Agenda item

This report provides an update on the Investment Strategy Review.

(Agenda republished to include the attached report on 11 February 2026)

The Chair noted that certain aspects of this item, along with Agenda Items 7 (Investment Monitoring Report - Q4 2025) and 8 (2025 Triennial Valuation Results and Funding Strategy Statement)contained exempt information which, as required, would need to be considered in the closed session of the meeting.

Manish Shah (Senior Finance Analyst) introduced a report from the Corporate Director Finance and Resources providing final details on the review undertaken by the Pension Fund’s investment advisor, Hymans Robertson, of the Fund’s current investment strategy, following on from its 2025 valuation.  Members were advised that the purpose of the review was to evaluate the current investment strategy and analyse the ability of alternative strategies to meet the Fund’s strategic objectives. In presenting the update members were advised that following on from the 2025 triennial valuation and the October 2025 meeting, it had been established that the Sub-Committee would be adopting a new long-term investment strategy as modelled by Hymans Robertson, who had been commissioned to review and evaluate the current investment strategy and to provide final analysis and recommendations. It was noted that from this review onwards, investment setting would be the responsibility retained at Brent Pension Fund level, with investment implementation delegated accordingly.

Manish Shah then invited James Glasgow (Hymans Robertson) to provide further analysis, presenting the key findings and recommendations of the Investment Strategy Review. In presenting the update, he highlighted the following key points:

·            The strategy review had been conducted in correlation with the triennial actuarial valuation. The work undertaken was predominantly focused on ensuring sufficient resources to meet benefit payments as they fell due, recovering any shortfalls in assets, keeping employer contributions as stable as possible at reasonable cost, and maximising investment returns within reasonable risk parameters.

·            The outcome of the analysis had led to a series of recommendations set out in the executive summary of the report. The Sub-Committee had agreed in October 2025 to adopt a new long-term investment strategy, referred to in the report as Alternative Three. This new strategy included new allocations to private equity and natural capital, a reduction in the infrastructure allocation, and an increased allocation to protected assets.

·            In terms of required changes to current assets, specifically the Multi-Asset Funds, the proposed changes had been categorised into two groups: those that could be implemented over the near term through officers, and those that would take longer to implement and would require engagement with London CIV to clarify responsibility.

·            In respect of immediate actions, it was recommended that the Fund reduce its allocation to the Multi-Asset Fund, which was currently overweight, and reinvest those assets into the protection portfolio to increase the allocation to Fixed Interest Gilts and Multi-Asset Credit. Multi-Asset funds were to be reduced from 14.3% to 5.0% (down 9.3%) in the long term, with the review strategy recommending reducing over exposure by around 7% in the short term with around a third of the proceeds from the sale to top up Gilts. The remaining balance from the sale was then to be invested in multi asset credit. This was expected to take place after 1 April, with officers to engage with LCIV to clarify responsibilities for implementing these changes and the timing, as detailed had been within section 4.7.1 of the accompanying report.  Members were advised that further detail on the proposed approach and recommendations had been included within Appendix 2 of the report (containing exempt information) which would be considered in the closed session of the meeting.

·            Regarding the growth asset portfolio, exposure was planned to be moved down by 10.5% to 47.5% in the long term with other recommendations outlined including continuing the move towards lower carbon index-tracking global equity mandates in support of the Fund's net zero ambitions, engaging with London CIV regarding the planned launch of a lower carbon UK equity fund, and exploring private equity (Increased from 0.1% to 2.5%, up 2.4%) in the context of local investment opportunities as and when developed by London CIV. This was being driven by the requirement of the government’s Fit for Future proposals for Funds to allocate more assets to local investment. The review recommended the Fund to introduce a 2.5% target allocation to private equity although it was noted final details on how this would be assigned would need to be decided between partner funds and the pool, as there was no offering by LCIV at the time of the meeting. Global equities were planned for a reduction, from 45.9% to 37.0% (down 8.9%)

·            On the income side, recommendations included reducing the multi-asset fund allocation given the overweight position; reducing the infrastructure allocation to 10% to enable reallocation elsewhere; maintaining the current approach to private debt; and exploring the London CIV property vehicle, developed in partnership with CBRE, as a platform to increase the Fund's property allocation to 10%. Natural capital was also identified as providing a useful diversifier offering alternative assets away from listed investments.

·            A key recommendation was the increase to protection assets, including both gilts and multi-asset credit allocations to 10%. This was identified as one of the short-term actions that could be implemented immediately, to be funded from the currently overweight multi asset funds.

·            For longer-term assets, including private equity and natural capital (a new allocation with a planned increase of 2.5%), it was acknowledged that these would take a number of years to build and that engagement with London CIV would be necessary. Members were encouraged to maintain active dialogue with London CIV on those assets with longer implementation timelines of seven to eight years.

Members thanked officers along with Hymans Robertson for the outline provided of the Strategy and key recommendations with the Chair advising members they would have the opportunity to raise any more detailed comments/questions regarding implementation of the investment strategy as part of the accompanying LCIV update due to be considered later during the meeting in the closed session.  On this basis and having noted the exempt appendix, the Sub-committee RESOLVED to:

(1)      To note the outcome of the Investment Strategy Review undertaken by Hymans Robertson.

(2)      Agree the high-level conclusions and recommendations set out in the review (as detailed in section 2.2 of the report) as the basis for implementing the new long-term investment strategy.