Issue - meetings

Staffordshire Pension Fund Investment Performance 2020/21

Meeting: 24/09/2021 - Pensions Committee (Item 4)

4 Staffordshire Pension Fund Investment Performance 2020/21 pdf icon PDF 1 MB

Presentation by Portfolio Evaluation Limited

Minutes:

The Committee received a presentation from Nick Kent of Portfolio Evaluation Limited (PEL) giving an overview of the performance of the Staffordshire Pension Fund for the period ending 31 March 2021.  The key points arising from the presentation were as follows:

 

  • The Fund has outperformed its benchmark for the year ended June 2021.

 

  • The Fund has outperformed the PE LGPS Information Service average return over the one, three, five year, ten and twenty year periods.

 

  • The positives impacting the Fund were primarily:

 

§  Private Equity (very strong performer in 2020/21)

§  Private Debt

§  The active global equity mandates of

§  JPMorgan – sector and stock selection

§  Longview – stock selection

§  LGPS Central Global Equity sub-fund – due to Harris and their value style and stock selection.

 

§The negative contributors were:

 

§  Property

§  Infrastructure (minimal investment to date but no material impact on the Fund)

§  Cash (the Fund remains overweight cash, which is a relatively low performing asset class)

 

  • The Fund continues to transition assets to LGPSC Central due to Pooling.

 

  • Total risk remains low and active risk is at a level that is consistent with the structure of the Fund. Risk has increased over the year due to the impact of the pandemic.

 

In response to a question from Cllr Greatorex concerning the Fund’s investment principles, Mr Kent indicated that although his presentation looked back at the performance of the Fund, it showed investment styles, where investments were held and the attitude to risk, and that these factors could be analysed against the Fund’s investment principals.

 

In response to a question from the Director for Corporate Services regarding the various investments held by the Fund and whether there was anything “missing”, Mr Kent indicated that, in his opinion, the Fund was under-invested in infrastructure, although the Fund has begun to invest in this asset class recently.

 

Cllr Greatorex referred to LGPS Pooling and enquired about the validity of the data on manager performance over a 20-year period.  In response, Mr Kent indicated that even though Pooling was relatively recent, PE held data on the historic performance of Fund Managers within Pools.

 

Cllr Sutherland referred to the Key Questions contained in Mr Kent’s presentation (i.e. has the Fund and the portfolios met their objectives; and is the Fund and its portfolios being managed as expected) and enquired as to whether Mr Kent felt that the answer to both of those questions was “yes”.  In response, Mr Kent confirmed that he believed that to be the case.

 

Cllr Sutherland also enquired as to how long the Fund would need to wait before it saw positive returns from its investments in Infrastructure.  In response, Mr Kent indicated that it was normal to start seeing positive returns after a period of three to four years.

 

RESOLVED – That Mr Kent be thanked for his presentation.