Issue - meetings

To receive the Brent Pension Fund  Q1 2025-26 Investment Monitoring Update Report.

To receive the Brent Pension Fund  Q1 2025-26 Investment Monitoring Update Report.

The Chair then moved on to deal with the remainder of the agenda and began by inviting Kenneth Taylor (Senior Investment Analyst, Hymans Robertson LLP) to introduce a report, which outlined the performance of the Brent Pension Fund over the first quarter for the 2025 financial year.  In addition to the performance update, the Sub Committee was advised the report also included an update focussed around the impact on the Fund’s assets following the US Administration’s “Liberation Day” tariff announcements in April 2025 and outlook for the main asset classes and considerations for the Fund.

In noting the outline provided in relation to market background covering the monitoring period the Sub Committee were advised in relation to total Fund performance that the Fund had posted a negative return over the quarter, ending the period with a valuation of £1,310.1m, down from £1,335.8m at the end of Q4 2024.  The Fund’s passive global equity mandates were identified as the main contributors to negative absolute returns over the quarter. UK government bonds had also detracted, as rising gilt yields led to a fall in their value. In contrast, UK equities had delivered positive returns during the period.  On a relative basis the Fund had underperformed its benchmark by 0.1%. The Fund was also behind its composite benchmark over the past 12 months and over 3 years 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 had decreased slightly over the period to £63.6m.  Whilst US tariffs on imports had led to material falls in equity valuations during April it was noted markets had since largely recovered.

As at 31 March 2025, the funding level was estimated to be 131% with the fall in the funding level in Q1 2025 mainly attributable to a decline in asset values driven by market movements.  Members also noted that a formal actuarial valuation was in the process of being carried out (as at 31 March 2025).

Moving on to consider performance relating to Fund Managers, members were advised that the portfolio had delivered a return of -1.6% over the first quarter of 2025 to 31 March, underperforming its benchmark by 0.1%. While performance over the past 12 months and 3-year periods remains strong on an absolute basis, returns had continued to lag the benchmark over both timeframes.  After a period of strong gains, global equities had posted negative returns in Q1 2025 with UK equities the only growth asset class to have delivered a positive return during the quarter. In contrast, emerging market funds had declined and underperformed their respective benchmark.

It was noted that the decline in global equities had been driven by renewed tariff-related uncertainty, which had weighed on investor sentiment. As a result, market participants had rotated out of high-valuation US technology stocks in favour of lower-valued names, leading value stocks to outperform growth.  ...  view the full minutes text for item 6