Issue - meetings

To receive the Brent Pension Fund Q2 2025 - 26 Investment Monitoring Update Report.

Sawan Shah (Head of Finance, Pensions and Housing Companies) introduced the report, highlighting the following key points:

• Findings shown within the report demonstrated that the fund posted positive returns over the quarter, ending the period with a valuation of £1.36 million compared to £1.32 million in Q1. Sawan Shah noted that these findings hid the volatility experienced in April 2025. Whilst looking relatively flat, during the first and second week of April the Liberation Day tariff announcement saw sharp selloffs in the global markets. Despite the US administration's quick change in course, in the second half of April, global equities gained roughly 5.2%. This was driven by the US technology sector alone.

• Overall, the Pension fund was reported to have gained a 3.2% return throughout the quarter, slightly outperforming the expected benchmark with overall yearly returns standing at around 5.7%, of which most returns came through passive global equity mandates. The UK equities and emerging markets were also reported to have performed well. Government bond holdings were largely flat through the quarter, which was shown within the appendices demonstrating how the fund's returns were weighted by size. 

Following the conclusion of the report, the Chair thanked Sawan Shah for the update and opened the floor to any questions or comments from the Board, with the points summarised below:

• The Board asked officers to detail their current forecast for government bonds. Sawan Shah explained that the government bond market, especially at the short end, was currently highly volatile. The most recent bond forecast from October was noted to be positive, yet government bond yields had fallen in value through the rest of the month. Government cost of borrowing was not as strong as previously; however, this had also had an inverse impact for the bond price. As such, bond prices had gone up through October, and future prospects were unpredictable with officers uncertain of where government bonds would eventually settle. Bond markets were stated as a reason for the US administrations’ change in course due to yields sharply increasing, and only when US actions had a material impact on the rate that the US government could borrow did they step back from their policy choices. As such, officers believed the bond market held considerable influence.

Members of the Board inquired as to whether the UK had recently downgraded its national financial security or credit standing. Sawan Shah noted that in the last month, government bond yields had gone down significantly, by approximately 0.2 - 0.3%. As such, October was seen to be favourable for the UK government in terms of its borrowing, taking advantage of low-cost yields. General decreases in the UK’s credit standing were noted with sector volatility remaining. Officers noted that government bond yields were now higher and, did not believe that bond yields were going to go back down to levels seen during 2020/2021. Rather it was expected that bond yield rates would fluctuate around the 4% or 5% mark, where they sat at the time of the  ...  view the full minutes text for item 9

To receive the Brent Pension Fund Q2 2025 - 26 Investment Monitoring Update Report.

The Chair invited James Glasgow (Hymans Robertson) to introduce a report, which outlined the performance of the Brent Pension Fund over the second quarter for the 2025-26.

In noting the outline provided in relation to market background covering the monitoring period the Sub Committee were advised that equity returns had remained volatile following announcements from the US Administration on Liberation Day, although this position had stabilised as nervousness within the markets had been short-lived, partly due to the backtracking by the US Administration with markets recovering earlier losses.  Having recovered initial loses members were advised that global equities had actually finished up 9.4% in local currency terms. This performance was attributed to investor confidence and was strongly supported by mega cap tech stocks. The only outlier had been overseas bonds, which had fallen 1.7% following a surge in yields triggered by the US Administration's announcements of larger-than-expected reciprocal tariffs, which had also created nervousness in bond markets. Regarding the market backdrop over the quarter, James Glasgow reported that US GDP contracted 0.5%, down from 2.4% in Q4. However, this represented a somewhat distorted picture due to a surge in imports before April's tariff announcement, as companies attempted to complete purchases before the tariffs took effect. From an inflation perspective, CPI inflation rose to a greater than expected 3.4%, driven in part by energy price cap hikes. Interest rates in Europe were cut twice to 2%, while the Bank of England reduced rates from 5.25% to 4.25%, with a further reduction of 0.25% near quarter end, bringing rates to 4%.

In relation to total Fund performance members were advised that the Fund had posted a positive return over the quarter, ending the period with a valuation of £1,360.6m, up from £1,310.1m at the end of Q1 2025.  The Fund’s passive global equity mandates were identified as the main contributors to positive returns this quarter, reversing their position as the largest detractor in Q1. UK equities and emerging markets had also added gains, while property and credit had provided modest support. UK government bonds were broadly flat as long-dated gilt yields had shown little movement.  On a relative basis the Fund outperformed its benchmark by 0.1%. The Fund continued to remain 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.  The LCIV Private Debt II Fund had been funded across April and May 2025, valued at £17.1m as of end of Q2 2025.  Cash held by the Fund had had decreased over the period to £46.1m.

Moving on to consider performance relating to Fund Managers, members were advised that the Fund had delivered a return of 3.9% in Q2 2025, outperforming the benchmark by 0.1% which were based on long-term target allocations, and following the actuary evaluation and strategy review to be discussed later in the  ...  view the full minutes text for item 6