Agenda and minutes
Venue: Council Chamber, Town Hall, Upper Street, N1 2UD. View directions
Contact: Mary Green
Media
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Apologies for absence Additional documents: Minutes: Apologies were received from Councillor Gill. |
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Declaration of substitutes Additional documents: Minutes: There were no declarations of substitute members. |
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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.
Additional documents: Minutes: There were no declarations of interest. |
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Membership, terms of reference and dates of meetings in 2022-23 PDF 208 KB Additional documents: Minutes: RESOLVED: (a) That the membership of the Pensions Sub-Committee, appointed by the Audit Committee on 13 June 2022, its terms of reference and dates of meetings for the municipal year 2022/23, as set out at Appendix A to the report of the Corporate Director of Resources, be noted. (b) That the membership of the Pensions Board, appointed by the Audit Committee on 13 June 2022, its terms of reference and dates of meetings for the municipal year 2022/23, as set out at Appendix A to the report, be noted.
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Minutes of the previous meeting PDF 228 KB Additional documents: Minutes:
RESOLVED: That the minutes of the meeting held on 14 March 2022 be confirmed as an accurate record of proceedings and the Chair be authorised to sign them. |
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Pension Fund performance from January to March 2022 PDF 506 KB Additional documents:
Minutes: Meeting was informed that in
light of the Ukraine Russia War, the combined fund performance has
been negative during the last quarter, however looking over the 12
month period it is positive and ahead of the bench mark . On the question of whether
despite 3 years of extraordinarily levels of economic instability
if the Council’s mix of investment is vulnerable in
comparison to other local authorities government, the meeting was
advised that committee will have the opportunity to compare
Islington against other local authorities when a standard report is
considered at the September meeting. In response to concerns about the BMO fund and the possibility of termination going forward, meeting was advised that there were no issues with the emerging market and frontier market but the issues were more specific to the circumstances of BMO itself and not the emerging market universe.
Karen Shackleton of MJ Hudson in summary highlighted the various performance of the fund managers as highlighted below-
In-house Passive portfolio No performance issues, however members to note fund will be transitioning into a Paris Aligned fund over the summer as it is nearly at the end of this particular mandate
Relatively new allocation and proceeds of equity protection strategy has gone into this fund, it is a low risk fund designed to protect capital and although it made a small loss during the quarter of -1.6 % this was due to its exposure to financial corporate bonds . Members to note that there was a mistake in the report, that the last paragraph under portfolio characteristics should be amended to read ‘ Schroders intend to remain energy positioned’ rather than defensively positioned
LCIV Global Equity Fund Newton
Chart 3 shows how managers do well in certain environments and less on others and it shows Newtons have had a long period of underperformance, followed by a much better performance in quarter 1 of 2020, however unfortunately it is beginning to tail off and presently experiencing underperformance relatively to the benchmark and certainly below their performance. Committee were advised that this is a fund manager that Islington is paying to outperform but are actually underperforming for over 3 years, that it is a defensive portfolio which is good in a time of volatility but this is something to monitor. Members were reminded that the fund manager has a thematic approach, which changes slowly over time, that their focus at the moment is Net effect impact of technology and healthy demand, affordable health care of the elderly, noting that these themes have not played out well in the last quarter.
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Presentation by Quinbrook (Infrastructure Renewable Manager) - To follow Additional documents: Minutes: Committee received a
presentation from David Scaybrook of
Quinbrook Infrastructure. Their past
performance, activities and projected
cash flow position for Islington for current fund as well as
pipeline projects for their next fund, the Net Zero Power Fund and
some of the merits of Quinbrook as
stated in the report were highlighted. To note the presentation (exempt Appendix). To delegate responsibility to Officers to complete the fund subscription and carry out further due diligence.
