Agenda and minutes

Investment Advisory Sub-Committee
Wednesday, 16th March, 2016 10.30 am

Venue: Committee Room 3 - Civic Centre, St Peter's Square, Wolverhampton WV1 1SH

Contact: Dereck Francis  01902 555835 or Email: dereck.francis@wolverhampton.gov.uk

Items
No. Item

1.

Apologies for absence (if any)

Minutes:

Apologies for absence were submitted on behalf of Cllrs Ian Brookfield and Tersaim Singh (City of Wolverhampton Council), Cllr Mohammad Afzal (Birmingham City Council); Cllr Damian Gannon (Coventry City Council); Cllr Angela Sandison (Solihull Metropolitan Borough Council) and Mr Victor Silvester (Trade Union observer).

 

2.

Substitute members

Minutes:

No notifications of substitutes were received for the meeting.

3.

Declarations of interest (if any)

Minutes:

No declarations of interests were made.

4.

Minutes of last meeting (9 December 2015) pdf icon PDF 70 KB

[For approval]

Minutes:

Resolved:

That the minutes of the meeting held on 9 December 2015 be approved as a correct record signed by the Chair.

 

5.

Matters arising

[To consider any matters arising from the minutes of the meeting held on 26 March 2014]

Minutes:

With reference to Minute 10, ‘The Markets in Financial Investments Directive (MiFID) II’, Geik Drever, Strategic Director of Pensions reported that the implementation of MiFID II had been postponed to January 2018.  She also informed the Sub Committee that the proposed Directive had been run with three Fund Managers to determine whether the West Midlands Pension Fund would be reclassified as a professional client under the Directive.

6.

Exclusion of the press and public

[[To pass the following resolution:

 

That in accordance with Section 100A(4) of the Local Government Act 1972 the press and public be excluded from the meeting for the following items of business as they involve the likely disclosure of exempt information on the grounds shown below]

 

Part 2 – exempt items, closed to the public and press

Minutes:

Resolved:

That in accordance with Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting for the following items of business as they involve the likely disclosure of exempt information falling within the paragraph 3 of Schedule 12A of the Act.

7.

Asset Allocation and Investment Performance Quarter Four 2015 - West Midlands Pensions Fund

[To note the contents of the report]

Minutes:

GeikDrever, Strategic Director of Pensions summarised the key elements of the quarterly asset allocation and investment monitoring report for the Fund.  In doing so she also responded to the Sub-Committee’s questions on performance during the quarter of the equities portfolio, real assets and infrastructure and private equity; and opportunities for investments.

 

Councillor Peter Bilson commented that on performance, the issue was how the Fund performed against the benchmark and in that respect he was reasonable confident about the performance. In terms of investment opportunities, he reported that there would be significant opportunities for investment around the West Midlands region; the Fund would have to take a view on the opportunities the regions provides. 

 

The Strategic Director added that the Sub Committee should take a longer term view of performance of the illiquid assets eg private equity because the Fund was committed to these investments for twelve years.

 

Cllr David Sparks recalled from his previous experience on the Sub Committee the level of detailed information it had previously received on equity and property investments and that the Sub Committee regularly looked at its properties and received presentations from its property advisors. He asked whether the Sub Committee still received this information and if not, he suggested that it should be available for meetings of the Sub-Committee.

 

The Strategic Director reported that there was a property list/ list of the Fund’s other investment portfolio, however, it was a bulky document and it had previously been agreed by the Committee to no longer print it for each meeting, but instead to make it available to Trustees at the Fund offices.  She suggested that any member of the Sub Committee could view the investment portfolio document by visiting the Pension Fund office.  She also confirmed that the Sub Committee had recently received a presentation from its property advisors, Messrs Clifford-Brown, Daggett and Roult (CBRE) and had also received presentations from its other advisors such as Pensions Infrastructure Platform (PIP)  Royal London Asset Management.  A Property tour was also arranged for the members in the last two years. The next Trustee training sessions on 21 – 23 March feature a number of our global and emerging markets managers and RI lawyers, as well as a property manager on the programme

 

Cllr Sparks added that he did not feel that looking at property once a year was satisfactory and he expressed his concern that the Sub Committee could not now say it was discharging its responsibilities when it was receiving less information on shares, property and regular reports from the its investment managers than it had in the recent past.  He asked that the Chair of the Sub Committee find a satisfactory way to say that the Sub Committee had looked at the Fund’s property investments.  In terms of the Fund’s shareholdings, he also asked for a broad indication of the companies the Fund invested in.

 

On this latter point the Strategic Director reported that the information was on the Fund’s website.  ...  view the full minutes text for item 7.

8.

Asset Allocation and Investment Monitoring report - Quarter Four 2015 - West Midlands Integrated Transport Authority

[To not the contents of the report]

Minutes:

Geik Drever, Strategic Director of Pensions summarised the key elements of the quarterly asset allocation and investment monitoring report for the Fund. 

 

Resolved:

          That the contents of the asset allocation and investment monitoring report for the quarter ended 30 June 2015 be noted.

 

9.

Economic and Market Update - March 2016

[To note the contents of the report]

Minutes:

The Sub Committee received a report which summarised the key elements of the review of the global economy and investment markets produced by the Fund’s Investment Advisers Hymans, Robertson.

 

In response to the Sub Committee’s questions on the percentage total of the asset class outlook, Geik Drever, Strategic Director of Pensions reported that the asset classes were broad and did not cover all the asset classes in which the Fund invests. Consequently the tables of asset classes did not add up to 100%.  The Strategic Director of Pensions also responded to a question on the target weight for the property asset class in the light of a comment she had made during the discussion on item 7 above where a different percentage weighting was reported.

 

Resolved:

That the global economic and market update paper prepared by the Fund’s adviser, Hymans Robertson be noted.