To consider the Investment Managers Report
Submitted - a report by the Investment Manager stating that since its establishment in 2017, the Partnership had been going from strength to strength with officers meeting often. Since the Covid-19 pandemic period, it was noted all the Partnership's events had been held virtually, and work to launch new funds and to hold a number of events had taken place.
Attention was drawn to the Global Growth Fund's performance up to 30 September 2020. It was reported that the performance of this fund before the pandemic was higher than the benchmark with a strong performance by Baillie Gifford and Veritas. It was highlighted that this portfolio had 'deep value' investments, and due to the impact of the pandemic, it was noted that recent performance had fallen behind the benchmark. It appeared that the traditional sectors such as oil and financials had performed poorly and sectors such as technology had performed relatively well. It was explained that Russell Investments continually monitored the allocation of this fund.
Reference was made to the transfer of fixed income that had been transferred in July and October 2020. An investment of £166,119,549.08 with Fidelity Global Equity had been transferred to the Multi Asset Credit Fund and an investment of £291,238,172.22 with Insight had been transferred to the Absolute Return Bond fund.
Attention was drawn to Representation of the Pension Boards on the Partnership's Joint Committee noting that this topic had been debated for some time now. It was reported that the Head of Finance Department had attended a meeting recently on the matter. The outcome of the discussion was that the Joint Committee would include 8 members of the Fund (with one vote each) and representation from the Pension Boards (within the constituent authorities - without a vote). It was reported that the majority of funds agreed that status needed to be given to representation of the Board, but a unanimous decision was required before progressing. It was noted that any change would involve submitting a recommendation to every individual Council to be accepted at a meeting of the Full Council. It was reiterated that one further meeting had been arranged to re-discuss prior to submitting a proposal to the Joint Committee.
Members expressed their thanks for the report.
During the ensuing discussion, the following observations were noted:
• Accepted that fees were associated with investments, but it did not reflect the fixed costs of establishing the Partnership.
• Accepted the transfers but was ending investments with Fidelity a good decision given that Fidelity's performance had been good?
• A more formal arrangement was needed, which referred observations / reflected the recommendations of the Board and the way they were referred to the Committee, and perhaps to the Joint Committee - a suggestion was made to submit a report by the Board to the Committee or for a Board member to submit an item verbally.
In response to the publication of fixed fees, it was noted that the delivery scope of this was in 2020/21, by creating tables that would reflect the comparisons and actual costs.
In response to investments with Fidelity coming to an end and whether or not this was a good decision considering their performance, it was agreed that Fidelity's performance had been excellent, but following pressures from aggregate investment (where there was less risk and more assurance in investing with more than one manager), it was agreed to concur with the majority. It was reiterated that Russell Investments were monitoring the performance, and should there be an under-performance it would be possible to adapt due to the flexibility of having more than one manager.
In response to establishing a formal procedure to share the voice of the Board, it was noted that the Committee Chair represented Gwynedd on the Partnership and observed meetings of the Gwynedd Pension Board. It was noted that there had been several examples of the Board's opinion being submitted to the Gwynedd Pensions Committee, but a situation where the Board's opinion needed to be submitted to the Partnership had not arisen. It was suggested that submitting a report in writing or orally offering recommendations to the Committee would be acceptable.
RESOLVED to accept the information.