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.
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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