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Issue - meetings

Review of the Investment Strategy Statement

Meeting: 09/05/2017 - Pension Board (Item 5)

5 Review of the Investment Strategy Statement pdf icon PDF 567 KB

Report of the City Treasurer.

Minutes:

5.1       Peter Carpenter (Interim Tri-Borough Director of Treasury and Pensions) presented the report and stated that the Investment Strategy Statement (ISS) was one of the areas that had been identified by the Board to be scrutinised. Peter Carpenter advised that the ISS, which set out the Council’s policy on ethical, social and corporate governance issues for both its own investments and those being managed through the London CIV, had replaced the Statement of Investment Principles. A draft ISS had been provided by the Pension Fund’s actuary and the same draft had been issued to the other tri-boroughs, who also used the same actuary, to ensure standardisation. Members noted that around 70% of the Fund’s assets would be under the CIV by the end of June.

 

5.2       Peter Carpenter advised that the advantages of having assets under the London CIV included the ability of the CIV to monitor assets on a daily basis, as well as having more resources to look at governance and voting issues. Peter Carpenter stated that every effort was being made to ensure that all 33 local authority members were in agreement in working closely together, and Westminster, as well as other boroughs such as Wandsworth, were well advanced in transferring assets to the CIV. There was a concern that the Government would want to use Funds for infrastructure in future and so it was important that the local authorities within the CIV worked closely together to enhance the level of engagement with both external managers and the underlying companies in which the CIV invests.

 

5.3       During Members’ discussions, further information was asked in respect of the London CIV increasing its number of staff. A Member referred to voting rights being delegated to the CIV and commented that there may be some instances where this could potentially work against the interest of the Westminster Fund, such as determining the salary of a CIV Executive Director. He also asked how and when CIV voting would be reported back to the Pension Fund Committee and the Board. Members enquired when CIV reports would be made available to the Pension Fund Committee and the Board.

 

5.4       Members then considered the ISS. It was asked when the £178m of assets already transferred from the Fund to the CIV had taken place. Questions were raised as to whether it was appropriate that the Pension Fund Committee delegates social, environmental and ethical policy to the investment managers. It was also queried whether it was prudent to incorporate a report on voting activity as part of the Pension Fund annual report. Another Member commented that it was desirable as it provided transparency.

 

5.5       In reply to issues raised by Members, Peter Carpenter advised that the London CIV was making active attempts to recruit additional staff, including placing advertisements with London Councils. Each participating London borough would be contributing an additional £75k to the CIV this year. Members were informed that all of the Westminster Fund’s equities assets would be under the CIV and  ...  view the full minutes text for item 5