London and Lancashire's public pension funds have formally been given the green light for their £10 billion investment partnership, with plans to set up a fund management company by April and ambitions to take on up to £40 billion of assets.

The London Pensions Fund Authority and Lancashire County Pension Fund, which manage £10.5 billion between them, have been in talks about pooling their assets and liabilities since December, but on Friday announced that they have now received formal approval for the plans from their respective governing committees.