Agenda item

(1)          Mr Vickers introduced a report which provided a summary of the Fund asset allocation and performance, including the Fund Position Statement as at 30 June 2014 along with Hymans Robertson Capital Markets Service Quarterly Update which was attached in the Appendix.

(2)          Mr Vickers reported to the Committee that at his quarterly meeting with DTZ mention had been made of the possibility of investing in residential property and stated that DTZ were considering investing in a residential property fund for the first time.  He explained that DTZ’s investment committee would be considering whether they should invest in this type of fund and as part of this process would carry out the necessary due diligence.  As the Superannuation Fund was currently overweight in equities and bearing in mind the interest previously expressed by the Committee in investing in residential property he sought the views of the Committee on whether they wished to pursue an investment in this fund on their behalf by DTZ, subject to their Investment Committee’s approval.

(3)       Members discussed the proposal and there was general agreement that this was something that the Fund should be investing in.

(4)      Mr Vickers referred to the need for the Fund to pay £60m to the Greater Manchester Pension Fund when all Probation staff transfer to a single Local Government Pension Scheme fund, this would take place in January 2015. He reminded the Committee that the Fund was overweight in equities but underweight in fixed income.  The Committee had previously decided that the funding should be taken from the Schroders Fixed Income mandate but he suggested that Members may wish to consider whether this was now the best option. He confirmed that there was time for the Committee to make a decision on this at their meeting on 14 November 2014.

(5)      The Committee considered the WM annual report for 2013/14 which had been circulated with the agenda.  Mr Vickers stated that a fundamental issue for the Committee was the overweight equity situation and this was a matter that would be considered at the annual strategy meeting.

(6)      In response to a question Mr Vickers undertook to see if information on KCC Superannuation Fund’s funding level compared to other County Council Superannuation Funds was available and if so to circulate it to members of the Committee. 

(7)      RESOLVED that:

         (a)       the Equity allocation be maintained at the current level subject to (b) below;

         (b)       authority be delegated to the Corporate Director of Finance and Procurement in consultation with the Chairman of this Committee to, subject to the necessary due diligence, authorise DTZ to invest up to £12.5m (no more that 10% of the total fund) from equities’ into the M & G UK Residential Fund FCP-FIS;

         (c)        further consideration of the means of funding the £60m for the transfer of Probation to the Greater Manchester Pension Fund be deferred until the 14^th November 2014 meeting of the Committee;  and

         (d)       the WM Local Authority Annual Review 2013/14 be noted.

(Councillor Eden-Green declared a prejudicial interest in one of the residential properties in the proposed DTZ residential portfolio and took no part in the debate or decision thereon.)