Issue - meetings
PRESENTATION: LONDON CIV - GOVERNANCE ARRANGEMENT UPDATE
Meeting: 20/06/2019 - Pensions Committee (Item 8)
8 LONDON COLLECTIVE INVESTMENT VEHICLE (CIV) PDF 673 KB
To receive a report that outlines London Collective Investment Vehicle (CIV)
Additional documents:
Minutes:
The Committee received a report that provided an update and background information into the Pooling arrangements and also London CIV Pool. The main points of the report considered may be summarised as follows:
The Committee noted that:
· The UK’s 89 Local Government Pension Schemes (LGPS) have finalised their asset-pooling plans by having eight regulated fund management entities to run almost all of the LGPS assets, leaving individual funds to decide asset allocation and focus on other areas of pension scheme management.
· The London CIV of which the Fund is a member sought agreement from shareholders to extend the scope of the Company’s business activities, in order to reflect the broader understanding of pooling. It has now proposed to define the purpose of the Company as an FCA company rather than the FCA authorised operator of an ACS. This would mean that the scope of the Company’s business would be consistent with the evolving expectations of a LGPS pooling company and allow it to be sufficiently flexible to add value and meet pooling objectives. The change discussed at the LCIV Shareholder Committee in December 2018 prior to approval at the General meeting of Shareholders on 31 January 2019 requires shareholders’ approval in writing and the LCIV sent the proposed change letter to all shareholders.
RESOLVED to:
- Note the contents of the report; and
- Approve London CIV variation of business activity
Meeting: 19/07/2018 - Pension Board (Item 7)
PRESENTATION LONDON CIV - GOVERNANCE ARRANGEMENT UPDATE
Minutes:
Kevin Cullen, Client Relations Director, London CIV gave a presentation which detailed the works of the London CIV since November 2017. The Board was reminded that Mr Cullen had attended their meeting in November. The following was noted during a question and answer session.
• The LCIV has £16bn AUM and this total includes passive assets. A total of £7bn is based on the ACS Platform and is insulated; £9bn is with passive Managers (LGIM, Blackrock etc.). The Board was advised that beneficial rates were obtained and that the large Investment life vehicles were prevented from being part of the ACS due to legal reasons.
• That 30 London Boroughs (LBs) had pooled and an additional LB was to join at the end of July and that the City of London was to make their first Investment.
• At present over 40% of London’s assets are now pooled and that the London Boroughs of Merton, Hackney, Waltham Forest and Croydon had agreed to pool for the first time. The Board was advised that it would be beneficial for the Fund if all the London Boroughs pooled.
• Three new sub fund were launched in 2018 and this included Equity Fund Strategy and MAC. The First Fixed Income Fund was launched on 1 June 2018. Members were advised that a Working Group was set up before the Fund was launched and that the Group was used to gauge the views of Fund Members on what type of products were preferred.
• LCIV was currently considering their future targets and were viewing markets and vehicles. There will be meetings to ensure that the rights products are chosen. Infrastructure is currently being reviewed.
• That the cost of administrating the LCIV was lower than the gains derived from the AUM and that an increase in the latter would help to further reduce levies.
• That LCIV was seeking to obtain inflation protection for investments. The Board queried whether the above should also be undertaken for ESGs and were advised that this was dependent on the requirements and that it would involve reviewing funding strategies.
• Members noted that they had expressed concerns over the governance arrangement of LCIV in particular with the lack of independence of the Remuneration Committee and the Audit Committee and questioned whether this issue had been raised. Mr Cullen advised that the LCIV will be approached about the above topic and that the Board will be advised of the response.
• The LCIV was undergoing a staff restructure and that there had been a number of appointments made. It was anticipated that current vacancies will be filled in the autumn. The Board noted that the Chief Investment Officer Post remained vacant and was advised that this work area was currently being covered by the Chief Executive. A permanent appointment to the Chief Executive post will be made after autumn.
• Members raised concerns over the lack of BME representation on the Shareholders Committee and commented that the Body should ... view the full minutes text for item 7