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Agenda and minutes

Venue: Town Hall, Upper Street, London N1 2UD

Contact: Mary Green  0207 527 3005

Items
No. Item

65.

Apologies for absence

66.

Declaration of substitutes

67.

Declaration of interests

If you have a Disclosable Pecuniary Interest* in an item of business:

         if it is not yet on the council’s register, you must declare both the existence and details of it at the start of the meeting or when it becomes apparent;

         you may choose to declare a Disclosable Pecuniary Interest that is already in the register in the interests of openness and transparency. 

In both the above cases, you must leave the room without participating in discussion of the item.

 

If you have a personal interest in an item of business and you intend to speak or vote on the item you must declare both the existence and details of it at the start of the meeting or when it becomes apparent but you may participate in the discussion and vote on the item.

 

*(a)      Employment, etc - Any employment, office, trade, profession or vocation carried on for profit or gain.

(b)        Sponsorship - Any payment or other financial benefit in respect of your expenses in carrying out duties as a member, or of your election; including from a trade union.

(c)        Contracts - Any current contract for goods, services or works, between you or your partner (or a body in which one of you has a beneficial interest) and the council.

(d)        Land - Any beneficial interest in land which is within the council’s area.

(e)        Licences- Any licence to occupy land in the council’s area for a month or longer.

(f)        Corporate tenancies - Any tenancy between the council and a body in which you or your partner have a beneficial interest.

 (g) Securities - Any beneficial interest in securities of a body which has a place of business or land in the council’s area, if the total nominal value of the securities exceeds £25,000 or one hundredth of the total issued share capital of that body or of any one class of its issued share capital. 

 

This applies to all members present at the meeting.

 

68.

Minutes of the previous meeting pdf icon PDF 129 KB

69.

Pension Fund performance pdf icon PDF 185 KB

Additional documents:

Minutes:

Members expressed concern about the position of Hearthstone, given the fact that its Chief Executive had resigned and its business strategy was likely to change to focus on the retail market.  Nonetheless, it was agreed that it was reasonable to continue to invest in residential property and that, in the longer term, a new provider  for investment in residential property should be identified. It was agreed that M&G be invited to present to the Sub-Committee on investment in social housing, as a possible future alternative to Hearthstone..

 

Noting the overall poor performance of the Allianz investment, members agreed that they would review the situation in a year’s time, when it was anticipated that the CIV would have alternative investment opportunities..

 

 

RESOLVED:

(a) That the performance of the Fund from 1 October  to 30 December 2016, as per the BNY Mellon interactive performance report, detailed in the report of the Corporate Director of Resources, be noted.        

(b) That the report by Allenbridge Investment Advisers on fund managers’ quarterly performance, detailed in Appendix 2 to the report and their presentation, be noted.

(c) That the key person change at Hearthstone, the Fund’s residential property manager be noted, together with the proposed change in business strategy for Hearthstone.

(d) That there be no change in the Fund’s investment in Hearthstone at the present time, but the Sub-Committee’s longer term wish to retain investment in residential property, possibly with a different provider, be noted.

(e) That M&G be invited to present to the Sub-Committee on investment in social housing.

(f) That the Sub-Committee’s concern at the poor performance of Allianz be noted and their wish to review this investment in a year’s time, when the CIV would have alternative investment opportunities.

(g) That the recent Mercer Bulletin on “LGPS Current Issues”, dated February 2017, be noted.

 

70.

Presentation from AllenbridgeEPIC Investment Advisers on quarterly performance

71.

London CIV update pdf icon PDF 130 KB

Minutes:

RESOLVED:

(a) That the progress made to date on the London CIV, as detailed in the report of the Corporate Director of Resources, be noted.

(b) That the additional charges due from the London CIV and detailed in paragraph 3.6.3 of the report, be noted.

(c) That the information contained in the exempt appendix to this report, detailing the savings schedule, be noted.

(d) That the Newton global equity assets be transferred to the London CIV platform in the second quarter of the year,

 

 

72.

