Agenda and draft minutes

Pension Policy & Investment Committee
Monday, 29th October, 2018 10.45 am

Venue: The Aon Centre, 122 Leadenhall Street, London, EC3V 4AN

Contact: Paul Reddaway - 020-8379-4730 Email:  paul.reddaway@enfield.gov.uk 

Items
No. Item

81.

Welcome & Introduction

Minutes:

The Chair welcomed all attendees to the meeting.

82.

Apologies

Minutes:

 

Apologies for absence were received from Councillor Claire Stewart and Carolan Dobson (Independent Advisor).

 

Apologies for lateness received from Councillor Derek Levy.

83.

Declaration of interests

Minutes:

There were no declarations of interest in respect of any item listed on the agenda.

84.

Standing Items pdf icon PDF 208 KB

a)    Business Plan  2018/19 update

b)    Enfield Pension Fund Risk Management Policy

c)     Risk Register – Risk Policy

 

Additional documents:

Minutes:

Paul Reddaway (Head of Finance Pension Investments) updated the board on the standing items.

 

A.       Business Plan 2018/19 - No changes

B.       Enfield Pension Fund Risk Management Policy – Following a governance review a Pension Fund Risk Policy has now been prepared to accompany the Fund’s Risk register.

 

Councillor Doug Taylor (Chair) advised that he would like the Local Pension Board Committee papers added to future agendas as a standing item.

85.

Minutes of previous meetings: 1st August 2018 pdf icon PDF 96 KB

Minutes:

Noted:

 

Councillor Terry Neville advised that the minutes should reflect that Members were not convinced at the last meeting due to the absence of a potfolio manager.

 

Agreed:

 

The minutes of the meeting held on 01 August 2018 were agreed as a correct record.

86.

CQS presentation - Multi Asset Credit

Please see Part 2 Report

Minutes:

Councillor Doug Taylor (Chair) and Paul Reddaway (Head of Finance Pensions Investments) introduced the report following the points of clarification requested by Members from the previous meeting.

 

Noted:

 

         CQS had superior   long- term performance figures than JP Morgan

         Members wanted to identify how both managers could navigate the market in these uncertain times.

 

Received a report pack tabled by LCIV & CQS

 

Craig Scordellis (Head of Long-Only Multi-Asset Credit CQS) presented the item on their investment philosophy.

 

Noted

 

         Company launched on the 31st May 2018 with £343m

         Current AUM £488m (Figure 700m at the end of this quarter)

         Worst October month returns since 2008, return rate since inception is 1.43%

         Annualised Return 5.07%, Annualised Volatility LTD 2.06% and Sharpe Ration LTD 2.19%.

         No underlying markets are bought to ensure there is minimal volatility (avoiding defaults)

         There are no material drawdowns to investors when there are defaults

         US loans are currently safer than Europe (Strong US housing data and low loan default rates).

         CQS will preserve/outperform when there is a crisis

         Allocation will be to loans rather than HYC

         After December, numbers will be 5 ½ % (3.35% Cash Interest)

         Next year with Brexit and other issues, volatility will increase but this does create good investment opportunities.

 

The Committee thanked CQS for their presentation

 

AGREED

 

         £50m to be invested into the Multi Asset Credit (MAC) via the LCIV.

         Formal review to take place in 6 months’ time

         Paul Reddaway advised he can invest money by the end of November.

87.

Aon presentation on Responsible Investments

Please see Part 2

Minutes:

Lara Kennard (Aon Representative) made a presentation on the area of Responsible investments.

 

Noted:

What is responsible investment (RI)

The importance of them in an investment strategy

Potential actions in constructing a RI

 

The Committee thanked Lara for her presentation.

88.

LCIV - presentation on ESG policy

12:20pm – 12:30pm

Minutes:

London CIV representatives presented their ESG Policy.

 

Noted:

 

         Responsible Investment Policy established (to be ratified at Shareholder meeting)

         LCIV has become a UN PRI signatory and member of LAPFF

         LCIV is a signatory of the UK Stewardship Code

         All LCIV Managers are required to have RI Policies (Published on LCIV client portal)

 

The Committee thanked LCIV for the presentation and advised that they would like an update on the proposals from the Shareholder meeting.

89.

Presentation RBC - sustainable equity product/ LCIV

12:30 pm – 1:00pm

Minutes:

Received a Global Asset Management report pack from Simon Gregory (Global Equity Team product specialist) and Greta Favetta (Investment analyst).

 

The Committee thanked Global Asset Management for their presentation.

 

90.

Break

91.

Responsible Investment Framework - Report pdf icon PDF 303 KB

1:20pm – 1:40pm

Minutes:

gPaul Reddaway (Head of Finance Pensions Investments) asked the members to note the contents of this report and to consult with the wider membership of

the Fund.

 

The Committee noted the contents of the report.

 

92.

Antin proposal for a new infrastructure Fund pdf icon PDF 159 KB

Minutes:

Received a report from Paul Reddaway (Head of Finance Pensions Investments) on Antin proposal for a new Infrastructure Fund.

 

Noted

 

         Enfield have successfully committed capital towards Antin in line with the original commitment timetable (January 2017)

         Funds would be commit funds towards Antin over time to increase Fund’s allocation to infrastructure.

         New fund likely to oversubscribe and a delayed decision may lead to Enfield’s commitment being scaled down

         LCIV are unveiling their proposals next week.

 

Agreed

 

         The Committee will compare the relative merits of both options at the next meeting.

93.

Quarterly Performance report - 30th June 2018

Please see Part 2 Report

Additional documents:

Minutes:

Received a report from Paul Reddaway (Head of Finance Pensions Investments) on the Aon quarterly Investment report ended 30th June 2018.

 

The Committee noted the individual manager performances and acknowledged the funding level assessed.

 

94.

Absolute Return Bond Mandate pdf icon PDF 68 KB

Please see Part 2 Report

Additional documents:

Minutes:

Received a report from Paul Reddaway (Head of Finance Pensions Investments) regarding Options for Absolute Return Bonds (ARB) mandate.

 

Noted:

 

         To agree in principle to dis-invest from Insight ARB 400+ product and to consider an alternative ARB manager with a less aggressive approach and lower volatility or to examine the LCIV Global Bonds Fund that targets an absolute return with high quality bonds.

 

Agreed:

 

         To consider options set out in the report at the next Pension, Policy and Investment Committee in December.

 

95.

EXCLUSION OF THE PRESS AND PUBLIC

Minutes:

RESOLVED, in accordance with Section 100(A) of the Local Government Act 1972 to exclude the press and the public from the meeting for the items listed on part two of the agenda on the grounds that they involve the likely disclosure of exempt information as defined in Paragraph 3 (information relating to the financial or business affairs of any particular person (including the authority holding that information) of Part 1 of Schedule 12A to the Act (as amended by the Local Government (Access to Information) (Variation) (Order 2006).