Agenda item

The Head of Business, Finance and Pensions updated the Board.

He reported that State Street had been appointed Custodian for BPP the previous month, which will replace the existing arrangements across the BPP funds. The partner funds’ assets were now being transitioned to State Street. It was hoped that transition would be completed by 31^st March 2018. Once the process is complete, tenders would be issued for new asset managers to whom to transfer the funds, which might take another two years. The main concern at the moment was that the Fund should not lose track of any of its assets during the transition process. The appointment of senior officers was ongoing. Four officers from the APF Investment Team had left to join Brunel. The Investment Manager and another member of the Team had remained with the Fund; a retention package had been put in place because of the competition from other funds.

He referred to the Brunel governance arrangements chart on agenda page 34. He said that the administering authorities of the ten Brunel funds took different approaches to allocating shareholder responsibility. For some it lies with the S151 Officer, for others with the Committee Chair, for others, like Bath and North East Somerset, with the Council Leader. The Oversight Board comprises one representative of each fund and two independent members. It had its first meeting in September, and considered remuneration policy and contingency funding for the transition plan. Agendas for the Oversight Board are prepared by the Client Group, which comprises senior investment officers from each of the member funds. The Client Group has the responsibility of monitoring whether the Brunel Company is complying with its contractual obligations. A number of events for stakeholders were planned for the coming months. He said that the structure diagram did not show the level of communication that was actually taking place, nor the internal structure of the Brunel company, for example a Board of Directors, a Remuneration Committee, a Risk Committee and an Investment Committee. The company is going through the process of achieving FCA approval at the moment. Also ongoing is the process for the funds to achieve professional investor status under MIFID II.

Members asked questions to which the Head of Business, Finance and Pensions responded:

·  The development of a communication plan for stakeholders had been deferred for the time being because so much was going at the moment. There was information available on the Brunel website. Brunel now produced a newsletter, which was available on the website. There were Brunel stakeholder events on 14^th, 15^th and 17^th November.

·  The establishment of Brunel had no impact on the responsibilities of the APF Committee. The responsibilities of Brunel were operational.

·  The question of whether papers and minutes of the Oversight Board were in the public domain or would be provided as confidential documents to BPP LPBs would be raised with the Oversight Board. The Pension Board hoped this issue would be resolved and reported to its next meeting.

RESOLVED to note the update.