EXCLUSIVE: Leaked minutes of Merseyside Pension Fund’s Investment Monitoring Working Party

EXCLUSIVE: Leaked minutes of Merseyside Pension Fund’s Investment Monitoring Working Party                                                                Please accept YouTube cookies to play this video. By accepting you will be accessing content from YouTube, a service provided by an external third party. YouTube privacy policy If you accept this notice, your choice will be saved and the page will refresh. … Continue reading “EXCLUSIVE: Leaked minutes of Merseyside Pension Fund’s Investment Monitoring Working Party”

EXCLUSIVE: Leaked minutes of Merseyside Pension Fund’s Investment Monitoring Working Party

                                                              

Pensions Committee (Merseyside Pension Fund) 16th November 2015 L to R Peter Wallach, Cllr Paul Doughty (Chair)
Pensions Committee (Merseyside Pension Fund) 16th November 2015 L to R Peter Wallach, Cllr Paul Doughty (Chair)

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The public meeting of Wirral Council’s Pensions Committee held on the 16th November 2015

I will start this piece by declaring that I have a close family relative paid a pension by the Merseyside Pension Fund.

Monday night’s public meeting of Wirral Council’s Pensions Committee (you can view the video above) chucked out the public for two agenda items (issues about the tender exercise for CB Richard Ellis Capital Advisers Ltd (CBRE) and the minutes of the Investment Monitoring Working Party meeting of the 17th September 2015 and the 8th October 2015.

Originally one of the governance policies agreed by councillors that run the Merseyside Pension Fund stated that minutes of the Investment Monitoring Working Party and Governance Working Party should be published. I did query a while back why they weren’t, which led to the situation now where the minutes are split on the agenda and the public gets to see which councillors turned up, who sent their apologies and what the declarations of interest are.

However the rest of the minutes of those meetings (despite it being councillors that sit on these committees), councillors decide to keep the rest of the minutes a secret (on the advice of Wirral Council officers).

As it states on Wirral Council’s website the law states “Information is exempt to the extent that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information” and the reason given on Monday evening was “Information relating to the financial or business affairs of any particular person (including the authority holding that information)”.

Strictly speaking politicians are supposed to carry out their own public interest test based on the above and I suppose I should kick up more of a fuss at this point of the meeting if they’re about to chuck us out for no reason.

The Merseyside Pension Fund is a large pension fund with billions of pounds invested. Of course as a member of the press I’m going to take a view that it’s wrong for the public sector to be engaging in these inappropriate levels of secrecy when the total number of people in the fund comes to over 100,000.

Actually persuading politicians to actually go against an officer recommendation on this though is probably beyond my powers of persuasion. So here is a leak instead of the Investment Monitoring Working Party minutes of 8th October 2015. Think of all the money I’ve saved Wirral Council by not making a FOI request for this (although no doubt they will now carry out another leak investigation!)

I’ve corrected Cllr Ann McLachlan’s name in section 1 which was misspelt as McLachalan.

NOT FOR PUBLICATION
By virtue of paragraph(s) 3 of Part 1 of Schedule 12A
of the Local Government Act 1972.

EXEMPT APPENDIX 2

Minutes of the Investment Monitoring Working Party,

8 October 2015

In attendance:

Councillor Ann McLachlan (WBC) (Vice Chair) Peter Wallach (Head of MPF)
Councillor Geoffrey Watt (WBC) Joe Blott (Strategic Director Transformation and Resources
Councillor Treena Johnson (WBC) Noel Mills (Independent Adviser)
Rohan Worrall (Independent Adviser)
Councillor Paulette Lapin (SC) Louise-Paul Hill (Aon Hewitt)
Emma Jones (PA to Head of Pension Fund)
 

Apologies were received from:

Councillor Paul Doughty (WBC) Councillor Brian Kenny (WBC)
Councillor Cherry Povall (WBC) Councillor George Davies (WBC)
Councillor John Fulham (SHC) Councillor Adrian Jones (WBC)
 

Declarations of Interest

 

Councillor Geoffrey Watt declared an interest due to a relation being a beneficiary of the Merseyside Pension Fund.

