Agenda and minutes

The Democratic Services Officer advised the meeting of the 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 complete the green interest forms circulated to groups in their pre-meetings (which will be announced at the Council Meeting) 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 or a member of his staff before the meeting to expedite dealing with the item during the meeting.

There were none.

Apologies were received from Cllr Bruce Shearn and Shirley Marsh.

There was none.

There were none.

There were none.

The public and exempt minutes of the meeting of the 20^th November 2019 were approved as a correct record and signed by the Chair.

This paper reports on the performance of the Fund’s investment managers and seeks to update the Panel on routine aspects of the Fund’s investments. The report contains performance statistics for period ending 31 December 2019.

The Assistant Investments Manager introduced this item.

He drew attention to the Brunel Quarterly Performance Report, on which the Brunel representatives would comment. This report contained some strategic fund-level data, which was expected to drop out over time, since Mercer would retain responsibility for reporting performance against strategy and providing risk assurance to the Fund. The Brunel report gave information about how Brunel was managing the managers within the portfolios, and about the responsible investment performance of managers. After Brunel had made their report, Mercer would report on the extension of the Equity Protection Strategy in the light of current market conditions, and on the pre-emptive actions the Fund could take in response to RPI reform.

Mr Crozier and Mr Spencer presented the Brunel Quarterly Performance Report. At the request of the Investment Manager, Mr Crozier focused on ESG monitoring, which had not been provided to the Panel previously. He drew attention to the individual Responsible Investment dashboard given for each portfolio.

Mr Spencer commented on the portfolio reports. Members welcomed the clarity of the information about net carbon reduction. The Chair suggested that the list of top 20 holdings for each portfolio should indicate the sector to which each company belongs. Brunel was asked to report back to the Panel on how “regional exposure” could apply to companies in the UK equity portfolio, and how could UK-listed companies be classified as ‘Asian-Pacific’. The Chair suggested that it would be better if the size of the allocation to each company in a portfolio was given as a percentage rather than as an absolute value.

The Head of Business, Finance and Pensions asked whether the absolute weighted ESG scores for the portfolios were the result of a deliberate strategy for each portfolio by Brunel or were they an accident of portfolio construction. Mr Spencer replied that there was no conscious aim to achieve a specific profile for a portfolio, and that the scores were a by-product of Brunel’s approach to manager selection. The Panel had not had this kind of information before, and now had the opportunity to probe this aspect of company performance.

Mr Turner presented the Mercer Investment Performance Report.

After he had concluded his presentation, the Panel, having been satisfied that the public interest would be better served by not disclosing relevant information, RESOLVED that the public should be excluded from the meeting during the consideration of the exempt appendices to this item, and that the reporting of this part of the meeting should be prevented, in accordance with the provisions of section 100(A)(4) of the Local Government Act 1972, because of the likely disclosure of exempt information as defined in paragraph 3 of Schedule 12A of the Act as amended.

The Panel returned to open session and RESOLVED:

1.  To note information as set out in the reports.

2.  To notify to the Committee the actions recorded in the exempt minutes.

This report outlines the progress on pooling of assets with specific reference to the investment activities.

The Investment Manager presented the report.

She noted that Brunel now manages £1.4bn of the Fund’s assets. She reported that the Client Group had begun work with Brunel to define the fixed-income portfolios, which would include Avon’s Multi-asset Credit Portfolio, currently managed by Loomis Sayles. The next Oversight Board Meeting would take place on 19^th March; an update would be provided at the next Committee meeting.

The Panel, having been satisfied that the public interest would be better served by not disclosing relevant information, RESOLVED that the public should be excluded from the meeting during the consideration of the exempt appendices to this item, and that the reporting of this part of the meeting should be prevented, in accordance with the provisions of section 100(A)(4) of the Local Government Act 1972, because of the likely disclosure of exempt information as defined in paragraph 3 of Schedule 12A of the Act as amended.

The Panel returned to open session and RESOLVED:

1.  To note the progress made on the pooling of assets;

2.  To note the project plan for the transition of assets.

This report sets out the workplan for the Panel to end 2020.  The workplan is provisional as the Panel will respond to issues as they arise and as work is delegated from the Committee. 

The Investment Manager presented the report.

She said that any work arising from the Strategic Review will need to be added to the plan. There will certainly be a piece of work on the strategic benchmark. Dynamic hedging will also be added. Brunel will be attending future Panel meetings to talk about the listed markets and private market portfolios.

RESOLVED to note the workplan.