Investment in high-tech American companies is paying dividends for the Greater Manchester Pension Fund.

The Tameside Council managed Fund - the largest public sector pension fund in the country - has produced spectacular returns on their venture capital investments in the last 12 months.

The £6.1 billion pension fund, handed to Tameside Council to manage on behalf of all ten local authorities within Greater Manchester County in 1987, has recorded an 85 per cent return on venture capital investments in the last year.

Steve Taylor, Tameside’s Principal Investments Officer, explained: "The more money the pension fund realises, the less the member councils, as employers, will have to contribute to the fund on behalf of their employees.

"In simple terms this means that less money needs to be given over from the council’s annual budget into the pension fund, leaving more money available to be spent on council services."

The spectacular performance of the pension fund which has 90,000 contributing members and 64,000 pensioners means that the 10 local authorities need only spend, on average, between 7 and 8 per cent of their annual budgets on employer pension contributions. Nationally, the average spend on pension funds within local authorities runs at around 13 to14 per cent.

The massive returns are due largely to the management team’s choice of funds into which they have invested the members’ cash.

The Management Committee of 10 Tameside councillors and five councillors from the other boroughs plus a team of Tameside’s investment officers has chosen some funds that have invested heavily in high-tech companies in the USA.

Internet fever has caused a rapid growth in the value of these companies producing huge returns on the capital invested.

The high performance of the venture capital investments was one reason for a change in strategy that the Management Committee put in place last summer. It has made a concerted effort to increase the amount of venture capital it invests from two per cent of its portfolio to three per cent.

Added Steve: "Any private investor putting money into a fund would be delighted to see long-term annual returns on their investment in the region of 15 per cent. To have a pensions fund showing returns on venture capital of 85 per cent is spectacular."

Executive Leader Cllr Roy Oldham, Chairman of the Pension Fund, commented: "Our average pension fund returns over the last 15 years have been in the region of 22 per cent - a great performance in itself. But to have 85 per cent returns on venture capital this year is phenomenal and a credit to the members of the Management Committee and Tameside officers."

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