Agenda and draft minutes

The Committee noted that apologies had been received from Cllrs Marshall and Mackover, Robert Davy, Ross Owen and Richard Hubbard.

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.

There were none.

The Minutes of the meeting held on 15 April were agreed to be an accurate record and signed by the Vice-Chair.

Phil Triggs noted there would be a paper on Baillie Gifford’s long-term achievements and progress in relation to the Fund at the next quarterly meeting, which would be incorporated with a comparison reference, the long-term objectives of the LCIV pool.

Action: Phil Triggs

The Committee noted that an extra meeting was scheduled for 16 September where a decision would be made on proposals for levelling up investment.

The Committee noted the other updates in the action tracker.

Phil Triggs made the following comments. The projected cash flow figures were prudently calculated and reflected the market rate of inflation at the time concerning cash outflows. It was a challenge to forecast figures so far into the future and officers would continue to update the forecast and model figures for the Committee. Passive equity funds were extremely liquid and could meet the need to balance out the forecast negative cash flow from 2026/27 onwards. With continuing property acquisitions, rental income was forecast to increase, with the figures used in the model (not reflecting possible future CPI growth) being very prudent.

The Committee RESOLVED – that the report be noted.

Phil Triggs introduced the report and confirmed that the proposal was in accordance with the previous government’s white paper on levelling up. He advised that a suitable building for long-term temporary accommodation (TA) purposes had not yet been identified and a report to the scheduled meeting of 16 September would include clear proposals.

James Brundrett advised that other London borough LGPS schemes favoured investment in social or affordable housing in seeking to diversify investment and included the appointment of expert property advisors as was planned for the RBKC proposal. He noted that the RBKC proposed funding levels would be modest in size.

The Committee briefly discussed the options set out in the papers. Some members expressed a preference for the option of a loan from the pension fund to RBKC. Two independent members present (Messrs Bunn and Cooke) were not in favour of the purchase of a property for TA purposes and commented that this option was in compliance with the (Investment Strategy Statement (ISS) insofar as it applies to the parameters on acquisition of commercial property, questioning why scheme members would support it.

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

The Committee RESOLVED – that no action was needed at this point to bring the strategic asset allocation back in line with the strategic target.

Phil Triggs commented that the revised form in the appendices had been amended as requested at the last meeting to reflect a yes/no response with space to add further relevant information. Moreover, the questions acknowledged and now reflected the different responsibilities of the Investment Committee compared with the Pension Board; the former with a clear focus on investment decisions and the latter with a role covering governance and administration issues.

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

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

          Appendix 1: Northern Trust Performance Report

Appendix 2: Baillie Gifford Quarterly Report

Appendix 3: Baillie Gifford Additional Information

Appendix 4: Adams Street Quarterly Report

Appendix 5: Osiris Quarterly Report

Appendix 6: Actuarial Funding Report

Phil Triggs noted the good investment performance over the last 12 months. He drew attention to the position of the RBKC fund’s leading, number one position in the PIRC Local Authority Fund Statistics Universe League tables for 2023/24 across every period for total fund performance from one year to 30 years’ performance. He pointed out that the funding level of 199% at 31 March 2024 was the highest ever achieved by any LGPS fund.

No questions were raised on the exempt appendices.   

The Committee RESOLVED – that the report and appendices 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.]

Phil Triggs noted that the DG Publishing Local Authority Pensions Fund (LAPF) Award shortlisting would be announced later this year, with the final judges’ decisions announced in October. The RBKC fund has been nominated for its investment strategy.

Mr Triggs also referred to the Local Government Chronicle article circulated to the committee members recently. The appointment and identity of the incoming local government minister was yet to be clarified, however, the previous minister had held discussions on merging LGPS funds on 5 July. Future pooling of funds was perceived as a mechanism for minimising management fees and the previous minister had spoken of LGPS governance in general as patchy in places, albeit with some well governed funds achieving good investment performance. The draft response to fund merger proposals was with the Chairman and the deadline for submission of the final response was 19 July.

No questions were raised on exempt papers in the Mercer Investment Advisor Update.

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

This item was considered in the private session of the meeting.

The part B minutes of the meeting held on 15 April were agreed as accurate and signed by the Vice-Chair.