Issue - meetings

The Committee considered and noted the update.

Mr Fielder stated that the Fund are currently on track in all areas within the business plan. She commented the following key points:

-       WPP formally requested to establish an active sustainable global equity sub-fund, which is continuing to progress.

-       A new investment was made with Bridges Property Fund V, within impact and local investments.

-       The Fund attended a session with Together Creating Communities (TCC), which discussed how the Fund are progressing with Responsible Investment (RI), in particular, rapidly divesting in carbon.

-       In regards to the Fund’s cashflow position, the Fund reduced the risk of insufficient cashflow through improved monitoring as outlined in the risk register. In addition, the Fund are currently cashflow positive given that the Fund are receiving distributions from the private market investments.

-       WPP were due to go out to tender for a Private Markets allocator, and both Aon and Mercer have registered their interest.

-       Due to the WPP taking longer to implement private markets, they would not be in a position to implement the infrastructure and private debt portfolios for another couple of years. Therefore, Mercer had their remit extended to support the Fund in making any allocations to these asset classes, and accordingly there will be an increase in the consultancy costs, albeit these costs are offset by the reduction in management costs to Link and Russell.

-       The Fund are progressing the net zero ambition and expect improvements and updates in due course.

Mr Everett thanked the team and the Chairman. He noted the importance of Committee members helping the Fund with communicating their strategic position on Responsible Investment with a focus on engagement initially and particularly that implementing the Fund’s net zero ambition would take time. Mr Hibbert raised his concerns and difficulty in wholly supporting Mr Everett’s point and stressed the importance of divesting from carbon and investing in renewables as soon as possible. Mrs McWilliam clarified that the Fund’s strategy was to focus on engagement with divestment being an option where engagement was not successful.  Mrs Fielder added that divesting is an evolution for the Fund and that they had invested in renewables for a long time. The Fund can also expect to see some improvements from the proposed investment with WPP in sustainable active equities.

Mr Buckland agreed with Mrs Fielder and appreciated Mr Hibbert’s concerns. He stated that ultimately the Fund might well end up divesting from assets in a number of areas, however this would be because of the appropriate analysis and assessment of the existing position. Mr Hibbert was grateful for this explanation, and confirmed that he was not in favour of “blunt divestment” but supported the plan that divestment may be final option.

RESOLVED:

The Committee considered and noted the update.