Issue - meetings

This report is a summary of all manager issues that need to be brought to the attention of the Pension Fund Committee, as well as manager investment performance.

Declarations of interest:

None.

Key points raised during the discussion:

1.    The Strategic Finance Manager (Pension Fund & Treasury) introduced the report, highlighting key issues.

2.    The Independent Advisor introduced the Financial and Performance Report and suggested that the success rate of the committee in choosing investment managers had been good.  He then went on to introduce the notes from meeting with Fund Managers.

3.    Members discussed the flexibility of mandates agreed for Fund Managers.  It was felt that active managers should be requesting changes to mandates if they feel they have become restrictive.

4.    The Surrey Pension Fund Advisor explained that Franklin Templeton was expected to depart from their benchmark with the expectation of a positive absolute return.

5.    Information provided by CBRE on cash flow would be circulated to the committee (Recommendations Tracker ref: A14/15).

6.    With regard to the Self-Assessment Results, it was suggested that some Members had requested more meetings because agendas were long and issues complex.  This would hopefully be addressed by holding training on separate days.  It was also suggested that members of the committee should meet informally without officers or advisors. 

Actions/Further information to be provided:

Information provided by CBRE on cash flow to be circulated to the committee.

Resolved:

That the Surrey Pension Fund Committee:

1.    Notes the report.

2.    Delays consideration of infrastructure as a future strategy for the Fund until the Government provides clarity over proposed pooling of assets.

Next steps:
None.

This report is a summary of all manager issues that need to be brought to the attention of the Surrey Pension Fund Board, as well as manager investment performance.

Declarations of interest:

None.

Key points raised during the discussion:

1.    The Strategic Finance Manager (Pension Fund and Treasury) introduced the item and highlighted the advice that the Board delay a decision to invest via the Marathon Emerging Markets Fund.  The Board supported this delay.

2.    It was suggested that, in relation to the Marathon Emerging Markets Fund, the Board should have a discussion on whether to increase exposure to emerging markets.  The Mercer representative explained that the Board had not been looking to increase its exposure with emerging markets but that Marathon had asked its clients to move from segregated investments into a pooled fund. 

3.    A Member queried the adoption of stock lending, suggesting that it adds volatility to the market.  The Chairman pointed out that stock lending was adopted two years ago by the Board.  It was also suggested on the plus side that stock lending creates liquidity.

4.    The Surrey Pension Fund Advisor introduced the notes of meetings with Fund Managers, attached as Annex 2 to the report.  There was some concern about Franklin Templeton’s exposure to the Ukraine.  The Surrey Pension Fund Advisor assured the Board that, while Franklin Templeton was a large investor in the Ukraine on behalf of its clients, this exposure was not considered a risk to the company’s viability.  The pooled fund owned by the Surrey Pension Fund does have a holding in Ukraine bonds, but these represent a small allocation of the overall fund.

5.    It was confirmed that, while the Surrey Pension Fund Advisor and Strategic Finance Manager (Pension Fund and Treasury) hold the meetings with Fund Managers, Board members were always invited to attend.

6.    It was requested that figures in the report be provided net of fees.  The Strategic Finance Manager (Pension Fund and Treasury) confirmed that the custodian could provide this, although the Mercer representative explained that where performance-related fees were concerned there would be some manual work and therefore some additional cost.  The Chairman suggested that this be considered as part of the deep dive into all costings and fees (Action Review ref A6/15).

7.    The Board noted that asset allocations were all comfortably within variances.

Actions/Further information to be provided:

The deep dive review of the Pension Fund to include a review of the information provided to the Board, eg the potential for receiving figures net of fees.

Resolved:

      i.        That the report be NOTED.

     ii.        That the allocation of the £34.5m cash position would be deferred to the end of the meeting.

    iii.        That multi asset credit would be considered under item 17.

   iv.        That the Surrey Pension Fund Board training policy be APPROVED.

Next steps:

None.