Agenda item

Report attached.

Officers advised the Committee that the net return on the Fund’s investments for the quarter to 31 December 2014 was 3.7%. This represented an out performance of 0.3% against the combined tactical benchmark and an under performance of -7.1% against the strategic benchmark.

The overall net return for the year to 31 December 2014 was 9.7%. This represented an out performance of 0.4% against the tactical combined benchmark and an out performance of -15.1% against the annual strategic benchmark.

Officers  updated the Committee that they had been approached by Ruffer for permission to invest 5% of the Ruffer’s portfolio in a product designed to protect against risk of liquidity in the credit market. Having consulted Hymans, Officers approached the Chairman seeking his approval as the decision had to be made before the next committee meeting. The Chairman had given his permission to proceed with the investment..

1.    Hymans Robertson (HR)

Market Summary

·         Hymans Robertson updated the Committee with a roundup of the market background as at the end of December.

Fund Performance

·         Assets were valued at £547.38m as at 31 December 2014, an increase of £18.37m over the quarter. The total return on the Fund’s assets over the quarter was 3.8%, ahead of the benchmark return of 3.2%

·         Performance from the Fund’s active equity manager, Baillie Gifford, had contributed positively to performance as the mandate outperformed its benchmark by 3.4%.

Investment Manager changes

·      There had been no changes to Fund Manager’s during the quarter. However, following the quarter end, the Fund had invested £100.75m into the GMO Global Real Return Fund. This had been phased over two dealing dates with the first tranche of £50m being invested on 13 January 2015 and the second tranche of £50.75m occurring on 20 January 2015.

2.    UBS Triton Property Fund (UBS)

Howard Meaney (HM), Head of Global Real Estate – UK (GRE – UK) and Portfolio Manager, UBS Triton Property Fund attended the meeting and gave a presentation on the performance of the UBS Triton Property Fund. The portfolio continues to perform well driven by active asset management. In the last year the Fund had out-performed its benchmark by 1.8%. HM advised the Committee of a number of projects including a new venture, student accommodation in Newcastle. He was very positive about future prospects.

3.    Royal London Asset Management (RLAM)

Paul Rayner, Head of Government Bonds and Robert Nicolson, Client Relationship Director attended the meeting to give a presentation on the performance of the Fund in Quarter 4. Despite a relatively poor performance in quarter 4 the portfolio had outperformed the benchmark over the last three and five year periods.

In the medium term RLAM remain cautious on outlook given the current economic climate, but were optimistic that their approach will continue to outperform benchmark.

4.    State Street Global Advisors (SSGA)

Chris Vogtherr, Senior Client Relationship Manager attended the meeting to give a presentation on the performance of the portfolio managed by SSGA. The portfolio had performed as required since inception.

The Committee noted the reports and presentations.