Agenda item

Review of Investment Performance for Periods Ending 31 December 2019

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.

Minutes:

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.

 

 

 

Supporting documents: