Issue - meetings

To receive the Brent Pension Fund Q3 2024-25 Investment Monitoring Report.

Sawan Shah (Head of Finance, Brent Council) introduced the Brent Pension Fund Investment Q3 Investment Monitoring Update.  In terms of key highlights the Board was advised that the Fund had posted a positive return with a valuation of £1,335.8m up from £1,279.2m at the end of Q2.  The Fund's passive global equity exposure had been the main driver for positive returns on an absolute basis, along with exposure to UK and emerging market equities. Within the income assets, the Fund's private debt and property exposure had contributed to performance on an absolute basis with the main detractor being the Fund’s government bond exposure, which had fallen in value as gilt yields had risen over the period.  On a relative basis, Members were advised that whilst assets had combined to return 3.9% over the second half of 2024 the Fund had underperformed its return benchmark by 0.2% and was also behind its composite benchmark over the past 12 month and 3 year period with members noting the current target and asset allocations exposure on an interim and long term basis across growth, income/diversification and protection plus cash and reflecting the Funds Investment and diversification Strategy. Cash held by the Fund had increased over the period to £65 million, with no major changes in asset allocation during this time and Funds identified as having performed in line with market trends.  This included not only a focus on Global Equity but also Multi Asset, Property and Infrastructure investment allocations which were aimed at reducing volatility. 

The Monitoring Update also included details on the Fund’s Asset Allocation, which it was noted remained broadly in line with the overall Investment Strategy and the Fund having achieved an overall return of 9.7% through the year with the funding level estimated to be 134% in advance of the next scheduled valuation in 2025.

Having thanked Sawan Shah for the update, the Chair invited comments from the Board, with the comments raised summarised below:

• In response to clarification being sought on the measures in place to monitor performance of Fund Managers the Board was advised of the arrangements established with Hymans Robertson as the Fund Investment Advisor to provide assurance in relation to the monitoring of performance by individual Fund Managers.  In terms of the negative performance identified in relation to the BlackRock UK Gilts Fund the Board was advised this had been designed to operate as tracker Fund following the UK index with current performance reflecting volatility in that sector rather than being attributed to the manager given the Fund was performing as expected by accurately tracking its benchmark.  As further assurance the Board was advised that the Sub Committee had been provided with further clarification on the role of gilts in the investment portfolio, with members advised of the importance demonstrated in maintaining a diversified investment strategy.

In noting the report had been subject to detailed review at the Brent Pension Fund Sub Committee on 19 February 2025, the Board RESOLVED to note the Q3 2024  ...  view the full minutes text for item 10

To receive the Brent Pension Fund Q3 2024-25 Investment Monitoring Report.

The Chair then moved on the remaining items on the agenda and welcomed James Glasgow and Malcom Olsson (Hymans Robertson) who introduced a report, which outlined performance of the Brent Pension Fund over the third quarter of 2024-25. The Key points highlighted during the report are summarised below:

In introducing the report Malcolm Olsson began by providing a brief market overview and summary of the previous six months of the Fund’s investment performance, before detailing Brent Pension Fund's assets and liabilities.  The regional equity performance within the Fund was noted to have varied significantly, with North American equity leading while Europe (excluding UK) had performed more negatively at -3.8% and UK equities having shown a moderate performance of approximately 1.9%.  The rise in interest rates was also noted during Q4 which had directly impacted UK gilts with energy and basic materials having been the main detractors within global equity sectors. Factors affecting performance also included uncertainty from the recent North American election and decreasing oil prices which were adversely affecting energy industries. Consumer discretionary sectors had been observed to have performed well, which was noted as expected during a time of economic growth.

Moving on to consider Total Fund performance, the Sub Committee were advised of positive returns at 3.9% over the last six-month period. The Fund had posted a positive return for much of the quarter, ending with a valuation of £1,335.8m, up from £1,279.2m at the end of Q2, and £1,304.4m at the end of Q3 2024.  The Fund's passive global equity exposure had been the main driver for positive returns on an absolute basis, along with exposure to UK and emerging market equities. Within the income assets, the Fund's private debt and property exposure had contributed to performance on an absolute basis with the main detractor being the Fund’s government bond exposure, which had fallen in value as gilt yields had risen over the period.  On a relative basis, Members were advised that whilst assets had combined to return 3.9% over the second half of 2024, the Fund had underperformed its return benchmark by 0.2% and was also behind its composite benchmark over the past 12 month and 3 year period with members noting the current target and asset allocations exposure on an interim and long term basis across growth, income/diversification and protection plus cash and reflecting the Funds Investment and diversification Strategy. Cash held by the Fund had increased over the period to £65 million, with no major changes in asset allocation during this time and Funds identified as having performed in line with market trends.  This included not only a focus on Global Equity but also Multi Asset, Property and Infrastructure investment allocations which were aimed at reducing volatility.  It was noted that global equities had performed well, with a small increase in valuations across the board for total growth assets.  In terms of asset allocation, members were advised that the LCIV Infrastructure Fund had continued it distribution phase with cash proceeds of £6.7m also  ...  view the full minutes text for item 6