Agenda and draft minutes

There were no apologies for absence.

[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.]

RESOLVED that the minutes of the Joint Governance Committee meeting held on 13^th December, 2023, be signed as a correct record.

[NOTE: Councillors M. Norris, C. Weaver, N. Yeowell, M. Lewis, S. Churchman, P. Lewis, T. Palmer and E. Williams 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.

In response to a query, the Committee noted that there was an attendance record for JGC members for each training session provided.

UNANIMOUSLY RESOLVED that the Host Authority update be received.

[NOTE: Councillors M. Norris, C. Weaver, N. Yeowell, M. Lewis, S. Churchman, P. Lewis, T. Palmer and E. Williams had earlier declared an interest in this item.]

The Joint Committee received the Training Plan for 2024/25. The meeting was advised that the WPP’s training plan is devised to supplement existing Constituent Authority training and will be relevant to the WPP’s pooling activities.  The training is primarily focussed on meeting the training needs of members of the OWG and JGC, however it may be extended to Pension Committee members, as well as Pension Board representatives, if relevant.

The 2024/2025 training sessions will be held quarterly and will cover the following topics:

·       Product knowledge and Cyber Security

·       Policies

·       Responsible Investment

·       Market Understanding & Regulatory Requirements

UNANIMOUSLY RESOLVED that the WPP training plan 2024/25 report be approved.

[NOTE: Councillors M. Norris, C. Weaver, N. Yeowell, M. Lewis, S. Churchman, P. Lewis, T. Palmer and E. Williams had earlier declared an interest in this item.]

The Joint Committee considered the Business Plan 2024-2027. The meeting was advised that the Business Plan has been drafted in accordance with Section 6 of the Inter Authority Agreement. Following approval by the Joint Committee, the Business Plan would be sent to all Constituent Authorities for their written approval.

The JGC was advised that the purpose of the business plan was to:

•       Explain the background and governance structure of the WPP

•       Outline the priorities and objectives of the WPP over the next three years

•       Introduce the WPP’s policies and plans

•       Outline the financial budget for the relevant Business Plan period

•       Summarise the WPP’s Investments & Performance Objectives

The plan will be constantly monitored and will be formally reviewed and agreed annually.

UNANIMOUSLY RESOLVED that the Business Plan be agreed and sent to all eight Constituent Authorities for written approval.

[NOTE: Councillors M. Norris, C. Weaver, N. Yeowell, M. Lewis, S. Churchman, P. Lewis, T. Palmer and E. Williams had earlier declared an interest in this item.]

The Joint Committee considered the Risk Register Q1 2024 review.  Members were advised that the purpose of the WPP Risk Register is 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.

The Officers Working Group (OWG) has carried out a quarterly review of the register, looking at the first half of the Governance and Regulation section, risks G.1 to G.7.  The Sub-Group also reviewed Risk G.12 and G.15.

Members were informed that the next review will take place in Q2 2024 and will focus on the remaining risks within the Governance & Regulation Risks section.

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

[NOTE: Councillors M. Norris, C. Weaver, N. Yeowell, M. Lewis, S. Churchman, P. Lewis, T. Palmer and E. Williams had earlier declared an interest in this item.]

The Joint Committee received for consideration the updated Communication policy.

It was noted that the Communication Policy was formally approved by the JGC in December 2019 and was reviewed and updated in March 2021 and March 2022. 

The Governance Matrix was also reviewed during this quarter.  The matrix was originally approved by the JGC in December 2019 and is reviewed annually.  It was noted that during this year’s review, no changes had been made to the Governance Matrix.

It was noted that the Communication Policy would be updated on the WPP website.

UNANIMOUSLY RESOLVED that the Communication Policy, as detailed in the report, be approved.

[NOTE: Councillors M. Norris, C. Weaver, N. Yeowell, M. Lewis, S. Churchman, P. Lewis, T. Palmer and E. Williams 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 4, 2023, in relation to the following key areas:

·       Market updates;

·       Current fund holdings;

·       Sub-funds update;

·       Corporate update and engagement

The Joint Committee received updates on the following :-

·       Market Update regarding the completed acquisition of Link Fund Solutions

·       AUM summary as at 31 December 2023

·       Fund changes in relation to the Global Credit fund, Global Growth Fund, UK Opportunities fund, Absolute Return Bond fund and Cash Yield Options.

·       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 M. Norris, C. Weaver, N. Yeowell, M. Lewis, S. Churchman, P. Lewis, T. Palmer and E. Williams had earlier declared an interest in this item.]

