Issue - meetings

To consider the report and approve the Business Plan

DECISION

To accept the report and approve the Business Plan

Note

Request a Strategic Plan / formal document to outline WPP IM Co's direction to reduce costs following the transition period.

The Investment Manager submitted a report, which included an Initial Business Plan for the Investment Management Company (WPP IM Co). It was explained that from 1 April 2026, the WPP Investment Management Company Limited (WPP IM Co) would be responsible for investment advice and implementing investments worth over £25 billion, on behalf of the eight Welsh Local Government Pension Funds. It was reiterated that this Initial Business Plan was the first formal account that Authorities had received, and the Business Plan had been approved by the Joint Governance Committee on 10 March 2026.

It was highlighted that the Business Plan detailed how the Investment Management Company would be achieving the strategic objectives (trustees and Member benefit duty; Implementing investment; Investment advice; ⁠Responsible investment and stewardship; Local and Welsh investment; Governance, accountability and transparency; Regulatory compliance; Team and capacity development), as well as setting a governance and supervision plan, financial summary, investment management method, implementation and staffing, risk management and compliance and responsible investment in place. 

The members thanked the officer for the report.

In response to a comment that staffing costs (£4.2m estimate) were substantially higher than the Partnership's current staffing expenditure, and whether equivalent figures were available, it was noted that the current costs were very low, but that there would be a substantial increase in the transitional period when establishing the new arrangements. The intention was, as the expertise was established in-house, that the costs of external Investment Manager fees would reduce substantially.

In response to a question regarding dividend payments to the Members of the Board of Shareholders, it was noted that salaries would be paid, and not a bonus.  It was reported that a Shadow Board had been established since the WPP IM Co Investment Management Company had been registered with Companies House. It was reiterated that the Shareholders were the eight Constituent Authorities and therefore if there were dividends to share, these would be paid to the individual Councils. It was also noted that there was an intention to establish a Remuneration Policy.  Appointments to the IM Co Board are in the process of receiving approval from the Financial Services Authority (FCA).

In response to a comment that a Strategic Plan / formal document was needed which would outline the direction of WPP IM Co to reduce costs following the transition period, it was noted that there was an intention to employ 12 staff members in April, with the figure increasing to 24 by December 2026 - a likely increase in costs. Nevertheless, it was noted that there was an expectation for Investment Manager / external Fund costs to reduce in the long-term - time will tell; the Government's aspiration was to reduce the fees.

RESOLVED

To accept the report and approve the Business Plan

Note:

Request a Strategic Plan / formal document to outline WPP IM Co's direction to reduce costs following the transition period.