Agenda item

Report FSD16067

Details were provided of the Fund’s investment performance for the first quarter, 2016/17. Additional detail was provided in an appended report from the Fund’s external advisers, AllenbridgeEpic. Baillie Gifford provided further commentary on its performance and view of the economic outlook.

Information on general financial and membership trends of the Pension Fund was also outlined along with summarised information on early retirements.

The market value of the Fund ended the June quarter at £798.2m and had risen further to £851.8m as at 31^st July. Overall, the total fund returned +7.0% (net of fees) in the latest quarter, compared to the benchmark return of +7.3%.

Following termination of the performance measurement service by WM Company (State Street), Local Authority comparator data was no longer available and most funds would use their custodian to provide a performance measurement service in future. Accordingly, and having agreed to waive competitive tender, the Director of Finance awarded a contract for performance measurement to the Fund’s custodian, BNY Mellon, for a period of up to three years, to be reviewed annually. Although the service would not include LA comparator data (as BNY Mellon was not custodian for all LGPS Funds), there were a couple of potential providers for this; however, take up from other Funds was presently unknown and officers would continue to monitor the position, reporting back to a future meeting. 

A timetable of Fund Manager attendance for Sub-Committee meetings in 2016/17 had been proposed as follows:

·  16^th November 2016 – Blackrock (global equities)

·  22^nd February 2017 – Standard Life (DGF) and Fidelity (fixed income)

·  16^th May 2017 – Baillie Gifford (global equities, fixed income and DGF).

With further services being outsourced as part of the Council’s commissioning programme, an application from Amey was being progressed for admitted body status in advance of the transfer of Total Facilities Management Services from 1^st October 2016.

Following approval by the Sub-Committee and Full Council to support Bromley College’s request for the London Pension Funds Authority to be its administering body in place of L B Bromley, a direction order was approved by the Secretary of State and the transfer of liabilities had now taken place with effect from 1^st August 2016. Discussions were currently in progress regarding the transfer of an appropriate share of the Fund’s assets and transfer of administration functions. Authority to agree the asset share had been delegated to the Director of Finance, in consultation with the Chairman and Vice-Chairman of the Sub-Committee and the advice of AllenbridgeEpic.

In discussion, it was agreed that the style of quarterly performance and fund manager reporting should be modified in future so that fund manager and other comments are provided not only for the relevant quarter but also for the period between quarter end  and a Sub Committee meeting (by means of an update). This would be conveyed to all Fund Managers.

RESOLVED that:

(1)  the contents of Report FSD16067 be noted;

(2)  information regarding the Performance Management Service, as detailed at paragraph 3.3.3 of Report FSD16067, be noted;

(3)  the position regarding admission agreements for outsourced services, as outlined at section 3.7 of Report FSD16067, be noted; and

(4) the position regarding Bromley College, as outlined at section 3.8 of Report FSD16067, be noted.