The Joint Committee received a presentation on the Performance Reports as at 31^st December, 2023. Members were advised that the sub funds that had outperformed/underperformed their respective benchmarks, were as follows:

·       Global Opportunities – outperformed by 1.1% gross / 0.8% net

·       Global Growth – underperformed by 0.9% gross / 1.3% net

·       Sustainable Active Equity – underperformed by 2.6% gross / 2.8% net

·       Emerging Markets – underperformed by 0.3% gross / 0.8% net

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

·       Global Government Bond – outperformed by 1.3% gross / 1.0% net

·       Global Credit – underperformed by 0.1% gross / 0.3% net

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

RESOLVED that the Performance Reports of the following sub-funds as at 31^st December 2023 be noted:

10.1        Global Opportunities Equity Fund

10.2     Global Growth Equity Fund

10.3     Sustainable Active Equity Fund

10.4     Emerging Markets Equity Fund

10.5     UK Opportunities Equity Fund

10.6     Global Government Bond Fund

10.7     Global Credit Fund

10.8     Multi Asset Credit Fund

10.9     Absolute Return Bond Fund

[NOTE: Councillors M. Norris, C. Weaver, N. Yeowell, M. Lewis, S. Churchman, P. Lewis, T. Palmer and E. Williams had earlier declared an interest in this item.]

The Joint Committee received an update by GCM Grosvenor on the Private Market investment Closed-ended and Open-ended programmes.

It was noted that the Closed-ended program focused on diversified infrastructure investments across primaries, secondaries, and co-investments in the UK, Europe, and North America.  A total of £166m had been committed with £77m invested to date. The funds investing in this program are Clwyd, Dyfed, Gwynedd, Powys, RCT, Swansea and Greater Gwent (Torfaen).

The Committee were informed of three Open-ended managers:

·       IFM – The IFM Global Infrastructure Fund invests in a diversified portfolio of infrastructure assets across the transportation, energy, utilities and digital sectors which seek to deliver stable revenues over the long term. £221m had been committed with no investments made to date.

·       CBRE – The CBRE Global Infrastructure Fund invests in assets across digital, transportation, energy transition, and utility infrastructure sectors with highly contracted, cash yielding characteristics. £88m had been committed with no investments made to date. 

·       Octopus - The Octopus Renewable Sky Fund makes investments in predominantly core, contracted, and cash-yielding renewable and energy transition assets across the UK, Europe, North America, and APAC. £133m had been committed with £67m invested to date.

UNANIMOUSLY RESOLVED that the Private Markets Update – Infrastructure, 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 12 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 M. Lewis, C. Weaver, P. Lewis, N. Yeowell, M. Norris, T. Palmer and E. Williams had earlier declared an interest in this item.]

The Joint Committee received the Engagement Report for Q4 of 2023 (quarter ending 31 December, 2023).

UNANIMOUSLY RESOLVED that the Engagement Report for Q4 of 2023 be noted.

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in Minute 12 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 M. Norris, C. Weaver, N. Yeowell, M. Lewis, S. Churchman, P. Lewis, T. Palmer and E. Williams had earlier declared an interest in this item.]

The Joint Committee received the Responsible Investment and Climate Risk reports, for Quarter 4, 2023 (quarter ending 31 December 2023), in respect of the following funds:-

·       UK Credit

·       Global Credit

·       Global Government Bond

The report looked at ESG and climate risk metrics and identified key actions for the WPP to discuss.

UNANIMOUSLY RESOLVED that the Responsible Investment and Climate Risk Reports be noted.

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in Minute 12 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 M. Norris, C. Weaver, N. Yeowell, M. Lewis, S. Churchman, P. Lewis, T. Palmer and E. Williams had earlier declared an interest in this item.]

The Joint Committee considered a report regarding the Operator contract procurement recommendation, which would be sent to all eight constituent authorities for written approval, in accordance with Schedule 2 of the Inter Authority Agreement.

RESOLVED that the Operator Procurement Recommendation be agreed and sent to all eight constituent authorities for written approval.

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in Minute 12 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 M. Norris, C. Weaver, N. Yeowell, M. Lewis, S. Churchman, P. Lewis, T. Palmer and E. Williams had earlier declared an interest in this item.]

The Joint Committee received a report on the Securities Lending Review as at 31 December, 2023.

UNANIMOUSLY RESOLVED that the Securities Lending Review as at 31 December, as detailed in the report, 2023 be noted.