Issue - meetings

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

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