Agenda and minutes

Apologies for absence were received from Councillor Russell and apologies for lateness were received from Councillor Johnson.

There were no declarations.

There were no deputations.

Councillor Madlani informed the Committee that James Graham, Treasury and Pension Fund Manager, would be leaving the Council at the end of September to start a new position at the City of London Corporation.  The Committee thanked him for his excellent service to Camden and wished him well in his new job.

There were no urgent items.

To approve and sign as a correct record the minutes of the meeting of the Pension Committee held on 30^th July 2018.

RESOLVED –

THAT the Part I minutes of the meeting held on 30^th July 2018 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 2018.

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

The Committee noted the performance of the Camden Pension Fund investment portfolio and the individual investment managers for the quarter ended 30^th June 2018.

The Committee noted in particular that the Fund delivered a return of 4.6% in Quarter 2 versus a target of 5.3%. The Fund was 1.8% behind target over twelve months but still ahead in two years by 0.2%.

Committee Members noted Appendix A “Camden Client Ranking by Manager” which detailed Camden’s exposure as clients to the overall fund or strategy managed by each Investment Manager. In future, where Camden represented greater than 5% of the Investment manager’s fund and there was a material increase due to client outflows, this would be reported to Committee on an exceptions basis.

The Committee also noted Appendix B, which presented a more comprehensive overview of the financial markets by the Independent Investment Advisor and reported the performance of the individual Investment Managers in more detail. Karen Shackleton, Independent Investment Advisor highlighted the salient points as follows:

a)        London CIV - Baillie Gifford – delivered a return of +7.3% in Q2 outperforming Harris by +2.4 and by +12.7% for the 12 months to Q2 2018. Although slightly behind their target for the quarter, they outperformed the Index by +0.13% for the quarter and by +6.2% for the 12 months.This had been a particularly strong 12 months for the manager. The LCIV did undertake due diligence on this manager and reported that there were no changes to the team or the strategy during the quarter. The fund held 105 companies as at quarter end, across 25 different countries, had an active risk of 2.97 and remained overweight in Financials, Information Technology, Consumer Discretionary and Industrials, with no change on last quarter. In terms of assets under management, it was noted that the LCIV sub-fund stood at £2,183.1 million as at end June, an increase of £357 million since the previous quarter end. Camden’s investment represented 12.64% of the Fund.

b)        Harris – both Harris’ sector allocations and stock selection had a negative impact, detracting -1.16% and -0.92% respectively, in Q2 2018. Daimler was the worst performing stock in Q2, delivering a total return of -16.01% and detracting -0.86% from the portfolio return. This followed a profit warning and headwinds from higher raw material costs, currency movements, and issues with US suppliers. As at quarter end, the fund had a 35.7% allocation to Europe, and a 38.2% to the US, with the balance in Asia/emerging markets.

In response to questions from Committee Members, Karen Shackleton said that at this point in time she was not concerned about their performance as they had indicated from the start that there would be periods where they might not perform well and they were being consistent with what they had said and their style. She drew the Committee’s attention to table 12 on page 34 of the agenda, which showed Harris’ cumulative return against  ...  view the full minutes text for item 7.

Report of the Executive Director Corporate Services

The Pension Fund is required to produce an Annual Report under the Local Government Pension Scheme Regulations 2013/2356. This report presents the 2017/18 Annual Report to the Pension Committee.

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

It was noted that the Pension Fund was required to produce an Annual Report under the Local Government Pension Scheme Regulations 2013/2356 and this report presented the 2017/18 Annual Report. It brought together the Fund's key documents and statements into a single repository including the Governance Compliance Statement, Funding Strategy Statement, Investment Strategy Statement, Communications Policy Statement and the Pension Fund accounts which had been audited by KPMG who had not highlighted any exceptions.

