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________________________________
To Members
of the Pension Fund Committee
Notice
of Meeting
Meeting
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PENSION FUND COMMITTEE
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Date/Time
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Friday 20 February
2004 at 10.00 am
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Place
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County Hall,
Oxford
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Contact
officer
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Marion Holyman
(Tel:
01865 810177; E-mail)
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![](/SiteSpecific/impeysig.gif)
Chris Impey
Assistant Chief
Executive
12 February 2004
Membership
Chairman
– Councillor C.H. Shouler
Councillors:
Richard
Farrell
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Neville
F. Harris
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Brian
Hodgson
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Brian
L. Hook
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Jim
Moley
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Co-opted
Members:
AGENDA
- Apologies for Absence
and Temporary Appointments
- Declarations of Interest
- Minutes
To
approve the minutes of the meeting held on 21 November and on 1 December
2003 (PF3)
and to receive for information any matters arising therefrom.
- Petitions and Public
Address
- Overview of Past and
Current Investment Position
10:05 The
Independent Financial Adviser will review the investment activity
during the past quarter and present an overview of the Fund’s position
as at 31 December 2003 using the following tables: (PF5 - download
as .xls file)
Table
1 - provides a consolidated valuation of the Pension
Fund at 31 December 2003;
Tables
2 to 4 - provide details of the individual managers’
asset allocations and compare these against their benchmark
allocations;
Table
5 - shows net investment/disinvestments during the
quarter;
Tables
6 to 7 - provide details on the Pension Fund’s Private
Equity;
Tables
8 to 10 - provide investment performance for the
consolidated Pension Fund and for the four Managers for
the quarter ended 31 December 2003.
The
Committee is RECOMMENDED to receive the tables, and that the information
contained in them be borne in mind, insofar as they relate to items
7E to 9E on the agenda.
EXEMPT
ITEMS
The
Committee will be invited to resolve to exclude the public for the consideration
of the following exempt items (marked E) by passing a resolution in relation
to each such item in the following terms:
"that
the public be excluded during the consideration of the following items
in the Agenda since it is likely that if they were present during those
items 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 each item in the Agenda."
Note:
In the case of items 7E - 8E there are no reports circulated with the
Agenda. Any exempt information will be reported orally.
The
Fund Managers’ reports relating to the Exempt Items at 7E and 8E and any
information to be reported orally have not been made public and should
be regarded as strictly private to members and officers entitled to receive
them until after 20 May 2004.
6.E Overview
and Outlook for Investment Markets
10:20 The
Independent Financial Adviser will report orally giving an overview
of the current and future investment scene and market developments
across various regions and sectors. His oral report and the report
(PF6E), which is not exempt, will be supported by relevant
tables of economic and market trends, where appropriate, which are
attached. Any exempt information will be reported orally.
(Information
Exempt in that it relates to the financial or business affairs of
any particular person (other than the authority).)
The
Committee is RECOMMENDED to receive the oral report and tables, to
consider any further action arising thereon, and to bear the Independent
Financial Adviser’s conclusions in mind when considering the Fund
Managers’ reports.
7.E UBS
Asset Management
10:30 (a) The
Independent Financial Adviser will report orally on the performance
and strategy of UBS Asset Management drawing on the tables at
items 5 and 6E.
(b) The
representative(s) of the Fund Manager will:
- report and
review the present investments of their part of the Fund and their
strategy against the background of the current investment scene
for the period ending on 31 December 2003;
- report on
whether or not voting rights have been exercised and if so details
of the rights exercised;
- give their
views on the future investment scene.
In
support of the above is their valuation report for the period to 31
December 2003 and a separate report for the period.
At
the end of the presentation, members are invited to question and comment,
the Fund Managers to respond and, finally:-
(Information
Exempt in that it relates to the financial or business affairs of
any particular person (other than the authority).)
The
Committee is RECOMMENDED to consider and to adopt or amend any recommendations
before them.
8.E Alliance Bernstein
10.55 (a) The
Independent Financial Adviser will report orally on the performance
and strategy of Alliance Bernstein drawing on the tables at items
5 and 6E.
- The representative(s)
of the Fund Manager will:
(1) report and review the present investments of their part of the
Fund and their strategy against the background of the current investment
scene for the period ending on 31 December 2003;
(2) report on whether or not voting rights have been exercised and
if so details of the rights exercised;
(3) give
their views on the future investment scene.
In
support of the above is their valuation report for the period to 31
December 2003 and a separate report for the period.
At
the end of the presentation, members are invited to question and comment,
the Fund Managers to respond and, finally:-
(Information
Exempt in that it relates to the financial or business affairs of
any particular person (other than the authority).)
The
Committee is RECOMMENDED to consider and to adopt or amend any recommendations
before them.
9.E Report
of main issues arising from presentations and reports given by Fund
Managers not represented at this meeting
11:35 The
Independent Financial Adviser and officers received a presentation
from Baillie Gifford and a written report from Legal and General for
the quarter ended 31 December 2003 at County Hall. The Financial Adviser
will report orally on the main issues arising from the presentation
and the report in conjunction with information contained in the Tables
(Agenda item 5) and the managers’ quarterly valuation reports.
