Issue - meetings

Purpose of the report: At its meeting of 14 September 2018, the Pension Fund Committee approved the recommendation of the Fund’s investment consultant, Mercer, to invest a further £30-40m in new private equity fund with its defined characteristics.

The Committee further authorised officers to work with Mercer and the independent advisor to research the market for appropriate private equity providers with these defined characteristics and bring a further recommendation to the pension fund committee.

This paper provides a recommendation for the selection of an Infrastructure manager which most closely meets the defined characteristics.

Declarations of interest:

None

Witnesses:

Neil Mason, Head of Pensions

Steve Turner, Partner, Mercer

Sam Wreyford, Mercer

Key points raised during the discussion:

1. It was noted that although the Surrey Pension Fund had fully committed to the Border to Coast Pension Partnership, the Fund had to ensure it remained consistent to its target allocation of 5% to private equity and provide further portfolio diversification into infrastructure.

2. The Fund’s investment consultant, Mercer, considered a number of managers and short-listed two funds; Blackrock and Glenmont against the desirable characteristics the Fund approved at its meeting on 14 September 2018.

3. It was noted that the manager recommended by Mercer was Glenmont due to its high rating, that it invests exclusively in clean energy, its LGPS familiarity and that its strategy was currently raising capital and has begun drawing money down.

4. The Head of Pensions assured the Committee going forward the process for informing the public that the Surrey Pension Fund were investing in fossil fuel free companies would be improved i.e. releasing press statements and making sure responses were clear.

Actions/ further information to be provided:

None

Resolved:

The Committee agreed to commit £40m to the Glenmont – Clean Energy Fund Europe III.