Agenda item

The Investments Manager presented the report. She reported that a review of the original Brunel business case approved by Council had begun, and should be completed by February/March of next year.

A Member noted that it was reported in paragraph 4.2(f) that Brunel’s Responsible Investing Policy included all the aspects within Avon’s current RI policy, and asked whether it went beyond it any way. The Investments Manager replied that it did as it will have a pool wide voting policy for segregated mandates which the Fund does not currently have; also there should be greater disclosure and transparency of reporting, because Brunel had greater resources for this.

In response to a question from the Vice-Chair, she explained that it had been agreed at the outset that each of the ten funds in the Brunel partnership would hold an equal 10% of Brunel shares, and that the size of their shareholding would not depend on the number of their members or the value of their assets. The Vice-Chair asked whether there was any risk associated with equal shareholdings. The Head of Business, Finance and Pensions said that the pooling agreement actually makes it very difficult for a fund to leave the pool. The fact that Avon was the biggest fund in the pool meant that its ability to achieve economies of scale from pooling was not necessarily as great as that of other funds, though it would undoubtedly make savings in some portfolios.

A Member was concerned to note that there were three apologies from Pension Committee representatives at the last meeting of the Oversight Board, and asked whether substitutes were allowed. The Head of Business, Finance and Pensions replied that this was discussed at the last meeting of the Oversight Board, as a result of which there is a proposal to amend the shareholders’ agreement to allow funds to send a properly-trained fund committee member as a substitute to meetings of the Board.

Before discussing the exempt appendices to this item the Committee, having been satisfied that the public interest would be better served by not disclosing relevant information, RESOLVED that the public should be excluded during the discussion of exempt appendices 2a, 2b, 3a and 3b to this item and that the reporting of this part of the meeting 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 the Schedule 12A of the Act as amended.

RESOLVED to note:

1. the progress on the pooling of assets;

2. the updated project plan for the transition of assets;

3. the Internal Audit report.