To consider the report
Minutes:
The Investment
Manager submitted a report updating Members on the developments of the Wales
Pension Partnership. It was reported that partnership
performance had been at a very high standard and collaboration was going from
strength to strength. Members were reminded that
£606.2m of the Gwynedd Fund’s equity investments had been transferred to the
Wales Pension Partnership Fund in February 2019, with the amount divided
equally into two funds. It was reiterated that the
performance of both funds were higher than the benchmark and that this was very
encouraging news. The next step would involve transferring current investments
with Fidelity (£161.6m - Global Equity) and Insight (£292.0m - Bonds) to two
Fixed Income funds. It was noted that Russell
Investment was monitoring performance and conducting frequent discussions and
meetings with the Fund so that the transfer could be completed in April 2020.
Following the Fixed
Income transfers, it was reported that the aim was to
determine the ideal investment management structure for the Emerging Markets
fund. It was highlighted that there was approximately £52m to be transferred to
this fund from the Fidelity company and that
discussions were being held with Russell Investment to consider suitable funds.
It was added that Russell Investments considered
environmental, social and governmental requirements when investing responsibly
and they looked carefully for ways to meet these needs, along with low carbon
investments, when developing the form and management of the Wales Pension
Partnership Fund but without losing returns.
Reference was made
to the arrangements of the Partnership's Joint Governance Committee and it was
noted that there was an intention to discuss whether or not
the arrangements were still appropriate at their next meeting on 12 March. It was added that there was a suggestion to include
representation from Pension Boards (within the constituent authorities) on the
Joint Committee.
The officer was thanked for
the information.
During the ensuing discussion, the following observations were noted:
·
That the Gwynedd Fund
had agreed and adopted responsible investment principles and these needed to be
adhered to when considering future investments. This was a strong stance and no
influence should seek to change the viewpoint.
·
Need to avoid a rushed
way of thinking and be influenced by others.
·
The Board had a
responsibility to challenge decisions and ensure that guidelines were followed.
·
There was a need to
ensure the right balance so that expectations were being met.
·
That the 17 sustainable aims were being addressed -
a suggestion to hold a training session on these aims with Pension Committee
Members.
·
Wales Pension Partnership Governance Arrangements -
a suggestion that Pension Board Chairs could attend the joint committee
meetings as observers - able to provide an input but no vote.
·
Possible to recommend two observers (one from South
Wales and one from North Wales).
·
A members'
representative should not be an independent chair.
·
The exercise must add
value.
·
CIPFA recommended the exercise and other Funds were
implementing it - Wales Partnership needed to do the same.
·
The Pensions Regulator pressed on the Boards to
examine how funds operated - this was a good reason to include representatives
from the Pension Boards on the Joint Committee.
·
A suggestion for the Pensions Committee to reach a
decision on the matter and refer the decision to the Joint Committee.
The
information was ACCEPTED.
Supporting documents: