The London Pensions Fund Authority, known for its innovative approach to managing its members’ money, has created a shortlist of alternative credit managers for members of the Local Government Pension Scheme, a further sign of the hunt by local authority funds for new ways to cut costs and boost returns.

The LPFA, which manages £4.8 billion and is one of the largest local pension schemes in the UK, on Tuesday unveiled a "national framework" with four alternative credit managers.