Agenda and minutes

Apologies for absence was received from Councillor Matthew Kirk.

Apologies for lateness were received from Councillors Heather Johnson and James Slater.

There were none.

Webcasting

The Chair announced that the meeting was being broadcast live to the internet and would be capable of repeated viewing and copies of the recording could be made available to those that requested them. Those seated in the Chamber were deemed to be consenting to being filmed. Anyone wishing to avoid appearing on the webcast should move to one of the galleries.

Welcome

Councillor Madlani welcomed back the Principal Lawyer Joanne Reeves who was returning as the Committee’s Legal Adviser after a 7-year absence and replacing Ros Alexander. Also welcomed to the meeting was the Council’s new Deputy Borough Solicitor Joyce Golder who had joined the Council from Westminster City Council.

Requests to speak at the Committee on a matter within its terms of reference must be made in writing to the clerk named on the front of this agenda by 5pm two working days before the meeting.

The Chair advised that two deputation requests had been received from Camden Friends of Palestine and UK Lawyers for Israel and neither had been accepted on this occasion.

He explained that the Committee had heard a similar deputation from the Camden Palestine Solidarity Campaign at its meeting in July, and as a rule of thumb he tended not to allow deputations on the same topic more than twice in the calendar year. He with Council Officers had also had a meeting with the Palestine Solidarity Campaign last Wednesday where a number of actions were agreed and after further information had recently been received, he was keen to have the chance to work on this. He was collaborating with the Local Authority Pension Fund Forum (LAPFF) and London CIV around the changing and evolving legal status of engagement.

He further explained that the reason for refusing the deputation was not due to a lack of will to engage with the campaign but it was to ensure there could be a meaningful and constructive discussion and would welcome a future deputation to engage further on the topic. The second deputation was dependent on the first being heard so that did not materialise.

There was none.

To approve as a correct record the Minutes of the meeting held on 10 July 2024.

RESOLVED –

THAT the minutes of the meeting of the Pension Committee held on 10^th July 2024 be approved and signed as a correct record.

Report of the Executive Director Corporate Services.

This report presents the performance of the Pension Fund investment portfolio and that of the individual investment managers for the quarter ended 30 June 2024.

Consideration was given to the report of the Executive Director Corporate Services.

The Treasury and Pension Fund Manager introduced the report which outlined the performance of the Camden Pension Fund investment portfolio and the individual investment managers for the quarter ended 30 June 2024.

She highlighted that as an overview of the financial market global equities had performed really well with positive returns in quarter 2 mainly driven by advancements in Artificial Intelligence (AI) and favourable economic data as evidenced by the FTSE All World return increasing by 2.9% for the quarter. The UK equities had outperformed global equities with stronger than expected GDP data and declining inflation noting, however that it was important to keep in mind that there were still inflationary pressures particularly around core CPI services.

With regards to liability monitoring, asset performance remained well above the actuary expectations. In respect of the Funds fossil fuel exposure and the percentage of the fund’s portfolio invested in Carbon Underground 200 Index of companies compared to previous reports from last year there had been a reduction in the proportion of all assets’ exposure from 2.10% in December 2023 to 1.99% as at June 2024 and a reduction in investment in Carbon Underground 200 Index from 1.42% in December 2023 to 0.9% this quarter.

The overall fund value was £2.120billion as at 30 June 2024. The overall fund performance this quarter achieved a 1.03% increase.

Karen Shackleton, Independent Investment Advisor, provided the committee with an overview of her comments on the financial markets and provided detail on the performance of the individual Investment Managers, as set out in Appendix A to the report.

She highlighted that:

Baillie Gifford, the growth global equity manager had a better showing than Harris this quarter by 4.5% but were behind the growth index which returned 6%. However, over the 3-year period they were still a fair way behind their target and had a lot of ground to make up. The best performing stocks in absolute terms were the tech and pharmaceutical stocks. Nvidia was underweight compared with the index on a relative basis. The portfolio had 75% of the intensity in terms of weighted average carbon intensity of the full market capitalisation index which was a positive and sustainable strategy and designed to have a lower carbon intensity than the market capitalisation index.

Harris, the Global Equity Value Manager underperformed during this quarter which was due to poor stock selection as had been the case over the past 5 quarters. There was concern with Harris because of their poor performance over the last 12 months, 17.5% behind their target. At the last meeting she had with the Fund Manager, they remained positive on the outlook for the portfolio and had been advised that the improved performance would come from a few select holdings that were doing very well. Noting, however that there had been no evidence of this over the past year. There was an expectation that Harris needed to improve their  ...  view the full minutes text for item 7.

Report of the Executive Director Corporate Services.

This report brings Members up to date with engagement activity undertaken by the Fund and on its behalf by LAPFF (the Local Authority Pension Fund Forum) since the last Committee meeting.

This work is important to the Fund’s ambition to be a fully engaged investor and demonstrates its commitment to Responsible Investment and engagement in Environmental, Social and Governance (ESG) issues as the Fund works to maximise returns on investment.

Consideration was given to a report of the Executive Director Corporate Services.

The Treasury and Pension Fund Manager informed the Committee that this was a regular report presented to Committee Members updating them with engagement activity undertaken by the Fund and on its behalf by the Local Authority Pension Fund Forum (LAPFF) to promote good governance and behaviour in environmental and social issues.

She highlighted that:

• Table 3 listed the value of the funds equity holdings with the companies that had been engaged with as at 30^th June 2024.
• The key areas of engagement had been around climate change, environmental risk, water stewardship, corporate governance and human rights, the cement industry and the carbon capture.
• Discussions had been had with finance companies like HSBC and other Canadian banks pushing for them to show more improvement on their climate and transition plans and also to reduce their fossil fuel financing.
• LAPFF had made over 13,000 resolutions this quarter across 906 business meetings most of which had taken place in the US and Canada.

