ITEM PF17
PENSIONS FUND COMMITTEE – 28 MAY 2008
APPOINMENT OF AN INDEPENDENT FINANCIAL ADVISER
Report by the Assistant Chief Executive & Chief Finance Officer.
Introduction
1. At the December 2007 Pension Fund Committee meeting, officers were instructed to go out to tender for the appointment of an Independent Financial Adviser (IFA). This report considers the appointment process.
2. The Committee also agreed to continue to employ Mr Bushell in the position of IFA during the tender and appointment process. It was suggested that, subject to the outcome of the process, Mr Bushell should be asked to work alongside a new adviser for a brief period of time to enable a smooth transition. Mr Bushell’s contract has been extended until November 2008.
Tasks
3. The proposed tasks for the Independent Financial Adviser are:
(a) Attend the quarterly held Pension Fund Committee Meetings, providing views on the markets and how this impacts on the Oxfordshire Fund. The IFA will be asked to comment on the Fund Managers’ strategies and performance and where necessary highlight areas where the Committee’s attention should be focussed.
(b) Attend the annually held Pension Fund Investment Forum and give a presentation reviewing the markets and the future outlook.
(c) Attend regular 6 monthly meetings with investment managers and when requested by the Head of Finance & Procurement, attend other meetings with investment managers, the Global Custodian, limited partners or any other third party where independent financial advice is deemed necessary.
(d) Advise the Pension Fund on overall investment policy and write an annual report to the Pension Fund Committee reviewing the strategic asset allocation.
(e) Write the investment and market review to be included in the Pension Fund’s Annual Report and Accounts. This would be no more than two sides of A4 narrative.
(f) The Pension Fund’s Private Equity Investment Portfolio includes a dozen or so quoted private equity investment trusts. The IFA will be responsible for managing these and dealing when necessary. The IFA will be assisted in this task by UBS Investment Banking who will provide investment trust research papers and access to their Market Analysts.
(g) Assist where requested in manager searches and other Fund procurement exercises.
4. With the exception of g), all these tasks follow a regular pattern and an assessment can be made of the time commitment required. Task g) will by its nature be variable from year to year and in terms of time commitment. As a consequence it is proposed that fixed price tenders are requested for all tasks except g) and that a daily rate is quoted for work associated with tasks falling into this latter category.
5. The process will be carried out in accordance with the Council’s Contract Procedure Rules. It is proposed that the contract is for five years with a three month termination clause for both parties.
The Process
6. It is proposed that an advert is placed in the Financial Times. Interested parties will be provided with a job specification along with other relevant information about the IFA role. We will also provide the strategic allocation of Pension Fund Investments and details of any specific investments that are pertinent, e.g. private equity holdings. Those that are interested will be asked to provide a cv and other relevant information.
7. A selection panel is proposed comprising:
· Two members of the Pensions Committee, · Mr Bushell, the current IFA · Tony Wheeler, Pension Fund Investment Manager · Paul Gerrish, Assistant Head of Finance
8. The panel will draw up a shortlist of candidates for interview based on their cv’s and other information supplied. Whilst the price tendered is a factor, the most important aspect is engaging an adviser that has the necessary knowledge and investment management experience, as well as having the confidence of the Committee.
Timetable
9. It is difficult to be precise about a timetable for the process. However, I propose the following as a guideline:
10. The commencement of the appointment will clearly be subject to agreement with the successful candidate. Starting in September will provide the opportunity for the new adviser to initially work alongside Mr Bushell to facilitate a smooth transition.
RECOMMENDATIONS
11. The Committee is RECOMMENDED to:
(a) endorse the proposed arrangements for appointing an Independent Financial Adviser; and
(b) consider which members of the Committee should be represented on the appointment panel.
SUE SCANE Assistant Chief Executive & Chief Finance Officer.
Contact Officer: Paul Gerrish, Assistant Head of Finance Tel: (01865) 815287
May 2008
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