Agenda and draft minutes

Ni chafwyd ymddiheuriadau am absenoldeb.

[Noder: Ceir eithriad yn y Côd Ymddygiad ar gyfer Aelodau, sy'n caniatáu i aelod a benodwyd neu a enwebwyd gan ei Awdurdod i gorff perthnasol ddatgan y buddiant hwnnw ond aros a chymryd rhan yn y cyfarfod.]

RESOLVED that the minutes of the Joint Governance Committee meeting held on 17^th July 2024 be signed as a correct record.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris,
D. Rose, E Williams and M. Hughes had earlier declared an interest in this item.]

The Joint Committee received a progress update in relation to the following key areas:

-         Governance;

-         Ongoing establishment;

-         Operator services;

-         Communications and reporting;

-         Training and meetings;

-         Resources, budget and fees.

UNANIMOUSLY RESOLVED that the Host Authority update be received.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris,
D. Rose, E Williams and M. Hughes had earlier declared an interest in this item.]

The Joint Committee considered the Risk Register Q3 2024 review.  Members were reminded that the purpose of the WPP Risk Register was to:

·       Outline the WPP's key risks and factors that may limit its ability to meet its objectives.

·       Quantify the severity and probability of the risk facing the WPP

·       Summarise the WPP's risk management strategies.

·       Monitor the ongoing significance of these risks and the requirement for further risk mitigation strategies.

A quarterly review of the register had been undertaken by the Officers Working Group (OWG).  Joint Committee Members were informed that during the last quarter, a review had taken place on the Training & Resources and Communication Risks. The Joint Committee was appraised of the review outcomes of each of those risks as summarised within the report.

The next review would take place in Q4 2024 and would focus on Investment Section Risks.

In response to a query regarding the inclusion of a risk relating to a change in Government administration, it was reported that such matters were included in the wider Risk Register.

UNANIMOUSLY RESOLVED that the amendments to the WPP Risk Register, as detailed in the report, be approved.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris,
D. Rose, E Williams and M. Hughes had earlier declared an interest in this item.]

The Joint Committee received a presentation provided by Waystone Management (UK) Limited, on the progress of the Wales Pension Partnership for Quarter 2, 2024, in relation to the following key areas:

·       Market updates;

·       Business updates.

·       Current fund holdings;

·       Sub-funds update;

·       Corporate update and engagement

The Joint Committee received updates on the following :-

·       Market Update

·       Business Update

·       AUM summary as at 30 June 2024

·       Fund changes in relation to the Global Growth Fund and Sustainable
Active Equity Funds

·       Market Updates in relation to Russia / Ukraine and the Middle East

·       Corporate Update and engagement.

UNANIMOUSLY RESOLVED that the Operator Update be received.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris,
D. Rose, E Williams and M. Hughes had earlier declared an interest in this item.]

The Joint Committee received a presentation on the Performance Reports as at 30^th June, 2024. Members were advised that the sub funds that had outperformed/underperformed their respective benchmarks, were as follows:

•       Global Growth – underperformed by 1.8% gross / 2.2% net

•       Global Opportunities – outperformed by 0.7% gross / 0.4% net

•       Sustainable Active Equity – underperformed by 6% gross / 6.4% net

•       UK Opportunities – underperformed by 0.3% gross / 0.7% net

•       Global Government Bond – outperformed by 0.8% gross / 0.6% net

•       Global Credit – benchmark met gross / underperformed by 0.2% net

The Committee noted that the MAC and ARB funds, did not meet their targets whilst the Emerging Markets and Sterling Credit Funds exceeded its target.

RESOLVED that the Performance Reports of the following sub-funds as at 30^th June 2024 be noted:

7.1        Global Opportunities Equity Fund

7.2     Global Growth Equity Fund

7.3     Sustainable Active Equity Fund

7.4     Emerging Markets Equity Fund

7.5     UK Opportunities Equity Fund

7.6     Global Government Bond Fund

7.7     Global Credit Fund

7.8     Multi Asset Credit Fund

7.9     Absolute Return Bond Fund

7.10   Sterling Credit Fund

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris,
D. Rose, E Williams and M. Hughes had earlier declared an interest in this item.]

The Joint Committee received a report, supported by a presentation given by Russell Investments.  In 2023, the Wales Pension Partnership (WPP) launched its initial Private Market Investment programmes.  Russell Investments were appointed WPP’s Private Credit Allocator, with the Private Credit Investment programme being launched in April 2023.  The report provided detailed information the progress to date.

UNANIMOUSLY RESOLVED that the Private Markets Update – Private Credit Update report be received.

THE REPORTS RELATING TO THE FOLLOWING ITEMS ARE NOT FOR PUBLICATION AS THEY CONTAIN 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 JOINT COMMITTEE RESOLVES PURSUANT TO THE ACT TO CONSIDER THESE ITEMS IN PRIVATE, THE PUBLIC WILL BE EXCLUDED FROM THE MEETING DURING SUCH CONSIDERATION

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 reports contained exempt information as defined in paragraph 14 of Part 4 of Schedule 12A to the Act.

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in Minute 9 above, to consider this matter in private, with the public excluded from the meeting, as disclosure would be likely to cause financial harm to the Pension Fund by prejudicing ongoing and future negotiations.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris,
D. Rose, E Williams and M. Hughes had earlier declared an interest in this item.]

The Joint Governance Committee received the report on the Securities Lending Performance Review as at 30^th June 2024 for consideration.  The report was presented by Northern Trust.

UNANIMOUSLY RESOLVED that the Securities Lending Performance Review as at 30th June 2024, as detailed in the report be noted.

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in Minute 9 above, to consider this matter in private, with the public excluded from the meeting, as disclosure would be likely to cause financial harm to the Pension Fund by prejudicing ongoing and future negotiations.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris,
D. Rose, E Williams and M. Hughes had earlier declared an interest in this item.]

The Joint Committee received the Engagement Report for Q2 of 2024 (quarter ending 30 June, 2024).

UNANIMOUSLY RESOLVED that the Engagement Report for Q2 of 2024 be noted.

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in Minute 9 above, to consider this matter in private, with the public excluded from the meeting, as disclosure would be likely to cause financial harm to the Pension Fund by prejudicing ongoing and future negotiations.

[NOTE: Councillors C. Weaver, M. Lewis, P. Lewis, N. Yeowell, M. Norris,
D. Rose, E Williams and M. Hughes had earlier declared an interest in this item.]

The Joint Committee received the Responsible Investment and Climate Risk reports, for Quarter 2, 2024 (quarter ending 30 June, 2024), in respect of the following funds:-

•       Absolute Return Bond (ARB)

•       Multi-Asset Credit (MAC)

The report looked at ESG and climate risk metrics and highlighted any material ESG-related risks and issues, and identified key actions for the WPP to address.

UNANIMOUSLY RESOLVED that the Responsible Investment & Climate Risk Reports for the following sub funds be noted:

•       Absolute Return Bond (ARB)

•       Multi-Asset Credit (MAC)

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