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Additional documents: Minutes: Members were advised of current
activities and the CEO’s departure in March 2023. The various
funds performance was discussed and agreed they need to be
monitored closely and an update to be provided at the September
meeting. RESOLVED To note the progress and activities presented at the May business update session (exempt Appendix 1) An update to be provided at the next meeting in September
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Pensions Sub-Committee Forward Plan PDF 572 KB Additional documents: Minutes: RESOLVED: To agree Appendix A
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Progress on Third generation indices implementation (oral update) Additional documents: Minutes: Members were reminded that at
the last meeting it was agreed to bring a progress report on this
issue however nothing to report at this moment
. With regard
to the transition, meeting
was informed that the issue is whether the council could do any in
species transition which could lower the costs and that there is a
timetable with L&G to carry out the transition in the middle of
August. In response to a question on the timetable when it will be operational, and in particular when assets will be moved across, meeting was advised that it is anticipated within 2 weeks by the end of the transition, the new index will be up and running. Meeting was advised that one of the areas sought is the impact on the weighted average carbon intensity(WACI )but at the total equity portfolio level making this transition will reduce the WACI by 17.4% bearing in mind that is a 10% allocation which is very significant.
Chair stated the need to keep an eye on this especially over the month of August and that it will be essential to be ready with some public narrative that we have taken this significant step change in funds over carbon footprint
Members were reminded that
Islington has a legacy in Raffi emerging market portfolio and a
decisionwas t taken that to transfer
that we should move to Paris Aligned and &G do not have that
at the moment. Initial discussions
with an Index Provider who have
confirmed that they intend to launch a Paris aligned emerging
market with L&G in July so it is something to look
explore.
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ESG Monitoring of managers and carbon foot printing result PDF 339 KB Additional documents: Minutes: Committee received an update on
the progress to date on the agreed monitoring plan on the
portfolio’s decarbonisation policy and to note their ESG
ratings and carbon footprint of Islington’s equity and credit
holdings
· To note the ESG ratings of individual portfolios and average rating of 1.8 (previous rating 2.1) for the whole Fund. · To note the carbon footprint of our public equities and credit · To note the carbon footprint of our public equities and credit · To note the fund has reduced its exposure to carbon intensive companies since 2016 and absolute emissions as set out in Exempt Appendix 2 (to follow). · To continue to engage with our portfolio managers to improve ESG ratings and achieve the targets set in 2022 and 2025 for the whole fund.
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Briefing paper on UK Social and Affordable Housing PDF 555 KB Additional documents: Minutes: Alex Goddard of Mercer briefed
the meeting on Impact Investing, UK Social and Affordable Housing
and the recent white paper on levelling up issued by the Department
of Levelling Up Housing and Communities (DLUHC). Members were
advised that the paper is a training document for consideration to
start the process of formulating a mandate specification and risk
and return parameters.
RESOLVED · To note the briefing paper prepared by Mercer (Exempt Appendix 1). · To note the range, themes, risk and return and objectives as well as governments recent Levelling Up white paper. · To consider the next steps of how to progress this commitment.
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Private Debt Procurement - Tranche 2 PDF 209 KB Additional documents: Minutes: Members were advised of a further update report on 2019 Actuarial review position and the targeted investment returns required to keep contributions to the fund sustainable and the investment strategy implications on asset allocation.
Members were reminded that at
the December 2020 meeting a mandate specification was agreed and
appointed 2 private debt managers to cover 50% of the total 10%
asset allocation. · To consider the allocation of a further % of assets to Private debt from the outstanding 50%. · To note and consider the attached Exempt Appendix1. · To agree to delegate authority to officers and our investment advisers to conduct further due diligence and recommend who best delivers value for money and complements our existing managers and proceed to procure. · To consult and seek approval from the Chair of Pensions sub-committee on the final recommended manager · To agree to delegate to the Corporate Director of Resources, in consultation with the Director of Law and Governance, authority to negotiate and agree terms and conditions of the fund management agreement(s) with the recommended and agreed manager(s).
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Presentation by Quinbrook (Infrastructure Renewable Manager) Minutes: Noted |
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London CIV update - exempt appendix Minutes: Noted
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ESG Monitoring of managers and carbon foot printing result - exempt appendices Minutes: Noted
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Briefing paper on UK Social and Affordable Housing - exempt appendix Minutes: Noted
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Private Debt Procurement - Tranche 2 - exempt appendix Minutes: Noted
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