Agenda item

To consider the report

a)    Submitted - a report by the Investment Manager informing the Members of the quarterly (and yearly) monitoring being undertaken by the Investment Panel on the Pension Fund's investments performance. It was reported that the Gwynedd Pension Fund was in a relatively healthy position with the value of the fund now £2.7 billion and has increased gradually since 2011.

Although the fund saw a 10.0% performance, it was disappointing that this was below the benchmark for the year. Nevertheless, it was noted that a situation like this was common for local government pension schemes, and that the performance of the Gwynedd Pension Fund continued to be within the highest quartile of British funds, and was in 23rd place out of a 100 funds.

In the context of the performance of equity investment managers, where a high percentage of the Fund's investments had been invested, it was highlighted that the performance, which was lower than the benchmark, driven by the negative performance of Baillie Gifford in the Global Growth fund. It was reiterated that Baillie Gifford had performed excellently over the previous years and the importance of the need to assess the need over a period of at least three years in this field, before raising concerns.

In the context of fixed income managers, it was explained that this performance had also been below the benchmark considering the instability in the Russian market. It was reiterated that these investments were relatively new (having started to invest in the last two years), and therefore the situation was being monitored regularly to ensure that there was no further reduction.

Reference was made to the historical performance of the Fund over the past decade, noting the importance of assessing the performance over a number of years, since long-term investment was the objective. It was reiterated that the value of the fund had increased gradually for some time, and that the Fund was in 7th position from all Local Government Pension Fund Schemes and had therefore performed well.

Thanks were expressed for the report.

b)    In response to a question on the performance of Baillie Gifford and when Hymans would step in should poor performance become the norm over a number of years, it was highlighted that the matter had been discussed recently at a meeting of the Wales Pension Partnership where it was concluded that there would be a need to consult with the Partnership before the opinion was submitted to the Joint Committee for a decision.  It was reiterated that Baillie Gifford had been responsible for previous excellent performance, which gave confidence in the company. It was noted that discussions were being held and although the period was uncertain, that there was confidence in their stock selections and it was believed that things would come good.

The Chair of the Pensions Committee reiterated that quality assurance had to be considered and that it was essential to hold discussions.

c)    In response to a question regarding links to crimes against human rights, national developments around matters such as the 'Boycott, Divestment, Sanctions (BDS)' movement were discussed, ensuring that the Board was aware of matters or allegations that were raised in the press. It was suggested that a request should be made to the Managers, or to the Voting and Engagement Provider (Robeco), for information and that a joint discussion with members of the Pensions Committee in quarterly sessions with Managers were arranged.

RESOLVED to accept the information