Agenda item

A detailed report on the transactions undertaken to demonstrate the implementation of the Investment Advice recommendations and the Fund's valuation was included, as well as a report on the treasury management of the Fund's cash balances and the latest Forward Investment Programme.

The Fund continued to favour growth assets over protection assets. For the period under discussion, bonds were still not considered value for the Fund and the Fund had no investments in Bonds at this time.

The cash level at the end of March 2024 was 3.63%. Investment in direct property where the property had a good covenant, yield and lease terms would continue.  There were no purchases or sales in the quarter.

Investment in Alternatives, such as infrastructure and private equity, offered the Fund diversification from equities and bonds. They came with additional risks of being illiquid, traditionally had costly management fees and investing capital could be a slow process. An amount of £70 million was invested in the quarter.

It was a requirement that all transactions undertaken were reported to the Committee. Appendix A to the submitted report detailed transactions for the period 1 October 2023 – 31 March 2024. This was a six monthly report rather than the usual three monthly report.  There were net purchases of £8 million in the period.

As at 31 March 2024, the Fund had £198 million invested with approved counterparties. This was a decrease of £23 million over the last quarter.

The graph at Appendix B to the submitted report showed the maturity profile of cash invested as well as the average rate of interest obtained on the investments for each time period.

The Fund Valuation detailed all the investments of the Fund as at 31 March 2024, and was prepared by the Fund's custodian, Northern Trust. The total value of all investments, including cash, was £5,468 million. The detailed valuation was attached at Appendix C to the submitted report and was also available on the Fund’s website www.teespen.org.uk. This compared with the last reported valuation, as at 31 December 2023 of £5,194 million.

A summary analysis of the valuation showed the Fund’s percentage weightings in the various asset classes as at 31 March 2024 compared with the Fund’s customised benchmark.

As at 31 March 2024 the Fund’s equity weighting was 60.92% compared to 60.83% at the end of December 2023.

Redemptions of £140 million in total were made from the Border to Coast UK and Overseas Developed Market Equity Funds.  A summary of equity returns for the quarter 1 January 2024-31 March 2024 were shown at paragraph 8.4 of the submitted report.

The Fund had no investments in bonds at this time and the level of cash invested was 3.63%.

As at 30 November 2023 total commitments to private equity, infrastructure, other alternatives and other debt were £1,963 million and details were provided at paragraph 8.8 of the submitted report.

The Head of Pensions Governance and Investment informed the Committee that he and the Chair had recently attended a launch event for FW Capital.  Over one hundred representatives from local businesses and financial institutions had also attended. 

ORDERED that the information provided was received and noted.