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ITEM PF3(c)

PENSION FUND COMMITTEE – 6 NOVEMBER 2002

Minutes of the Meeting commencing at 2.00 pm and finishing at 3.05 pm

Present:

The Committee considered the matters, reports and recommendations contained or referred to in the agenda for the meeting and decided as set out below. Except insofar as otherwise specified, the reasons for the decisions are contained in the agenda and reports, copies of which are attached to the signed Minutes.

62/02. APOLOGIES FOR ABSENCE AND TEMPORARY APPOINTMENTS

Apologies for absence and temporary appointments were received as follows:

Apology from	Temporary Appointments
Councillor Moley	Councillor Julian Cooper
District Councillor Mary Neale	-

63/02. EXEMPT ITEMS

RESOLVED: that the public be excluded during the consideration of item 4E in the Agenda since it was likely that if they were present during that item there would be a disclosure of "exempt" information as described in Part I of Schedule 12A to the Local Government Act, 1972 and specified below the item in the Agenda, i.e. information relating to the financial or business affairs of any particular person (other than the authority).

PROCEEDINGS FOLLOWING THE WITHDRAWAL OF PRESS AND PUBLIC

64/02. REVIEW OF THE OXFORDSHIRE PENSION FUND’S MANAGEMENT STRUCTURE*

(Agenda Item 4E)

At the special meeting of the Committee on 7 October, representatives from Hymans Robertson presented a paper reviewing the investment management arrangements of the Pension Fund. Following discussion, members decided to ask Hymans to prepare a report focusing on a maximum of 3 modified structures based on the suggested structures (e) (Simple Passive) and (d) (Core Satellite), as contained in their report so that these could be considered at a further special meeting of the Committee.

The Committee considered a report prepared by the Director for Business Support & County Treasurer and the Independent Financial Adviser (PF4E) which gave a brief explanation of the 3 modified structures, and presenting the following three options:-

V1 Core Satellite with one multi-asset active manager, together with a range of specialist asset managers, but with no assets passively managed;

V2 Simple Passive with one multi-asset passive manager, one multi-asset active manager and a range of specialist asset managers; and

V3 Targeted Passive with one multi-asset active manager, one passive manager of UK equities and a range of specialist asset managers.

With regard to paragraph 5 of the report, the advice of the Head of Legal Services was circulated, a copy of which is attached to the signed Minutes.

Also circulated was a copy of a letter from Mr Malcolm Leeding, Beneficiaries Observer, expressing his view that option V3 should be adopted on the grounds that, although it was more complex, it included an element of passive management to give some advantage in appropriate matters, whilst making use of specialist fund managers. He also expressed his support for the use of the specialist company named in the report to manage the process of tendering for manager.

Councillor Law proposed and Councillor Mold seconded a motion to adopt management structure V3 as the future fund management arrangement. A vote was taken and this was lost by 4 votes to 3.

RESOLVED: (nem con)

1. to disregard management structure V2 (simple passive, with multi-asset passive manager), as the possible benefits of passive management are largely concentrated in UK equities;
2. to adopt management structure V1 (core satellite with one multi-asset active manager, together with a range of specialist asset managers, but with no assets passively managed) as the future fund management arrangement;
3. not to pursue in-house investment management;
4. to appoint a named company to manage the tendering process and provide the necessary analysis to select a shortlist of fund managers;
5. to ask the officers to invite suitably qualified consultants to assist the Committee with the selection and appointment of fund managers;
6. to ask the officers to invite suitably qualified consultants to assist the Committee in the tendering and appointment of a global custodian.

in the Chair

Date of signing 2002

* The report relating to the exempt item has not been made public and should be regarded as strictly private to those members and officers entitled to receive it

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