Meeting documents

Pension Fund Committee
Friday, 20 February 2004

PF200204

______________________________________


________________________________

To Members of the Pension Fund Committee

Notice of Meeting

Meeting

PENSION FUND COMMITTEE

Date/Time

Friday 20 February 2004 at 10.00 am

Place

County Hall, Oxford

Contact officer

Marion Holyman
(Tel: 01865 810177; E-mail)


Chris Impey
Assistant Chief Executive

12 February 2004

Membership

Chairman – Councillor C.H. Shouler

Councillors:

Richard Farrell

Neville F. Harris

Brian Hodgson

Brian L. Hook

Jim Moley

 

Co-opted Members:

Michael Howes

Bob Price

 


AGENDA

  1. Apologies for Absence and Temporary Appointments

  2. Declarations of Interest

  3. Minutes

    4. 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.

  4. Petitions and Public Address

  5. 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:

      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.

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.

    1. 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

  1. Update on the Pension Fund's investment in Hedge Funds

    2. 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.

  2. Oxfordshire Pension Fund Business Plan

    3. 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:

    1. consider a report on further progress in one year and thank the Pensions Team for their work;
    2. 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.

  1. Annual Forum

13.10 The Head of Finance will report on any relevant issues arising from the last Annual Forum.



Return to TOP