The Committee discussed how it could receive feedback on measuring the effectiveness of LAPFF engagement at business meetings and with businesses, noting that it would be useful if LAPFF could provide some quantifiable measures of the effectiveness of engagement, areas that required improved engagement and areas where engagement strategies could be changed or escalated. It was suggested that officers could highlight examples of successful and unsuccessful engagement from the papers circulated by LAPFF.

Action By: Treasury and Pension Fund Manager

In response to further questions officers agreed to check with the LAPFF and provide members further clarification:

·       In relation to paragraph 3.3 page 57 of the agenda in relation to investor risks, what the red flags were and who was being asked to provide this information was it fund managers or investors.

Action By: Treasury and Pension Fund Manager

·       On whether LAPFF had sent the letter to the FTSE 100 index companies asking them to answer certain questions which would provide Local Authority Pension Funds with a better understanding of the basis on which investments were made and maintained in times of conflict.

Action By: Treasury and Pension Fund Manager

·       On how effective and responsive companies were at responding to correspondence sent from the LAPFF in relation to Table 1 page 53 under the activity heading.

Action By: Treasury and Pension Fund Manager

The Chair reminded and encouraged Committee members to attend the business meetings informing them the conference and business meetings were open to all members.

RESOLVED -

THAT the contents of the report be noted.

Report of the Executive Director Corporate Services.

This report provides a quarterly update on developments at the London Collective Investment Vehicle (CIV) in creating sub-funds for the spectrum of asset classes, on-boarding of assets and development of the CIV’s staff resource. Progress with the London CIV contributes to the Government’s pooling agenda and drive to reduce costs in the Local Government Pension Scheme (LGPS).

Consideration was given to a report of the Executive Director Corporate Services.

The Treasury and Pension Fund Manager introduced the report informing the Committee that there had been progress on the LCIV side with a number of fund launches since the last Committee meeting in July such as the Global Equity Value Fund, The All Maturities Buy and Maintain Credit Fund, The Private Debt Fund, The Nature Based Solutions Fund and the Real Estate Pooling Initiation.

There had been positive fund flows with the receipt of £107m across all the ACS Sub Funds with the largest contribution going into the LCIV Mac Fund by a new investor. The LCIV had made its target of £1.6bn assets into private markets and as of 30 June 2024, total assets stood at £32bn with £15.7bn in the public market, £14.5bn in passive equities and £3.1bn in private markets.

As of July, none of the funds Camden Local Government Pension Scheme (LGPS) were invested in were on the LCIV watch list or enhanced monitoring, but 2 of the funds Camden was invested in, the Baillie Gifford Global Alpha Growth Paris Aligned Fund and the Mac Fund were both on normal monitoring.

The LCIV Client Relations Manager, Silvia Knott-Martin updated the Committee on the progress of the fund launches, thanked those members that were able to attend their annual conference on 5^th and 6^th September and participated in the discussion with fund managers and the future direction of LCIV. The LCIV governance team were also in group discussions with Council Pension Officers to provide evidence of the consultative and collaborative work approach of the body to the government. The response was required by 25^th September.

The Chair commented that due to the date of the LCIV Annual Conference clashing with the lead up to 3 by-elections in the borough it had been difficult for some Councillors to attend. However, despite this some Councillors were able to attend, noting that it was a good place to exchange ideas with members across London and was something worthwhile doing particularly when next looking at the Funds asset review highlighting that comments provided from the discussion on the Portable Housing Fund helped shape that for what London required. It was also an opportunity for members to take up training opportunities,

Those members that attended the conference found it to be very enjoyable and informative and expressed a willingness to attend next year.

Responding to Committee members questions, the LCIV Client Relations Manager provided the following information:

In relation to the future direction of LCIV, the organisation aimed to show the government how it could become more effective and deliver on this effectiveness by encouraging the 32 London Boroughs to work collaboratively on joint procurement to facilitate huge savings. It was also about converging and looking at where people could work together to negotiate better fees for the benefit of all.

The Chair also commenting as Chair of the Shareholder Committee on the future direction of the  ...  view the full minutes text for item 9.

Report of the Executive Director Corporate Services.

This report sets out items scheduled for future agendas of this Committee together with a record of training/ meetings attended and a list of future training opportunities.

Consideration was given to a report of the Executive Director Corporate Services.

The Committee noted the items scheduled for future agendas of this Committee together with a record of training sessions and meetings attended and a list of future training opportunities.

The Interim Head of Treasury and Financial Services asked that members inform him of any training or meetings attended and of any training requirements.

Action By: All Members

In discussion members expressed a preference for the Climate Risk Training session be arranged as a stand-alone session rather than included prior to or as part of a Pension Committee meeting.

Action By: Interim Head of Treasury and Financial Services / Treasury and Pension Fund Manager

The Investment Fund Manager meeting currently pencilled in for 20^th November 2024 should now include Harris and Baillie Gifford rather than Aviva.

Action By: Interim Head of Treasury and Financial Services / Treasury and Pension Fund Manager

The Chair informed the meeting that Ros Alexander the Committee’s legal officer for the last 7 years was retiring her last day with the Council being 4^th October after 27 years of service at Camden.

The Chair, on behalf of the Committee, thanked Ros for all her service to the Committee and the borough.

RESOLVED –

THAT the contents of the report be noted.

The next meeting of the Pension Committee will be held on 2^nd December 2024.

The next meeting was scheduled for Monday 2^nd December at 6.30pm.

There was none.

Having adjourned between 7.03pm and 7.08pm due to public disruption, the meeting ended at 8.06pm.