Agenda and minutes

Received from Karen Shackleton, MJHudson Allenbridge.

Apologies for lateness received from Councillor Hull.

None.

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.

None.

RESOLVED:

That the minutes of the meeting held on 5 March 2018 be confirmed as a correct record and the Chair be authorised to sign them.

RESOLVED:

(a) That the performance of the Fund from 1 January to 31 March 2018, 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 MJHudson Allenbridge Advisers on fund managers’ quarterly performance, detailed in Appendix 1 to the report, their presentation and the amendment to line 1 in the Headline Comments for BMO/LGM by the substitution of  the figure “-3.37%” for “+3.37%” be noted.

(c) That the LGPS Current Issues – May 2018 leaflet, also attached to the report, be noted.

(d) That Hearthstone be informed of the Sub-Committee’s critical view of their failure to engage and communicate with Islington about their plans to rebrand at the EGM on 15 June 2018, especially given that Islington’s investment represented 49% of the Hearthstone Fund.

David Cullinan, PIRC, gave an annual performance review for the Pension Fund in 2018.  Copies of the presentation were supplied to members.

He noted that the latest year’s results showed that most Funds had outperformed their benchmarks by a small margin, averaging 4.5% and had outperformed their benchmarks by a small margin. He described the reasons for the rise and fall in various major asset classes, with property the best performing of the major asset classes, returning 10% for the year and UK equities underperforming all major overseas markets for sterling investors.

In Islington’s Fund structure, asset allocation was close to the universe average, with the notable exception of the relatively high allocation to property and the lower exposure to alternatives. This structure ad a broadly neutral impact on relative performance in the latest year.  However, in relation to its peers, the Fund had been behind the sector average over most periods.

In summary, the sector had delivered excellent returns over all periods, although the Fund’s near term performance had been disappointing.   Longer term returns were trailing the LGPS average but the Fund had experienced less volatility.  Most important, performance over all meaningful timeframes had outpaced inflation and actuarial assumptions for asset growth.

RESOLVED:

That the pensions training opportunities detailed in Appendices A and B of the report of the Corporate Director of Resources be noted.

RESOLVED:

(a) That an item on “Divestment” be added as an item on the agenda for

18 September 2018 and an item on “Engagement with shareholders” as a possible item for 26 November 2018.

(b) That the contents of Appendix A to the report of the Corporate Director of Resources, detailing proposed agenda items for future meetings, be noted, with the additions above.

RESOLVED:

(a) That the contents of the report of the Corporate Director of Resources and the accompanying exempt appendices 1 and 2 from Mercer be noted.

(b) That investment in LCIV Allianz continue for the time being.

(c) That officers and Mercer prepare further analyses of LCIV sub funds for the possible transfer of the Allianz and Newton portfolios.

The Sub-Committee noted that the decision on the dissolution of the old governance arrangements and approval to the new would have to be approved by the Executive.

RESOLVED:

(a) That the progress and news on the London CIV to May 2018, detailed in the report of the Corporate Director of Resource, be noted.

(b) That the arrangements for the next phase of implementing the new governance structure, terms of reference and notice of dissolution of the Pension CIV Sectoral Joint Committee, and that these were matters for consideration and approval by the Executive, be noted.

(c) That the London CIV be asked to address the Sub-Committee’s concerns about engagement and shareholder voting issues.

Alex Pearce, Mercer, gave a presentation on the equity protection strategy. Copies of the presentation were laid around.  To date, it seemed that equity risk management had protected the Fund through the recent equity market volatility experienced in February/March 2018.

RESOLVED:

(a) That the options value as at March 2018 be noted.

(b) That Mercer’s presentation highlighting the main features and activities of the strategy to May 2018, detailed in the exempt appendix, be noted.

(c) That, for the future, monitoring reports be submitted to the Sub-Committee every six months.

RESOLVED:

That the press and public be excluded during consideration of the following items as the presence of members of the public and press would result in the disclosure of exempt information within the terms of Schedule 12A of the Local Government Act 1972, for the reasons indicated:

Noted.

Noted.

Noted.