Carbon footprint reduction implementation update pdf icon PDF 122 KB

Additional documents:

Minutes:

The Head of the Pension Fund and Treasury Management explained that  technical difficulties would mean that there would be a delay in the process of transferring assets from the In-House UK Passive Fund to the L&G MSCI World Low Carbon Target Index, to achieve a 45% reduction.  However, it was anticipated that some of the assets would be transferred by June 2017.

 

Members of the Sub-Committee noted this delay, but expressed a wish to receive further information at their next meeting on steps being taken to reduce carbon in the rest of the Fund as expeditiously as possible, especially in property and bonds.

 

Members of the Sub-Committee undertook to continue to engage with energy and oil companies to encourage them to move to low carbon, through the offices of LAPFF as appropriate.  Members also considered the inclusion of an undertaking in the Investment Strategy Statement on their belief that a low carbon approach could assist climate change.

 

RESOLVED:

(a) That the implementation timeline for a lower carbon footprint on the Fund’s passive equity portfolio and the proposed process for achieving this, as detailed in paragraph 3 of the report of the Corporate Director of Resources, be noted.

(b) That Appendix 1 to the report, which summarised and mapped out the targeted carbon footprint level after implementation of the new benchmarks be noted.

(c) That officers report to the next meeting of the Sub-Committee on the plan for achieving carbon reduction in all other asset classes of the Fund.

 

73.

Funding Strategy Statement and consultation results pdf icon PDF 710 KB

Minutes:

 

 

 

RESOLVED:

(a) That the employer comments received from the consultation exercise (detailed at Appendix 1 of the report) on the draft  Funding Strategy Statement, attached as Appendix 2 of the report of the Corporate Director of Resources,  be noted.

(b) That the draft Funding Strategy Statement, attached at Appendix 2 of the report of the Corporate Director of Resources, be approved.

(c) That the Corporate Director of Resources be authorised to finalise and publish the Statement on the Council’s website.

 

74.

Investment Strategy Statement and Strategy Review Framework pdf icon PDF 132 KB

Additional documents:

Minutes:

RESOLVED:

:

(a) That the draft  Investment Strategy Statement (ISS), attached as Appendix 1 to the report

of the Corporate Director of Finance, be approved.

(b) That the Pension Fund and Treasury Manager arrange to consult  with members of the

Board and Sub-Committee to consider revisions to the ISS to include the following points

which were raised during discussion:

D the a

·         The addition of the following words to paragraph E on page 5 of Appendix 1,

             under the heading “ESG Risk  “The Sub-Committee expects asset managers to report

on how carbon risk is being properly managed”

·         “Impact investments”

·         Assets being invested in the London CIV where there is a case to do so

·         Reference to carbon risk, human rights, modern slavery (and others) and the

Intention to achieve a lower carbon risk  in the whole Fund to be included in

paragraph 5 (“Social, environmental and corporate governance policy and policy

of the exercise of rights (including voting rights) attaching to investments”)

 

(c) That  a representative from the Environment Agency be invited to attend the

Sub-Committee’s to detail the Agency’s commitment to withdraw from fossil fuels and

how this has been included in their ISS.

(d) That a  Fund Manager be invited to present to the Sub-Committee on investment

in private debt.

 

(e) That approval in principle be given to the proposal to become a signatory to the UK

Stewardship Code, as outlined in para 3.3 of the report.

 

(f) That the Corporate Director of Resources be authorised to approve the final ISS,  in

consultation with the Chairs of the Pensions Sub-Committee and  Board, for publication

on 1 April 2017.

 

(g) That it be noted that the ISS was a living document that would be revised as changes

occurred.

 

(h) That  the Mercer presentation on the framework of the investment strategy be noted and

that officers report to the next meeting on the sale of bonds and reinvestment into High

Lease to Value  property.

 

75.

Forward Plan pdf icon PDF 181 KB

Minutes:

RESOLVED:

That the contents of Appendix A to the report of the Corporate Director of Resources, detailing proposed agenda items for future meetings, be noted.

76.

The London CIV update - exempt appendix