Issue - meetings

This report prepared by P-Solve, provides details of the performance and the market value of the Council’s pension fund investments for the quarter ending 30^th June 2010.

Helen Smith, P-Solve, introduced the report, which set out the performance of the Council’s pension fund in the quarter ending 30 June 2010. The period described, and the period subsequent to it, had been a period of volatility, with the value of the fund first falling and then rising to its previous level. The performance and prospects for different mandates within the fund were analysed, including the harsher market conditions faced by the Goldman Sachs Matching Fund mandate, and the respective performances of Barings and Ruffer within the Dynamic Asset Allocation Mandate.

Councillor Murphy asked what level of confidence P-Solve had in Goldman Sachs continuing to meet their targets. Helen Smith said that their mandate had been in an area in which it had been relatively easy to outperform their target, but as conditions in the bond market changed, this would become more challenging.

The Chairman and Councillor Murphy asked questions about the performance of Barings, with regard to their performance relative to that of Ruffer and with regard to their exposure to emerging market equities respectively. Helen Smith said that Ruffer’s portfolio contained more risk than that of Barings and that, with this in mind, P-Solve were happy with the allocation balance between the two managers, and that it was too early to consider changing it. With regard to Barings’ exposure to equities, this was to equities as a whole, rather than emerging market equities in particular.

Councillor Cartwright asked, in the light of recent articles in The Evening Standard, about the tobacco industry stock held by the fund, and whether any policy was in place on ethical holdings. The amount held was relatively low, but there was no specific ethical policy on what stocks the fund held, though it would be one of the factors a fund manager would consider.

RESOLVED THAT

The report be noted