Agenda and minutes

Wales Pension Partnership Joint Governance Committee
Tuesday, 25th September, 2018 10.00 am

Venue: Siambr Dafydd Orwig, - Gwynedd County Council, Council Offices, Caernarfon, Gwynedd, LL55 1SH. View directions

Items
No. Item

1.

APOLOGIES FOR ABSENCE

Minutes:

An Apology for absence was received from the Chair of the Joint Committee,  Councillor Mark Norris, of Rhondda Cynon Taf County Borough Council.

 

Apologies for absence were also received from Nigel Aurelius of Torfaen County Borough Council and of Philip Latham of Flintshire County Council

2.

DECLARATIONS OF INTEREST

Minutes:

Councillor

Nature of Personal Interest

G. Caron

Member of Greater Gwent  Pension Fund

 

Wife is deferred Member of the Greater Gwent Pension Fund

D. Hughes

Member of the Clwyd Pension Fund;

P. Lewis

Member of the Powys Pension Fund;

C. Lloyd

Member of the City and County of Swansea Pension Fund;

R. Smith

Member of the Rhondda Cynon Taf Pension Fund;

J. Pugh Roberts

Member of the Gwynedd Pension Fund;

E. Williams

Member of the Dyfed Pension Fund.

 

(Note: There is an exemption within the Code of Conduct for Members, which allows a member who has been appointed or nominated by their authority to a relevant body to declare that interest but remain and participate in the meeting).

 

 

3.

TO SIGN AS A CORRECT RECORD THE MINUTES OF THE MEETING HELD ON THE 11TH JUNE 2018 pdf icon PDF 167 KB

Minutes:

The Chair advised that there was one correction to the minutes as Cllr C. Weaver was not a member of the local government Pension Fund. Cllr Weaver confirmed this was correct.

 

UNANIMOUSLY RESOLVED that the minutes of the meeting of the Committee held on the 11th June  be signed as a correct record, subject to the above amendment.

 

4.

PRESENTATION BY LINK AND HOST AUTHORITY ON MILESTONES AND PROGRESS UPDATE pdf icon PDF 113 KB

Additional documents:

Minutes:

The Chair welcomed Denise Jones – Head of Change Management of Link Fund Solutions to provide a presentation on Key Milestones and progress in respect of the Wales Pension Partnership.

 

Ms Jones provided the Joint Committee with a list of the provisional dates for the key milestones, progress to-date on Initial Funds (Global Equity) Tranche 2 (UK and European Equities) and the next steps.

 

Ms Jones advised that Link were currently working through the reporting templates with a sample pack having been  considered by the Officers Working Group in July,  it was therefore hoped that agreement on the pack would be received shortly in readiness for the first fund launch.

 

Ms Jones also informed the Joint Committee that Investment Manager Agreements were underway and it was hoped that all agreements would be signed by the end of September 2018.

 

In terms of the Global Equity Sub-fund,  Link were still targeting mid November 2018 for the launch of the first two funds and it was hoped that agreement would be made within Agenda item 6 for the Tranche 2 funds  - UK and European Equities, with approval of the schedule 5 additions to the Fund prospectus by 5th October.

 

In terms of Transition Manager Appointments for the first two funds (Global Equities), all bids had been received and an initial evaluation had been undertaken, reviewed with officers and final approval was expected within the next week.

 

In terms of progress to-date, the Joint Committee was advised that:-

 

·         FCA approval was received for the initial funds on the 24th July;

·         An Initial Manager engagement day was held on the 5th September with the 3 Global Growth and 3 Global Opportunities Manager in attendance,  an additional 4 managers would meet with the Joint Committee later that morning

·         Contract negotiations had commenced with Northern Trust for the depositary agreement, as per the report, with the execution copy due for completion later in the week

·         Link had reviewed the Administration  agreement and fed initial comments back to Northern Trust

·         Letters of engagement were now in place for Audit, Legal and Tax advisors.

 

In terms of Tranche 2 Link had considered UK and European equities, and the fund proposals had been agreed with the investing local authorities of Cardiff and Torfaen, with the schedule 5 additions completed and issued for initial review by the Officers and then approved for submission to the FCA with a view to launch in mid January 2019. It was hoped that Transition Mangers would be appointed by the 11th October 2018. Work had also commenced on fixed income proposals which would hopefully be agreed in November 2018 so that work could commence on the third FCA submission.

 

Reference was made to the key milestones and dates detailed within the report, and clarification was sought regarding the appointment process for the Transition Manager. The Joint Committee S151 Officer advised that the Transitional Manager would require appointment by each individual authority, and each Authority’s appointments process would apply.

 

In response  ...  view the full minutes text for item 4.

5.

EXCLUSION OF THE PUBLIC

THE REPORT RELATING TO THE FOLLOWING ITEM IS NOT FOR PUBLICATION AS IT CONTAINS EXEMPT INFORMATION AS DEFINED IN PARAGRAPH 14 OF PART 4 OF SCHEDULE 12A TO THE LOCAL GOVERNMENT ACT 1972 AS AMENDED BY THE LOCAL GOVERNMENT (ACCESS TO INFORMATION) (VARIATION) (WALES) ORDER 2007. IF, FOLLOWING THE APPLICATION OF THE PUBLIC INTEREST TEST, THE COMMITTEE RESOLVES PURSUANT TO THE ACT TO CONSIDER THIS ITEM IN PRIVATE, THE PUBLIC WILL BE EXCLUDED FROM THE MEETING DURING SUCH CONSIDERATION.

Minutes:

UNANIMOUSLY RESOLVED, pursuant to the Local Government Act 1972, as amended by the Local Government (Access to Information)(Variation) (Wales) Order 2007, that the public be excluded from the meeting during consideration of the following item as the report contained exempt information as defined in paragraph 14 of Part 4 of Schedule 12A to the Act.

 

6.

PRESENTATION BY LINK / RUSSELL ON UK AND EUROPEAN EQUITY SUB-FUNDS

Minutes:

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in minute number 5 above, to consider this matter in private, with the public excluded from the meeting on the basis disclosure of the information detailed in the report would include details of the finer detail of  investment opportunities which had yet to be negotiated fully or renegotiated and disclosing the presentation would prejudice those negotiations and impact upon the Funds’ costs and returns.

 

The Committee welcomed Peter Hugh Smith - Managing Director -  Link Asset Services and Sasha Mandich - Director, Russell Investments to the meeting.

 

The Committee proceeded to receive a presentation on the structure of the two regional equity funds namely UK and Europe ex-UK, and considered recommendations in respect of those funds.

 

Members of the Committee were afforded the opportunity of asking questions on the funds, including fund performance, diversification of investment styles, how funding was split between the two sub-funds, fund manager changes/staffing turnover, and the process for investment./withdrawal.

 

 

UNANIMOUSLY RESOLVED:-

 

1.    That the presentation be noted.

 

2.    to invest in two separate sub funds in order to achieve effective diversification, and to  employ five specialist managers per fund, namely:-

 

·         UK Equities – Majedie, Lazard Omega,  Baillie Gifford, Investec and Liontrust.

 

·         Europe ex-UK equities – Blackrock, Pzena, Invesco, SW Mitchell and Liontrust.

 

3.    to reduce trading costs through an  ‘enhanced implementation’ approach,   which would involve offsetting overlapping manager trades rather than directing every manager to trade separately with their own brokers.