Agenda item

That the Committee note the report and discussed progress being made by the Wales Pension

Partnership.

Mr Latham ran through this item of the agenda noting the business that was picked up at the last JGC meeting that he and the Chairman attended on 25 September 2018. He noted that the majority of work that has been recently completed has been in relation to securing a transition manager for global equity assets which is planned to take place on 14^th January 2019.

Mr Latham said that 4% of the Funds’ assets will be transitioning from the current Investec global equity mandate to the WPP Authorised Contractual Scheme (ACS) and this equates to around £80 million. There has also been work around the UK and European mandates, which the Fund will not be investing in, but is going well and he anticipates the assets to be transitioned in March 2019.

The main concentration is on the fixed income strategy and Russell Investments, as part of the Operator, has been looking at different proposals to meet the needs of the administering authorities.

            Mr Latham referred back to Mr Hibbert’s point from earlier and added that the global equity mandate is a clear win-win situation.  However, the fees that the Fund currently pays for certain mandates may not always reduce as part of asset pooling, as many existing mandates already have very competitive fees that are unlikely to be made available to the WPP.  

On the investment side of the WPP, Mr Latham believed that everything is still going well from his point of view. Mr Latham added that on 30^th November, Mrs Fielder is attending the Officer Working Group meeting and she will ensure that the Fund's aims are safeguarded in relation to the fixed income portfolio.

In relation to the governance side of the WPP, the Host Authority has undertaken interviews for the vacant officer position.

Mr Latham acknowledged the agenda for the Officer Working Group on 30^th November and that stock lending is a matter for the JGC to consider.

Mr Hibbert asked whether there is an intention to comply with SAB requirements in relation to scheme representation on the JGC. He asked this point is highlighted at the Officers' Working Group on Friday and Mrs Fielder confirmed that she would.

Cllr Jones queried the point relating to Pension Board's discussions on the governance of the pool on page 59 and raised his own concerns around the lack of business planning. Mrs McWilliam confirmed that across Wales the Local Pension Boards were considering writing a letter to the pool regarding the business plan and other governance matters.    Mrs McWilliam confirmed she was part of discussions with the other Local Pension Board chairs.

Mr Latham added that there needs to be a Responsible Investment Policy put in place by the pool. Currently the Government state that it is an administering authority responsibility locally.  However, it may be challenging to meet all individual Fund's responsible investment objectives in a pooling environment.   This will be something to consider once the WPP draft policy has been developed.

Mr Everett noted that this would be a potential topic that could become political and does need collaboration across Wales as much as possible. 

On page 26, Cllr Bateman wanted to confirm how benchmarking will be used to assess performance of the Fund and the WPP. Mr Latham said that there are a number of benchmarks that he expects to report on which will be in line with CEM benchmarking.

RESOLVED:

That the Committee note the report and discussed.