Agenda item

Report of the City Treasurer.

6.1       Kevin Humpherson (Deloitte) provided an update on the performance of the Fund in the latest quarter and advised that there were no particular issues concerning any of the fund managers. He advised that the Fund had outperformed its benchmark by 0.4% for the quarter and also continued to perform above the benchmark in year and over the last 3 years. Although Majedie had underperformed this quarter, the performance of Baillie Gifford, Longview and Standard Life had more than offset this.

6.2       During Members’ discussions, the Chairman noted that Jill Davys, who currently held the position of Assistant Director, Client Management at the London Collective Investment Vehicle (CIV) was leaving her post and he asked what impact this would have on the CIV. He sought comments on the development of the CIV and why had progress being slower than anticipated. The Chairman noted that the City Council had transferred more of its funds to the London CIV than most other CIV members and expressed frustration that administering authorities did not have the option of investing in more than one investment pool. He asked whether the City Council was required to be in the London CIV and not another investment pool. Members enquired what steps could be taken to speed up progress with the CIV and whether the CIV was investing in property, housing, gas and other fossil fuels. Members commented that it had been prudent for the CIV not to invest in gilts.

6.3       In reply to the issues raised, Kevin Humpherson stated that Jill Davys had been a key figure in monitoring fund managers and her departure would be a loss to the London CIV. There had not yet been an announcement about her replacement and Deloitte would continue to monitor this situation.

6.4       Alistair Sutherland (Deloitte) stated that the London CIV had been the first investment pool for local authorities to be set up and it was disappointing that it had not made more progress compared to other investment pools. This was partly attributable to resourcing issues, whilst it was also complicated by the number of London boroughs who were CIV members and who all had equal status, which could impact upon progress. However, pressure could be placed on the CIV management team to accelerate progress. Alistair Sutherland stated that the CIV was not presently investing in property or housing, although it would have been prudent to have considered this at an earlier stage. He advised that there were some funds within the CIV that would involve assets in gas and other fossil fuels, such as those in global equities, however he felt that it was time that the CIV consider further investment in environmentally friendly assets. Alistair Sutherland stated that in theory the City Council could leave the CIV to join another investment pool if that pool accepted. Peter Worth added that that although the City Council could not independently invest in more than one investment pool, the London CIV could if it so wished invest funds in another investment pool.

6.5       Members agreed that the meeting to select the shortlist of fund managers in respect of the fixed income mandate take place on 9 November, whilst a final decision on the fund manager to manage this mandate would take place on 30 November. The Chairman added that he was meeting London CIV representatives with officers to discuss fixed income mandate options.

6.6       RESOLVED:

            That the performance of the investments and funding position be noted.