To receive a presentation from Brunel Pension Partnership Ltd.
Minutes:
The Committee received a presentation from Matthew Trebilcock, Brunel Pensions
Partnership Ltd, the Fund’s Local Government Pension Scheme (LGPS) investment
pooling manager. The presentation covered progress with asset transitions to Brunel
portfolios and other developments since the last meeting of the Committee held on
21 June 2018.
The transition of approximately £6 billion of client fund assets into Brunel’s passive
portfolios was successfully completed in July 2018. Annual fee savings for the client
funds in total were estimated to be approximately £1.1 million better than those
assumed in the Final Business Case (FBC) for the pooling project, with transition
costs also significantly lower than estimated in the FBC.
Brunel’s Authorised Contractual Scheme (ACS) prospectus was submitted to the Financial Conduct Authority (FCA) on 10 September 2018. The first portfolios to be launched through the Brunel ACS were planned to be (active) UK Equities and Global Low Volatility Equities, with transition of assets expected in November 2018.
The manager selection process for the two new portfolios was near completion, with the announcement of the results expected shortly. Estimated fee savings from the UK Equity transition were expected to be significantly better than those assumed in the FBC. Brunel were asking for confirmation of commitments to the two new portfolios by 30 September 2018.
In response to queries from the Independent Adviser regarding the results of this exercise, the investment pooling manager expanded on the selection process that had been followed including the additional due diligence that had been undertaken. Further details of the strategies and teams of the successful bidders were requested.
In Private Markets, significant Secured Income commitments were close to completion with good progress also in identifying Private Equity opportunities. Good progress had been made in the establishment of Brunel as the ‘multi-manager’ for the clients’ investments in pooled property funds. This excluded Dorset whose property investments (direct and pooled) would continue to be managed by CBRE.
The Independent Adviser was happy with progress in Private Markets. He believed that Dorset had demonstrated commitment to the Brunel approach by making allocations to the Private Equity and Secured Income portfolios.
The transition plan for all remaining portfolios was under review, based upon experience gained to date, and client expectations and priorities. The Independent Adviser asked if the transition plan for the Diversified Growth Fund (DGF) portfolio could be accelerated. The investment pooling manager explained that as part of the review all client funds had been asked to highlight their priorities. A number of client funds, including Dorset, had identified DGF as a high priority.
The Fund Administrator noted the good progress in implementation to date but asked for an update on additional costs. The investment pooling manager expected the outcome of the review to recommend extending the transition period from two to three years, but also with a requirement for some additional resource. A draft plan with indicative costs and benefits for different options would be presented to the Brunel Oversight Board on 27 September 2018 for feedback and direction.
Resolved
That further details of the strategies and teams of the successful bidders for UK
Equities be provided by Brunel.