Agenda item

A Representative from Hymans Robertson LLP, the newly appointed independent investment advisor, presented the Initial review of the pension fund asset allocation.

The Committee considered the report and supplementary information. The Chairman invited Members to indicate whether they had any questions regarding the information contained in the exempt report, which would require the Committee to go into private session. The questions were answered in the private session.

The Chairman moved a motion that was duly seconded to amend the recommendation as follows.

·         To move 10% or 15% of the fund out of Corporate Bonds currently managed Newton Investment Management and Legal and General Investment Management. The committee agreed to move 15% of the fund, with the timing to be delegated to the s151 Officer, in consultation with the Chair of the Pension Fund Committee, following consultation with fund managers.

·         The proceeds to be invested in Schroder Strategic Bond Fund. This would be subject to a due diligence meeting between Schroder Investment Management and a working party of the Pension Fund compromising of Councillors Shooter, Marshall, Zinkin and Mittra. Following the meeting the working party would report back to the Chief Operating officer, the s151 Officer Strategic Bond Fund to execute the decision of the committee.

·         To move 20% of the Fund out of Diversified Growth Funds (10% from each of Schroder Investment Management and Newton Investment Management). This will be implemented by moving 1/12th of 20% each month for 12 months, subject to redemption dates, starting as soon as practical.

·         These proceeds will be invested in equities in Global Passive Funds to be managed by Legal and General Investment Management. This will be split between a global market cap fund and a global RAFI fund. One currency hedged fund and the other unhedged.

·         Pension Fund Committee agreed to delegate the execution of these decisions to Section 151 Officer in Consultation with the Chair of the Pension Fund Committee.

The Committee unanimously agreed the motion; the motion was therefore carried.

The Committee;

RESOLVED –

1.    To move 15% of the fund out of Corporate Bonds currently managed Newton Investment Management and Legal and General Investment Management with the timing to be delegated to the s151 Officer, in consultation with the Chair of the Pension Fund Committee, following consultation with fund managers

2.    That the proceeds of the Corporate Bonds to be invested in Schroder Strategic Bond Fund, subject to a due diligence meeting between Schroder Investment Management and the Pension Fund working party, who will report back to the Section 151 Officer.

3.    To move 20% of the Fund out of Diversified Growth Funds (10% from each of Schroder Investment Management and Newton Investment Management). This will be implemented by moving 1/12th of 20% each month for 12 months, subject to redemption dates, starting as soon as practical.

4.    These proceeds of the Diversified Growth Funds will be invested in equities in Global Passive Funds to be managed by Legal and General Investment Management. This will be split between a global market cap fund and a global RAFI fund. One currency hedged fund and the other unhedged.

5.    To delegate the execution of these decisions to the Section 151 Officer in Consultation with the Chair of the Pension Fund Committee.