Apologies were received from Councillor Martin who was substituted by Councillor Mathias.

To receive any declarations of interest from Committee members, in matters appearing on the agenda.

No declarations were received

To approve the minutes of the previous meeting, held on 28 September 2010.

The minutes of the meeting held on 28 September 2010 were agreed as a correct record and the Chair authorised to sign them.

To report performance, investment activity and the latest portfolio valuation.

The Committee received a report of the Director of Finance and Corporate Services the purpose of which was to report the performance, investment activity and the latest portfolio valuation.

It was RESOLVED that the report be noted.

To consider a paper prepared by the Council’s investment advisors, Hymans Robertson, regarding possible alternative asset classes.

The Committee received a report of the Director of Finance and Corporate Resources, the purpose of which was to receive the fund managers quarterly reports and approve the proposed investment policies contained therein.

No fund manager’s presentation was heard at the meeting but the fund’s investment advisor from Hymans Robertson gave a short commentary on market background.

The Committee heard that the rebalancing transactions carried out to raise the level of the property portfolio had meant that the fund was now close to being in line with the benchmark and no further rebalancing transactions were required.  Going forward, a divergence in the property weighting of +/-2% (from the central weighting) would trigger a discussion with the Committee and 4% would trigger immediate action.

In response to questions it was noted that the Committee had last implemented a revised fund benchmark in December 2008 (coinciding with the appointment of L&G as fund managers).

It was RESOLVED:

1.      That the reports of Henderson and L&G be noted.

2.      That Henderson’s and L&G’s investment policies be approved.

3.      That in future, notwithstanding the extent of the maximum permitted range around the central property benchmark allocation, a divergence of +/- 2% would be addressed by the Committee.

The Committee received a report produced by Hymans Robertson regarding possible alternative asset classes, requested at the previous meeting.

The committee heard a presentation by Hymans Robertson describing the current structure of the fund, where property was the main diversifier.

The presentation (accompanied by printed material) considered various possibilities for increasing diversification, including: Private Equity, Hedge Funds, Active Currency, Infrastructure, Timber, Commodities and Diversified Growth Funds (the latter being a fund itself comprising a range of alternative assets as well as – potentially – equities).   

The characteristics, and potential advantages and disadvantages of the various options were discussed.

It was RESOLVED:

1.      That the Committee should at the subsequent meeting examine in further and greater detail 3 of the options considered in the initial paper, namely Diversified Growth Funds, Infrastructure and Private Equity.

2.      That the Committee should at the subsequent meeting review the current regional equity allocation, with particular attention to Emerging Markets in terms of exposure level and investment approach.

3.      That the contents of the report be noted.

To inform the Committee of the recently published interim Report for the Independent Public Service Pensions Commission and of the subsequent “call for evidence”.

The Committee received a report containing information on the recently published interim report of the Independent Public Service Pensions Commission and of the subsequent “call for evidence”.

The Committee noted the difficulty that it faced in commenting on questions of a technical nature (primarily addressed to practitioners) and also that in previous such instances the Committee had not generally commented on questions involving basic scheme design and the level of benefits provided.

It was RESOLVED that the Committee would not make representations to the call for evidence.

To inform the Committee of the recently introduced Financial Reporting Council UK Stewardship Code.

Reports of the Director of Finance and Corporate Services attached.

The Committee received a report of the Director of Finance and Corporate Services the purpose of which was to inform the committee of the recently introduced Financial Reporting Council UK Stewardship Code. 

It was RESOLVED that the contents of the report be NOTED.

The next meeting of the committee would be held on16th February 2011. 

The meeting closed at 7.30pm