1. Introduction

Cllr Ann McLachlan (AM) chaired the meeting on behalf of Cllr Paul Doughty.

Action Points

None

2. External Manager Presentation

2.1 M&G Investments

Matthew Vaight (MV), Fund Manager and Orla Haughey (OH), Client Director, presented their global Emerging Markets Mandate to IMWP. Their agenda covered their mandate, market overview, a re-cap on their process, performance and finally their funding positioning.

Merseyside Pension Fund current holdings are valued at £112.8m. They briefed members on their bottom-up stock picking style and currently hold 50-70 stocks on behalf of the Fund.

A discussion ensued with regard to the risk in developed markets compared to emerging markets but MV argued that although a portfolio could remain cautious there are improving fundamentals in countries such as Taiwan for example which still offer opportunities as markets on cheaper valuations.

Specific risks of stocks and value was examined and how specific risks can be stock specific rather than country specific. However the sharp currency devaluations in some markets such as Brazil and Russia over the past 12 months had hit the fund’s performance where stock fundamentals had been overridden by the market’s performance. Oil prices were discussed and how this affected the markets. To further mitigate risks M&G said they have also developed a framework to look at currency which will further aid stock selection.

Questions were raised with regard to governance and M&G clarified how they work with particular companies and examine management within the organisation closely.

Ethical investments were discussed and M&G clarified they have no exposure in tobacco products or defence. M&G explained their view is that good corporate governance is an indication of quality management and is a good indicator of how a company is run. It combined to make an attractive investment and is integral to their analysis of a company.

Action points

None.

3. External Manager Presentation part 2

3.1 Maple-Brown Abbott

Geoff Bazzan (GB), Head of Asia Pacific Equities, and Susan Douse (SD), European Marketing and Client Services, presented at IMWP an overview of their organisation. They spoke about their value style and investment process and philosophy. They looked at their total performance up to 31 August 2015 and the major contributors and detractors during that period.

A discussion ensued with regard to their cyclical turn down and the classic value trap over the long term. The Chinese economy was discussed and the fact that GB believes there is still opportunities in China but be wary of companies exposed to too much US debt.

Maple-Brown Abbott’s asset allocation and in particular their specific stock selection was debated and how this has impacted on performance. GB asserted that there has been a slight improvement in performance and hopes to see this improving in the future. GB expressed the view that exposure of Chinese stocks will improve.

Maple-Brown Abbott were asked about their ethical investments and it was asserted that restrictions are imposed on companies but in the broader portfolio they do not screen out but look at the sustainability over the long term and subsequently ethical questions come into play.

Action points

None.

External Manager Presentation part 3

4.1 Amundi

Mickaël Tricot (MT), Head of Emerging Markets Equities and Peter Brackets (PB) presented the Amundi Actions Emergent Team, Process and Portfolio Review to the IMWP. MT gave Merseyside’s portfolio’s investment summary and talked about the team structure and its resources. MT explained that they combined a top-down and bottom-up featured approach which supported a high quality stock selection process which was well suited for emerging markets with higher volatility.

Ethical investments were discussed and MT asserted this was very subjective but they coupled this with knowing the companies and looking carefully at aspects of the organisation thoroughly. MT explained that although aspects of ethical investments were not mandatory, companies were coming under pressure from the stock exchange to comply with guidelines. This was becoming very important and companies are finding it beneficial to conform.

The question of how the stock exchange can apply pressure was discussed and it was stressed that there was a common current exchange of disclosure and reporting which raises issues when concerns are expressed. It was also argued that collaboration and initiatives within global firms have a consistent framework which can put pressure on managers to comply. There are also the UN PRI principles which encourage disclosure.

