Issue - meetings

Report FSD16032

Summary details were provided of the investment performance of Bromley’s Pension Fund for the fourth quarter of 2015/16 along with information on general financial and membership trends of the Pension Fund and summarised information on early retirements.

AllenbridgeEpic provided further detail on investment performance and Baillie Gifford provided commentary on its fourth quarter performance, future economic outlook, and recent developments in financial markets.  Representatives from Baillie Gifford reported that there was currently turmoil in the markets with external factors such as the US Elections and the British EU Referendum causing a degree of uncertainty.

The Committee were introduced to Mr Rohan Worrall an Investment Adviser from AllenbridgeEpic specialising in Fixed Income.  Mr Worrall would be attending future meetings of the Investment Sub-Committee and was likely to eventually be Mr Stevenson’s replacement as Investment Advisor to the Investment Sub-Committee.

The market value of the Fund ended the March quarter at £745.8m (£732.0m as at 31 December 2015) but as of 30 April 2016 it had fallen to £742.4m. The comparable value as at 31 March 2015 was £742.9m.

Overall, the total fund returned +1.9% (net of fees) in the latest quarter, compared to the benchmark return of +3.0%. Local authority average rankings for the March quarter were not available for the report. The Fund’s medium and long-term returns remained particularly strong.

Members of the Committee asked a number of questions of the representatives from Baillie Gifford regarding the performance of the fund, expressing concerns surrounding the poor performance of oil markets and the impact that this could have on Pension Fund investments.  Members expressed concern that the returns on the investment portfolio had reduced and a member suggested that greater returns could have been gained by investing in a FTSE 100 or FTSE 250 tracker which would carry less risk.

The Committee requested that future updates contain greater detail of the level of investment in emerging markets in order to provide greater transparency, and also include performance attribution information for the fixed income portfolio.

RESOLVED That:

(a) the report be noted;

(b)  the information regarding Performance Measurement Service as detailed in paragraph 3.3.3 of the report be noted; and

(c)  the programme for Fund Manager attendance as set out in paragraph 3.6.1 of the report be noted.