Agenda and minutes

The Chair drew attention to the emergency evacuation procedure.

At this point in the meeting declarations of interest are received from Members in any of the agenda items under consideration at the meeting. Members are asked to indicate:

(a) The agenda item number in which they have an interest to declare.

(b) The nature of their interest.

(c) Whether their interest is a disclosable pecuniary interest or an other interest,  (as defined in Part 2, A and B of the Code of Conduct and Rules for Registration of Interests)

Any Member who needs to clarify any matters relating to the declaration of interests is recommended to seek advice from the Council’s Monitoring Officer before the meeting to expedite dealing with the item during the meeting.

There were none.

Apologies were received from Councillor Mary Blatchford and Councillor Gabriel Batt.

There was none.

There were none.

There were none.

The public and exempt minutes of the meeting of 18 July 2013 were approved and signed by the Chair.

The Assistant Investments Manager presented the report. He drew attention to the RAG report on the Fund’s investment managers, which had been included on the agenda for the first time. He invited Members’ comments on the RAG report. He also drew attention to the information about the changes within the bond portfolio contained in section 4 of the covering report. Before completing the rebalancing of the bond portfolio, Officers had investigated whether it would be appropriate to invest in RLAM’s ethical fund and concluded that it was not appropriate because of the size of the ethical fund. In addition, because there was less commonality between the two funds than previously assumed, separate tenders may be required.

Mr Finch commented on the JLT report. As the tables on page 3 of the JLT report showed, there had been negative returns amongst a variety of asset classes during the last 3 months, though this was mainly because of market reaction to comments made by the Chairman of the Fed about the future of Quantitative Easing very near the end of the quarter. The last one year and three years showed equities moving up, but bond yields had risen by 50 basis points, which despite having a negative impact on bond returns, was, however, good for the Fund because it reduced liabilities by 10%. It had been good for the Fund to move from gilts to corporate bonds. The US economy was showing improvement, with encouraging job figures. Consumers might now be tempted to make big purchases (the average age of cars was now 8 years). Inflation might be a challenge down the line, but at present it was more of a problem in developing economies. He referred to the aggregate relative performance of managers shown in the tables on pages 9 and 10 of the JLT report (agenda pages 44 and 45) said that it was the best that he had known in his time reporting on the Fund’s managers. Over the quarter fourteen managers had delivered returns in line with or over their benchmark. The Fund would soon be disinvesting from Man, one of the managers which had not achieved their benchmark. TT International had not met their three-year target, which admittedly was a challenging one, but had improved recently to become one of the best performing managers. The other four managers who had not met their targets were all hedge funds.

A member noted that Schroder Global Equity had shown improved performance this quarter following a period of underperformance and closer monitoring by the Panel.

A Member said that she felt a little concerned that though Partners and Schroders Property were performing above their benchmark and that the relative performance of Partners was among the best of the Fund’s managers, property as an asset class was performing below its assumed strategic return. Mr Finch responded that these managers were performing well in a difficult market, but acknowledged that the assumption had been that property would perform better over the longer  ...  view the full minutes text for item 32.

RESOLVED to note the Panel workplan.