A treasury fund created by the public sector for the public sector
LONDON TREASURY LIQUIDITY FUND
A treasury fund created by the public sector for the public sector
A pooling of investors’ treasury resources, using specialist investment management expertise to unlock the benefits of scale, delivering liquidity with resilience, diversification and returns.
OVERVIEW
As investors, participating public sector bodies receive daily access to liquidity while equitably sharing returns from longer-dated pooled investments. The historic returns realised by LTLF’s investment strategy have been consistently ahead of SONIA bank rate (Sterling Overnight Index Average), delivered on a cost-recovery basis for the benefit of all its investors.
LTLF is run in line with the GLA Responsible Investment Policy with a focus on ESG reporting and engagement.
LTLF is constituted as a Scottish Limited Partnership, structured as an unauthorised alternative investment fund (AIF) with G10 Capital Limited as its alternative investment fund manager (AIFM). London Treasury acts as the Principal Portfolio Manager.
Benefits in collaboration
An investor with fluctuating cash-flows, on its own is only able to invest in short-term instruments, but with LTLF is able to share the benefits of longer-term investment.
Aggregating investors’ cashflows leads to:
Key features
- Capital preservation
- Focus on Investment Grade credit for core liquidity.
- Managed within strict volatility limits, Value at Risk not to exceed 2% with a probability of 95%.
- Portfolio minimum credit criteria requirements and diversification limits.
- Enhanced return
- Wider and more specialist investment options.
- Target gross return of SONIA +0.5%. (Net return SONIA +0.4%).
- Focus on relative risk-adjusted returns.
- Liquidity focus
- Working with investors’ forecast cash-flows to manage liquidity needs.
- Minimum of 10% of all fund assets in overnight cash.
- Preference for short-dated investments and ‘available for sale’ instruments.
Portfolio allocation strategy
Specialist investment team
Strategic Investment Advisory Committee with expert independent and investor representation
Chair
Independent
Director of LTL
London Treasury Liquidity Fund performance
Last Twelve Months (LTM) LTLF Net Performance
Rolling 12-month performance to 31 December 2024
LTLF returned 0.19% net over benchmark and 0.62% net over SONIA for the 12 months to December 2024
LTLF: 5.72% Benchmark: 5.53% SONIA: 5.1%
Source: State Street
Performance numbers are shown on a net basis
Past performance is not a reliable indicator of future results
LTLF is designed with local authorities and London boroughs in mind. LTLF and its antecedents have consistently delivered performance in excess of SONIA or that of an average money market fund
Returns compared with SONIA and Money Market Funds (MMF)
*Annualised 9 month performance from 01/04/24 to 31/12/24
Source: Fathom Financial Consulting Limited, State Street (from FY 2023-24) and MUFG Corporate Markets (MMF gross performance averages)
Performance numbers are shown on a gross basis
SONIA calculated using the ICE BofA SONIA Overnight Rate Index
Past performance is not a reliable indicator of future results
Straightforward onboarding process
- Review LTLF investment strategy to determine fit with your Council’s risk appetite.
- Conduct due diligence and legal review of LPA.
- Where appropriate, ensure Treasury Management Strategy Statement (TMSS) permits investment.
- Successfully achieve opt-up to professional client status.
- Sign the deed of adherence.
- Ongoing commitments
- Provide regular cash flow forecast
- Maintain a small long-term core commitment to LTLF (2% of expected average balance)
- Ongoing participation
- Quarterly LPAC attendance
