Meeting documents

To receive the following reports (attached):

(a)          UK Equity Report

(b)          Global Equities

(c)          Royal London Asset Management – Corporate Bonds

(d)          CBRE Global Investors – Property

(e)          Insight Investment – Liability Hedging

(a) UK Equity Report

The Committee considered a report by the Finance Manager (Treasury and

Pensions) which summarised the performance of the internally managed UK equities

passive portfolio, the AXA Framlington Fund and the Schroders Small Cap Fund.

The Finance Manager (Treasury and Pensions) highlighted that the return from the internally managed passive portfolio was inside the agreed tolerance of +/- 0.5% for the quarter, and for the 12 months, 3 years and 5 years ending 31 March 2017. 

The performance of AXA was also highlighted, as the recovery from the poor absolute and relative performance for the quarter ending 30 June 2016 had been minimal in the financial year to 31 March 2017.  Further to the discussions earlier in the meeting under matters arising, the Finance Manager (Treasury and Pensions) added that AXA’s bias towards mid-cap stocks should complement the internally managed portfolio’s inherent bias towards the largest companies in the FTSE 100. 

Noted

(b) Global Equities Report

The Committee considered a report by the Finance Manager (Treasury and

Pensions) which summarised the performance of the three Global Equities managers

Allianz, Investec and Wellington.  He highlighted that all three managers had

produced very high absolute returns but Allianz and Investec were still below their

benchmark for the 12 months to 31 March 2017.  The Independent Adviser

noted that the more traditional approach of Wellington appeared to have performed

better to date than the factor based approaches of Allianz and Investec.

Noted

(c) Royal London Asset Management (rlam)

The Committee considered a report from Royal London Asset Management (rlam) on the Corporate Bond portfolio.  The Finance Manager (Treasury and Pensions) highlighted the good absolute and relative performance over the quarter, one, three and five year periods, but said that relative performance since inception was still marginally negative, due to the banking crisis which occurred soon after inception.

Noted

(d) CBRE Global Investors

The Committee considered a report from CBRE Global Investors, the Fund’s

Property Manager.  The Interim Chief Treasury and Pensions Manager highlighted

that performance was slightly below benchmark for the quarter but above benchmark

for one, three and five years to 31 March 2017. He highlighted the low

vacancy rate of 2.5% which was considered a key driver of performance.  He

informed members that the development of Cambridge Science Park had ‘broken

ground’ and that the purchase of Waterloo Plaza was imminent.

The Vice-Chairman raised a concern that the average lease length of the Fund’s

holdings were higher than the benchmark.  The Interim Chief Treasury and Pensions

Manager replied that CBRE actively looked to renegotiate leases as they approached

maturity, but he highlighted that a key issue to be addressed was the high number of

leases that expired in 2020.

Noted

(e) Insight Investment

The Committee considered a report from Insight Investment, who had the mandate

for the liability matching strategy.  The Interim Chief Treasury and Pensions Manager

highlighted that the valuation (after additional investment) had increased by

approximately 50% over the financial year but noted that liabilities would also have

increased over that period. 

Noted