(Information
Exempt in that it relates to the financial or business affairs of
any particular person (other than the authority).)
The
Committee is RECOMMENDED to note the main issues arising from the
presentations and to take any necessary action, if required.
10.E Summary
by the Independent Financial Adviser
11:40 The
Independent Financial Adviser will, if necessary, summarise the foregoing
reports of the Fund Managers and answer any questions from members.
(Information
Exempt in that it relates to the financial or business affairs of
any particular person (other than the authority).)
ITEMS FOLLOWING THE RE-ADMISSION
OF THE PRESS AND PUBLIC
- Update on the Pension
Fund's investment in Hedge Funds
11.55 The
Head of Finance reports that, in August 2003, the Committee resolved
that 2% of the Pension Fund’s assets be invested in hedge funds in line
with the customised benchmark. UBS Global Asset Management will manage
these assets acting on the advice of UBS Wealth Management. During January
2004 the following investments were made:
£4,800,000
UBS O’Connor Global Alpha Strategies Fund
£4,800,000
GAM Diversity 11 Fund
£1,100,000
UBS O’Connor Special Situations Fund.
A
further investment of approximately £1.3 million will be made in the
Martello Fund in March 2004 bringing the Oxfordshire Pension Fund’s
exposure to hedge funds to approximately 2%. UBS Global Asset Management
will include a hedge fund valuation report page in their future quarterly
reports. Officers and the Independent Adviser will meet UBS Wealth Management
later in 2004 to review the Hedge Fund strategy and will report back
to the Committee.
The
Committee is RECOMMENDED to note the report.
- Oxfordshire Pension Fund
Business Plan
Report by Head
of Finance (PF12).The
report sets out a recommended business plan for 2004/05, an investment
management and scheme administration budget for 2004/05 and details
on member training courses.
The Committee
is RECOMMENDED to:
(a) approve
the Oxfordshire Pension Fund Business Plan, as set out at Annex
1 to the report, for 2004/05;
(b) approve
the specific requests for additional staffing resources as set
out in paragraphs 23 and 24 of the report;
(c) approve
the Oxfordshire Pension Fund’s Investment Management and Scheme
Administration Budget, as set out in Annex 2 to the report, for
2004/05.
13. Stock Lending
Report
by Head of Finance and the Independent Financial Adviser (PF13).
12.25 In
November 2003 the Committee received a report on stock lending, which
explored the stock lending capabilities of the Fund’s custodians,
ABN AMRO Mellon, and particularly focussed on how it addressed the
areas of risk associated with stock lending. Following the extensive
changes to the composition of the Fund’s investments it was considered
prudent to ask the custodian to produce a more up to date estimate
before deciding whether to proceed.
The
new report reports an estimated annual revenue income of £40,000 for
the Oxfordshire Pension Fund, though this could prove to be a little
on the high side due to a tendency for custodians to provide overly
optimistic projections. Notwithstanding this the Committee is recommended
to request the custodian to lend stock on behalf of the Oxfordshire
Pension Fund.
The
Committee is RECOMMENDED to request the Pension Fund’s global custodian,
ABN AMRO Mellon, to lend stock on behalf of the Oxfordshire Pension
Fund.
14. Socially
Responsible Investment and Corporate Governance Issues
12:35 The
Head of Finance reports that he will report orally on issues arising
from officers’ and Fund Managers’ involvement in matters of Socially
Responsible Investment and Corporate Governance.
The Committee
is RECOMMENDED to note the report.
15. Admission
Agreements
Report by Head of
Finance (PF15)
12.45 The
report updates the Committee on the recently introduced changes to
the Pension Regulations. These are of primary concern if admission
is to be considered from a private company in the event of best value
out-sourcing. The report also includes confirmation where admissions
have been signed.
In addition,
the report seeks approval for admission from the Charter Housing Association.
The
Committee is RECOMMENDED to:
(a) approve
the application of Charter Community Housing Association subject
to all parties agreeing to the terms of the admission;
(b) note
the changes to the regulations and confirm that applications from
Community Admission bodies should provide their service within
the County Boundaries; and
(c) note
the information about the signing of the agreements for the Oxford
Night Shelter and Elmore Community Services.
16. Oxfordshire Pension
Fund Administration Best Value Review
Report by Head
of Finance and addenda submitted to the Best Value Committee on 14
January 2004 (PF16).
12.55 The
Best Value Committee agreed to:
- consider a report
on further progress in one year and thank the Pensions Team for their
work;
- confirm that
there were no matters in the report which should be drawn to the attention
of the Executive Member; and
refer the
report to the Pension Fund Committee.
The report
updates on the implementation of the best value action points.
The Committee
is RECOMMENDED to consider the report and whether any action needs
to be taken.
- Annual Forum
13.10 The
Head of Finance will report on any relevant issues arising from the last
Annual Forum.
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