Meeting documents

To receive the following reports:

(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 Investments) which summarised the performance of the internally managed UK equities passive portfolio, the AXA Framlington Fund and the Schroders Small Cap Fund.  He reported that the return from the internally managed passive portfolio was inside the agreed tolerance of +/- 0.5%.  He added that both external managers had performed well in the quarter, and that, over the longer term, AXA had recovered much of the lost ground from the previous year. 

The Vice-Chairman said that because of the volume and level of detail in the manager reports it was difficult to spot the key issues or concerns that might warrant further consideration by the Committee.  The Fund Administrator agreed and proposed that in future key issues across all managers would be highlighted in the Fund Administrator’s report, with the detailed reports from managers included as appendices.

Resolved

That all key issues relating to all managers would be highlighted in the Fund Administrator’s report, with the reports from managers included as appendices.

(b) Global Equities Report

The Committee considered a report by the Finance Manager (Treasury and Investments) which summarised the performance of the three Global Equities’ managers Allianz, Investec and Wellington.  He highlighted that all three managers had a relatively flat quarter, very high absolute returns over the longer term, but Allianz and Investec were still marginally below their benchmark since inception in mid-December 2015. 

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 Investments) highlighted the outperformance of their benchmark over the quarter, one, three and five year periods.  Relative performance since inception was still marginally negative, due to the banking crisis which occurred soon after inception, but was now very close to becoming positive.

Noted

(d) CBRE Global Investors

The Committee considered a report from CBRE Global Investors, the Fund’s Property Manager.  The Fund Administrator told members that the development of Cambridge Science Park was progressing well and the purchase of Park Plaza, Waterloo, had completed in July.  He said that CBRE’s legal advisers had dealt with the occupation of the Fund’s property in Great Suffolk Street by squatters very effectively, efficiently and promptly.

The Fund Administrator highlighted a key issue to be addressed by CBRE was the high number of leases that would expire in 2020.  Negotiations with most tenants had begun, but further detail from CBRE would be sought by officers to provide reassurance to members that this risk would be addressed.

A member asked if the Fund had considered investing in the Dorset Innovation Park.  The Fund Administrator replied that it had been the long standing policy of the Fund not to invest in Dorset.  The Independent Adviser added that the Fund seldom invested in development projects, with Cambridge Science Park a notable exception.

Resolved

That further details of the renegotiation of all leases expiring in 2020 would be sought from CBRE.

(e) Insight Investment

The Committee considered a report from Insight Investment, who had the mandate for the liability matching strategy.  The Fund Administrator highlighted that the negative absolute performance for the quarter meant that the Fund’s liabilities would have decreased over the same period.  The Independent Adviser added that the outperformance against benchmark gave comfort to the decision to remain with an active mandate.

Noted