brexit.

Pelling has not mentioned whether he and council officials have issued instructions to their brokers over whether to adjust the fund’s position as a consequence of the General Election result. Some gentle trading throughout today could help to save millions of pounds for the fund – which pays for the pensions of former council staffers.

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4 Responses to Council pension fund makes £19m in General Election gamble

  1. Mike Buckley says:

    Well done. I dont recall if Pelling banged the drum in the same way when the fund previously went down when Sterling went down? Perhaps I just have a poor memory, so it would be good to learn if what has gonbe up has gone up as much as it came down!! Is it OVERALL a profit or loss?

  2. Adrian Dennis says:

    You couldn’t have anyone better managing the Council’s pension funds.
    It is silly to ask what he intends to do next, that is not what a pension fund manager would reveal. His track record shows he will continue to do the best for Croydon’s pension fund.

  3. David Wickens says:

    Well done Andrew and the Pensions Committee. Those kind of figures may mean that the Council can reduce their payments into the Pension fund and ease pressure on the revenue account.

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