A single investment fund holding £562m of Wandsworth’s pension money has underperformed its benchmark by 10.3 percentage points over three years, and the committee responsible for overseeing it has yet to act on its own overseers’ recommendation to reduce exposure.
The pension holders themselves are protected. This is a defined benefit scheme: the teachers, social workers and council staff who pay in receive their guaranteed pension regardless of how the investments perform. But the cost of underperformance does not disappear. It falls on the employers who fund the scheme, and those employers are Wandsworth Council, Richmond Council, and every school and academy in the borough.
The fund is the London CIV Global Equity Focus Fund, managed by Longview Partners. It holds 16.1 per cent of the pension fund’s total assets. Over three years to 31 December 2025, it returned 7.0 per cent against a benchmark of 17.3 per cent, a gap of 10.3 percentage points. Over one year the picture was worse: the fund lost 3.2 per cent while the benchmark gained 13.2 per cent.
For schools, this matters directly. When pension fund returns fall short over time, employer contribution rates rise at the next valuation. Higher pension costs for a primary school in Wandsworth mean less money for teaching assistants, building repairs and classroom resources. The fund is well-funded today, with a surplus of around £500m that is keeping contributions low. But that surplus is exactly what sustained underperformance erodes.
Twelve quarters, three meetings, no decision
The committee’s own rules require it to consider action when any active manager holds more than 15 per cent of the fund. This fund has been above that threshold since at least October 2024.
At the October 2024 meeting, the committee noted the position. At the December 2025 meeting, it considered shifting money toward passive management and reviewed the overweight position. No exit decision followed either time.
At the March 2026 meeting, Jenny Buck, Chief Investment Officer at London CIV, told the committee she was “incredibly disappointed” with the fund. It held only about 25 stocks, she said, and her guidance was that they “should be diluting your exposure.” A proposal in the papers would sell some units, but to fund a new gilt allocation, not as a response to years of underperformance.
The committee meets four times a year. Its purpose is to make decisions about the long-term financial security of the fund on behalf of the people who pay into it. The performance data has been on the table for twelve consecutive quarters. The committee’s own Investment Strategy Statement was triggered. The fund’s own overseers recommended action. The output, across three formal meetings, has been to note, consider and review.
The fund’s passive manager, Legal & General, outperformed all three active equity managers this quarter and over one and three years. The committee’s own report noted that over three years, none of the active managers had beaten the passive alternative, and all three had fallen below their benchmark more often than they had met it.
£83m locked in a suspended property fund
A second problem sits alongside the equity underperformance. The Schroders Capital UK Real Estate Fund holds £83.3m of pension money and has been below its benchmark for thirteen consecutive quarters.
On 18 December 2025, Schroders temporarily suspended the fund. No dealing is permitted. The money cannot be accessed.
The suspension was triggered by a queue of investors trying to leave and difficulties selling assets quickly enough to pay them. Schroders has since announced a merger with Nuveen, the same company that absorbed a previous Wandsworth property fund investment after that fund also failed. The merger is subject to regulatory approval. No timeline has been given for releasing Wandsworth’s £83.3m.
What this costs the council
Wandsworth Council’s employer contributions are currently falling, from roughly £6.3m in 2025/26 to a projected £5.1m in 2026/27, because the surplus allows it. But the fund already pays out more in pensions than it receives in contributions, relying on investment returns to bridge the gap. When the surplus shrinks, contributions rise, and that pressure lands on a council budget already facing a funding gap and rising council tax.
At the same March meeting, Councillor Craigie, the committee’s deputy chair, calculated that ethical divestment costing 0.2 per cent in long-term growth would mean roughly £6m a year lost to the fund. He called it significant. In the same meeting’s papers, a single fund managing 16 per cent of the fund’s assets had produced a performance gap running into tens of millions over three years.
Craigie himself made the connection. “There are decisions that we see in our own papers that occasionally we lose 6 million quid because of a speculative decision that’s gone wrong,” he said, “or an asset manager that isn’t managing the fund in the same way.”
What happens next
The committee that meets in June 2026, after the May local elections, will inherit both positions: an equity fund whose overseers have recommended diluting exposure but where no formal exit decision has been taken, and a property fund that is suspended with no exit timeline.
Scheme employers, including schools and the council, can engage with fund governance through the employer forum described in the fund’s strategy documents. The webcast of the June meeting will be publicly accessible.