The report provided an outline of Camden’s governance and management of the Local Government Pension Scheme and an update of the cost of administering the scheme. The Committee noted that for 2017/18, scheme administration was £23.45 per member of the Fund compared to £27.44 the year before. It also provided an update on investment policy and performance for the past year, including a review of investment markets, individual managers’ performance and details of the Fund’s investments and asset allocation.

It was noted that KPMG were currently auditing the annual report as a whole, although no issues were anticipated and their opinion would be included in the final report published on the Council's website. If any issues were to arise they would be reported to the Committee as necessary.

RESOLVED –

THAT the 2017/18 Pension Fund Annual Report be approved as attached at Appendix A.

ACTION BY:             Executive Director Corporate Services

Report of the Executive Director Corporate Services

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

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

The Committee noted the engagement activity undertaken by the Fund and LAPFF (Local Authority Pension Fund Forum) since its last meeting.

The most recent LAPFF business meeting took place on 19 July 2018 which was attended by the Chair of the Pension Committee and the Head of Treasury and Financial Services. 

The Forum meeting received a report on the impact of plastics on the environment outlining the main concerns around their use (mainly single-use plastics) and the associated costs of production, consumption and waste management. It recommended that it would be useful for companies and stakeholders (especially oil and gas, consumer and packaging companies) to establish a more sustainable process for plastic production and usage. It was also agreed that two days LAPFF time would be set aside to produce a paper for members in six months which would consider the option of using market surveys (for example on supermarket practices) to propose more targeted sector-specific engagement.

The Forum also received a paper on Sustainable Development Goals (for clean water and sustainable communities) which proposed that the Forum engages the food and beverage (especially Pepsico, Nestle and Coca-Cola) industry to assess water stewardship and access. The paper also considered the need to establish sustainable cities and communities and proposed that the Forum considers engagement with transport, property and waste management companies to ensure that cities and communities are inclusive and sustainable.

The Head of Treasury and Financial Services agreed to circulate both of the aforementioned reports to Committee Members.

            ACTION BY:  Executive Director Corporate Services

It was noted that the LAPFF had supported all climate change resilience motions which had been proposed.

The next Business Meeting would be taking place on 10th October 2018 and Committee Members were asked to inform the Head of Treasury and Financial Services if they wished to attend.

ACTION BY:  Executive Director Corporate Services

                         Committee 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 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 LGPS.

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

The Committee noted the quarterly update on developments at the London CIV in creating sub-funds for the spectrum of asset classes, on-boarding of assets and development of the CIV’s staff resource. The progress with the London CIV contribution to the Government’s pooling agenda and drive to reduce costs in the LGPS.

The Committee also noted that it would receive quarterly reports on the establishment and progress of the London CIV and transfer of assets into it. This would assist the Committee in its responsibility of asset allocation whilst future procurement of funds and day to day management was now the responsibility of the London CIV.

Councillor Madlani reminded Committee Members that there were two meetings a year which he encouraged them to attend. He also stressed the importance of Committee Members attending training sessions.

            TO NOTE: Committee Members

RESOLVED –

THAT the contents of the report be noted and Committee Members be asked to feedback any comments on progress to the Chair and officers.

ACTION BY: Committee Members

                                    Executive Director Corporate Services

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 that were proposed to be included on the agendas for future meetings of the Committee, and details of training opportunities for Members and officers to plan to stay informed on upcoming topics.

The Head of Treasury and Financial Services informed the Committee that the next Manager’s meeting would be held with Bailie Gifford and Ruffer on either 20^th or 21^st October 2018. He would confirm details as soon as possible.

            ACTION BY: Executive Director Corporate Services

The Chair advised the Committee that, due to other engagements, he had agreed that the next Pension Committee meeting should be rearranged and would now be held on Thursday, 29^th November 2018. The Committee Officer would write to Committee Members to formerly confirm the date, time and location.

ACTION BY: Executive Director Corporate Services

            TO NOTE: ALL

RESOLVED –

THAT the contents of the report be noted.

There was no urgent business