Agenda item

To receive the Brent Pension Fund Q2 2021 Investment Monitoring Report.

Kenneth Taylor (Hymans Robertson LLP Investment Consultant) introduced a report which outlined the performance of Brent Pension Fund during Q2 2021. 

In presenting the report, the following were highlighted as key strategic points:

·                The Committee were updated that Q2 had involved a strong performance by the Fund, with a £45m million increase in value, which was equivalent to a 5.1% return.  This was ahead of the benchmark set for The Fund and continued the strong rate of returns being delivered reflecting the increase in economic activity as a result of the easing of restrictions as part of the global recovery from the pandemic.

·                The main driver of returns were The Fund’s growth holdings and equity investments, with the Baillie Gifford multi asset fund having produced particularly strong performance.

·                In terms of Asset Allocation and valuation the Fund remained broadly in line with the interim target allocations for growth and income assets. In terms of valuation the Fund’s assets had grown from £1032m to £1076m with £48m held in cash at the end of the quarter.  It was, however, noted that this included £30m earmarked for investment in the new BlackRock Low Carbon equity fund.

·                The proposed approach towards scaling back investment in the Capital Dynamics and Alinda Infrastructure Funds remained on track with the aim to scale up the proportion of investment held with the London CIV.  This would include the LCIV Infrastructure fund which whilst in its infancy would see an expected ramp up over the next 3 years alongside the ongoing commitment to the LCIV private debt fund.

·                The approach also being developed in relation to strategic property investment, on which it was noted a report was due to be considered by the Sub Committee later on the agenda (Min item 13 refers).

An overview was then provided in relation to manager performance of the various funds, with the following noted:

·                That total Fund return was positive during the quarter, with longer term performance also comfortably ahead of targets.

·                In growth assets, it was noted that there was very strong performance from the equity investments in global, UK and private equities. Growth assets were noted as being the main driver of returns over the quarter.

·                The Baillie Gifford multi asset Fund had posted strong performance, driven by listed equities, property and infrastructure allocations which had benefited from the ongoing economic recovery.  Strong performance had also been identified in relation to the Ruffer multi asset Fund, with the returns from both at 14.2% relative to the benchmark of 2.1%.

·                The reasons identified for the lower than expected performance in relation to the Capital Dynamics and Alinda Infrastructure funds.

The Chair thanked Kenneth Taylor for his presentation and members were then invited to ask questions, with the responses summarised below:

·                In relation to the Black Rock low carbon equity fund clarification was provided regarding the timescale for initial investment, which had been made at the start of September 21.  Further details would therefore be included as part of the next monitoring update to the Committee in February 22.

Members welcomed the update provided and with no further issues raised thanked Hymans Robertson LLP for their presentation.  It was RESOLVED that the report noted.