Amundi’s exposure in Brazil and currencies was discussed and value versus growth was debated further. Amundi noted they were always looking at changing their approach to look at more complex valuations by using supplementary tools and databases to help with analysis.

Action points

None.

5.

5.1 Noting items

None

5.2 Action Points

None

5.3 Summary of Recommendations

None

5.4 Discussion Points (including any other business)

None

Date of Next Meeting

Thursday 10 December 2015 at 10.00 am, 6th floor, Cunard Building.

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Economy and Regeneration Overview and Scrutiny Committee 7th November 2011 Part 4 Invest Wirral, Wirral Direct, jobs, investment, planning, vetting

Paula Basnett said that since 1993 (Invest Wirral had formerly been called Wirral Direct), it had been involved with 941 investment projects and sixteen thousand jobs had been created or safeguarded.

In 2010/11 Invest Wirral had been involved with £13 million of investment covering 652 jobs, had an average of engaging with 800 companies a year and in the last three years had helped with £50 million of investment covering 3,000 jobs.

She finished by giving the contact details for Invest Wirral which were invest@wirral.gov.uk, telephone 650 6915 and their website.

Cllr Denise Realey asked if they helped fund planning applications?

Paula Basnett said they didn’t reduce planning fees, but they could help businesses attract business rate relief on their business rates.

Cllr Denise Realey asked about the over 2,000 businesses registered on the website. She asked how they check they do good work, had they been into every business or did they just rely on the information the businesses had given? What would they do if the businesses were not doing a good job? How did they check these businesses out?

Paula Basnett said they ask for turnover, contracts and employees. If they are receiving support they measure this over six months and twelve months to see how it’s changed.

Cllr Realey asked again if any of the businesses work was actually checked.

Paula Basnett replied that for businesses that just register, they don’t vet them for the online forum as they’re not Trading Standards.

Cathcart Street Primary School – Cabinet will decide on £1.8 million investment next Thursday

It’s always good to have a good news story about matters in Bidston & St. James. Next Thursday at Wallasey Town Hall Wirral’s Cabinet, made up of Liberal Democrat and Conservative councillors will decide whether to spend £1.8 million on Cathcart Street Primary School.

As reported on this blog last year the decision to close nearby Cole Street Primary School will mean some of its pupils will be joining Cathcart Street Primary School.

A detailed Scheme and Estimate Report, picture of what the proposed changes will look like, compared to the current building, existing floor plan and proposed altered floor plan are all available to view by following these links.

If approved next Thursday and agreed by the Planning Committee (or planning officers), work will start in May and (hopefully) be complete by the time of the next school year in September. Due to the closure of nearby St. Laurence’s Primary School, if this scheme is agreed the existing Children’s Centre at St. Laurence’s will be relocated to the Cathcart Primary School site. This scheme includes:-

  • Alterations and small extensions to improve the pupil toilet and cloakroom provision
  • Dry lining the existing internal walls to conceal the exposed brickwork and block-work and to improve acoustic properties
  • Alterations to the internal room layout to provide practical resource areas adjacent to classrooms and to improve internal circulation
  • Provision of a hygiene room for pupils with disabilities
  • Improved office and reception facilities and a new entrance area
  • Refurbishment of all toilet provision for both pupils and staff
  • Redecoration and new floor finishes throughout
  • Replacement of the existing high level clerestory windows
  • Complete replacement of the roof covering with improved insulation levels to reduce heat loss
  • A secure external covered play area adjacent to the Foundation classrooms
  • Replacement boilers and heat emitters
  • Additional classroom ventilation
  • New energy efficient lighting
  • New fire and intruder alarms
  • CCTV security system
  • New fencing throughout to improve the security and appearance of the site

In yet another good news story for Cathcart Street, Lib Dem MPs in government have agreed to give schools an extra £430/year for every child on free school meals and those in foster care or who have been adopted. This extra money, which will go directly to schools will mean over £5 million extra money being spent across Wirral helping schools such as Cathcart Street and other schools in Bidston & St. James.

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