There were no apologies for absence.

There were no declarations of interest.

In accordance with the Council’s Constitution, questions that are not specific to reports on the agenda must have been received in writing 10 working days before the date of the meeting (by 5pm on 15^th May 2021.)

Questions specifically relating to reports on the agenda should be received within two working days of the normal publication date of the agenda. Please ensure that questions specifically on reports on the agenda are received by the Democratic Services Team by 5pm on Thursday 23 September 2021.

No questions had been received.

Two amendments were made to the minutes, to record Cllr Tony Owen as present and, in minute 127, resolution (2), to change the amount from £20m to $20m.

RESOLVED that, subject to the amendments above, the minutes of the meeting held on 14^th July be confirmed.

In relation to minute 127, it was confirmed that the timing of meetings would in future be about six weeks after the end of each quarter, and that further information about the increases in membership had been circulated after the last meeting.

Report FSD21057

The Committee received a summary of the investment performance of Bromley’s Pension Fund in the 1^st quarter of 2021/22. The value of the fund had risen to £1.405bn by the end of June 2021.The report also contained information on general financial and membership trends of the Pension Fund and summarised information on early retirements.

Fidelity were due to present at the Committee’s next scheduled meeting on 2^nd December, with Schroders presenting on 22^nd February. The Chairman suggested that, as he, the Vice-Chairman and the Director of Finance had met with Fidelity recently, it would be more worthwhile to invite another manager – possibly MFS.

John Arthur of MJ Hudson presented his report (Appendix 5 to the report.) The Fund was performing as expected, and outperforming benchmarks by 1%. Overall, this had been a good quarter and all managers had performed well. Most of the Fund’s risk remained in its equity position, which was 60% of the Fund, but he advised against de-risking as bond yields were so low. However, he expected inflation to peak above 4% in the UK by the end of the year which could see interest rates and bond yields rising.

Responding to questions, he expected that the third quarter would be flat or slightly down, though he was not aware of any concerns about any of the managers. On asset allocation, the Fund was 4.6% overweight on equities, but the decision to shift $20m to multi-asset income would marginally reduce this.

The Committee discussed the Revenue Account figures presented in appendix 4, which showed a surplus of £3.7m – the Director of Finance referred to the reinvestment monies impacting on the cashflow and the table would be updated in future to make that position clearer (net cash flow and cash flow before reinvestment.)

The issue of whether the Council should hold a maximum percentage of any fund was discussed – the Chairman suggested that this should be discussed further in 2022.

The Director of Finance reported that a US dollar fund had been identified to hold cash ready for investing with Morgan Stanley. Mr Arthur explained that the assets needed to be liquid and available at short notice, so the return was likely to be below 2%. 

Mr Arthur commented that he thought that inflation was being under-estimated, and while the supply chain disruption would be overcome there were cost pressures on most companies that were not just caused by restricted supply. He anticipated a period of relatively low growth with higher inflation but not significantly higher interest rates. Returns form all asset classes could be expected to be relatively low for the next decade.

The Chairman commented that the Fund’s cashflow position was likely to be strong until 2028, but this situation could change. He was a little concerned that, as equities had been strong for a good decade there might be a case for de-risking. Mr Arthur responded that de-risking should not be into government bonds – the Fund’s  ...  view the full minutes text for item 137.

Report FSD21062

MJ Hudson Allenbridge had been asked to brief the Committee on Impact Investing and Social Housing – they had provided an introduction to Impact Investing, which was also known as Environmental/Social/Governmental Investing (ISG.)  MJ Hudson Allenbridge provided recommendations on how Impact Investing should be viewed in relation to the management of the Pension Fund.

RESOLVED that the contents of the report be noted.

The Director of Finance reported that updates on the Pension Regulations were awaited which might cover the impact of the Palestine Solidarity Campaign judgement, although it was possible that primary legislation would be required.

The Director of Finance reported that this would be the last meeting attended by Katherine Ball, Principal Accountant. The Committee recorded its appreciation for her work on the Pension Fund.

RESOLVED that the Press and public be excluded during consideration of the items of business referred to below as it is likely in view of the nature of the business to be transacted or the nature of the proceedings that if members of the Press and public were present there would be disclosure to them of exempt information.

The following summaries

refer to matters

involving exempt information

The exempt minutes of the meeting on 14^th July 2021 were confirmed.

The Committee considered a report providing further information concerning the London Collective Investment Vehicle (LCIV.)

The Committee received information about Fund Manager fees.