Agenda and minutes

None.

Any Member of the Committee, or any other Member participating in the virtual meeting, who has a disclosable pecuniary interest, in a matter to be considered at the meeting is reminded to disclose the interest to the meeting and to leave the meeting while any discussion or vote on the matter takes place.

Members are also reminded that if they have any other significant interest in a matter to be considered at the meeting, whether registered or not, which they feel should be declared in the public interest, such interests should be declared to the meeting. In such circumstances Members should consider whether a member of the public, with knowledge of the relevant facts would reasonably regard the interest as so significant that it is likely to prejudice their consideration or decision making. If the Member considers that to be the case, they should leave the meeting while any discussion or vote on the matter takes place.

None.

The part A and B minutes of the meeting held on 24 January 2024 were confirmed as a correct record and signed by the Chairman.

– to follow

Regarding investment and the government’s levelling up agenda, more interpretation of this element was underway and would be circulated to members and co-optees soon.         

Action: Phil Triggs

Phil Triggs confirmed that the rebalancing as agreed at January’s meeting had been implemented with immediate effect and all asset classes were within the agreed limits of the schedule.

The Committee noted Mercer and officers would monitor the fund against the long-term achievements of the pooled approach.

The Chairman commented that feedback for the Responsible Investment Statement had now been received and he would be finalising the document.

Action: Chairman

The Committee noted the other updates in the Action Tracker.

Exclusion of the Press and Public

The Chairman indicated that he was minded to resolve to move into Part B (private) session at this stage to consider the exempt items: CBRE Direct Property Update and confidential minutes of the 24 January 2024 meeting of the Investment Committee and the Appendices to items 6 and 10.

The Chairman moved, and Cllr. Lane seconded, this proposal. The Committee concurred and duly:

RESOLVED - that the press and public be excluded as the reports and appendices in this part of the meeting contain information relating to the financial or business affairs of any particular person (including the authority holding that information), information in respect of which a claim for legal professional privilege can be maintained in legal proceedings, and in all the circumstances of each case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

[Notes: Following conclusion of the Part B discussions, the Committee returned to Part A (public) session to take decisions on the Part A agenda items, as recorded below.]

Spencer Adair (a Partner and Investment Manager at BG) and Claire Phillips (Client Relationships Director at BG) were in attendance and introduced themselves. The Committee noted that BG had been actively investing RBKC pension funds for 30 years. Spencer Adair spoke to the presentation slides, hard copies of which were in part B pack of the committee papers and, responded to questions from the Committee.

The Committee noted the research reports in the appendices on Baillie Gifford, and the reports on Climate Action 100+ and LGPS current issues.       

Phil Triggs drew the Committee’s attention to continued government interest in seeking economies of scale from a reduced number of funds from the current 86.

The Chairman suggested that a future meeting of the Committee should make an active decision on the continuation of Baillie Gifford as the Fund’s global equity active manager.

Action by: Phil Triggs / Jerome Treherne

The Chairman commented that in the past liquidity modelling had provided reassurance that the fund had ample liquidity to meet its liabilities. He requested that liquidity data be provided for July’s Committee.

Action by: Phil Triggs

<AI6>

77

The Committee RESOLVED – that the content of the report and the attached appendix be noted and agreed to the implementation of the liquidity policy included in the committee papers.

The Committee RESOLVED – that the report be noted.

The Chairman welcomed the report which he considered could assist in forming the basis for member training. He asked for some changes to the forms before Members were asked to complete them of firstly, more filtering in identifying training needs as some were more relevant to Pension Board members and secondly, to adopt a more nuanced approach to member self-assessment to allow for existing skill levels and understanding to be recognised and taken into account.

Action by: Julia Stevens

The Committee RESOLVED – that the report and policy be noted.

The Chairman commented that wider staff engagement with Terry Oliver’s team would take place with their attendance at a later working group meeting. The Committee noted the challenge of exploring the extent of suitable actionable measures would be a key outcome from the working group’s deliberations.

The Committee noted a Freedom of Information request had been recently received for access to summary notes of working group meetings. The Chairman supported disclosure of information exercising the discretion permitted within the law but as a matter of curtesy, permission from external speakers should be sought before making any the decision to disclose notes made at meetings.

Action: Jerome Treherne / Legal Services

The Committee RESOLVED – that the feedback report be noted.

The Committee RESOLVED – that the quarterly performance review reports be noted.

[Each written report on the public part of the Agenda as detailed above:

(i)                       was made available for public inspection from the date of the Agenda;

(ii)                      incorporates a list of the background papers which (i) disclose any facts or matters on which that report, or any important part of it, is based; and (ii) have been relied upon to a material extent in preparing it. (Relevant documents which contain confidential or exempt information are not listed.); and

may, with the consent of the Chairman and subject to specified reasons, be supported at the meeting by way of oral statement or further written report in the event of special circumstances arising after the despatch of the Agenda.]

None.

The Committee thanked Andrew Peacock for his support and contributions over direct property investment over the last 4 years as this would be his last meeting before retirement.

Messrs Corderey and Rutter spoke to the exempt report and provided further details on the general state of the market, properties within the portfolio, potential new acquisitions, and asset management performance.

In response to questions on the pace of investment, Tom Corderey indicated that with greater liquidity expected in quarter 4 and more realism from sellers, it was realistic to expect the level of investment to reach circa to £200m by year end.

In response to a request for an update on Kingspan cladding issues, Tom Corderey reported that all Kingspan cladding was to be replaced on the Premier Inn Richmond property, that the Aldi building in Oxford was to have alternative cladding on its extension and, the Premier Inn’s façade in the Oxford now had less than 1% of Kingspan cladding. 

The Committee discussed possible sectors for future investment. Tom Corderey commented that commercial property lot sizes on the auction market tended to be too small for consideration by the fund. He agreed that focus in the near future would be for more industrial sector purchases and one or two alternative investments to maintain a balanced portfolio.

The Committee discussed the challenges of installation of solar panels and EV charging points as part of property management. Tom Corderey commented on the absence of established protocols and agents for these elements and the difficulty of moving charging points once in position. Graeme Bunn agreed that in his experience charging points were not a flexible element for properties with long lease terms and did not deliver an adequate return.

The Committee RESOLVED – that the report be noted.</AI12>

The Chairman agreed that this presentation could be delivered as part of the public part of the meeting.   

The part B minutes of the meeting held on 1 November 2023 were confirmed as a correct record and signed by the Chairman.

Phil Triggs reported on the final agreement on the Baillie Gifford fee structure which had been fixed at £1.220 million for 5 years with no CPI related increase over this period, with effect from 1 October 2023.