The Pension Committee of Camden Council met on Thursday, 16 July 2026, to discuss the progress of the London Collective Investment Vehicle (LCIV), review the fund's engagement activities, and assess investment performance. The committee resolved to note the LCIV progress report, the engagement report, the performance report, the business plan, and the terms of reference for the committee.

London Collective Investment Vehicle (LCIV) Progress Report

The committee received an update on the London Collective Investment Vehicle (LCIV), a pooled investment structure for local government pension funds. Saul Omuco, Head of Finance, Treasury and Pensions, explained that Camden now operates entirely within a pooling environment, with LCIV responsible for implementing the investment strategy while the council retains its fiduciary responsibility and sets the fund's strategic asset allocation. Wasil Mohar and Jacquiline Jackson from LCIV provided an overview, highlighting that LCIV manages approximately £60 billion for 34 funds and is a Financial Conduct Authority (FCA) regulated, non-profit organisation owned by its partner funds.

New regulations, effective from 30 June 2026, mandate pooling, requiring all assets to be invested through the pool, which also serves as the principal source of investment advice for strategic asset allocation. Partner funds retain responsibility for setting their strategic asset allocation, responsible investment policy, and local investment policy. LCIV confirmed its compliance with these new requirements, having established advisory capabilities.

Camden signed its Investment Management Agreement (IMA) in June, and an implementation plan for transitioning assets to the target asset allocation was being finalised. LCIV will commence full portfolio reporting for Camden from 1 July.

The LCIV's Chief Sustainability Officer outlined the organisation's responsible investment (RI) approach, where partner funds set their own RI policies, which LCIV implements. LCIV aims to be a best-in-class asset pool, acknowledging climate and ESG risks as financial risks. It is a signatory to the UN Principles for Responsible Investment and the Task Force on Climate-Related Financial Disclosures (TCFD) and Task Force on Nature-Related Financial Disclosures (TNFD).

In response to government guidance on investments linked to conflict-affected areas, LCIV developed a Responsible Investment (RI) Matrix. This matrix has three pillars:

• Pillar 1: Exclusions on controversial weapons (0% threshold) and non-conventional fossil fuel extraction (5% revenue exclusion).
• Pillar 2: Includes Pillar 1 restrictions plus controversial areas (e.g., adult entertainment, gambling, predatory lending) with a 5% revenue exclusion, and companies flagged by Morgan Stanley Capital International (MSCI) for breaching global norms and human rights standards.
• Pillar 3: Includes Pillar 1 and 2 restrictions plus a 5% revenue exclusion on weapons and excluded companies on the United Nations Office of the High Commissioner for Human Rights (UN OHCHR) list operating within or benefiting from illegal settlements in occupied Palestinian territories.

LCIV highlighted engagement work with companies like Microsoft, where discussions on human rights issues had led to changes in company practices and increased due diligence.

Committee members raised concerns about potential government mandates weakening ethical investment policies. The Treasury and Pensions Fund Manager clarified that while frequent changes to the Investment Strategy Statement (ISS) and RI policy were not advisable operationally, regulations did not prevent further review, and the consultation process would involve members. Concerns about pooling potentially reducing agility and independence were acknowledged, but LCIV stated that its broad product range offered sufficient optionality for partner funds to reflect their preferences, and the Independent Advisor noted the significant benefits of scale and cost savings for members.

The committee resolved to note the London CIV Report.

Engagement Report

The committee received an update on engagement activities undertaken by the fund and on its behalf by the Local Authority Pension Fund Forum (LAPFF). The Head of Finance, Treasury and Pensions highlighted LAPFF's role in representing 87 funds globally on ESG issues, emphasising its broad influence. Key areas of focus for the quarter included climate change (engaging with retailers on food and agriculture), environmental stewardship (including water companies), employment standards and workers' rights, and broader human rights and governance issues.

In response to a committee member's request for more detail on tangible changes resulting from LAPFF's engagement, officers agreed to ensure future reports included specific case studies. The Chair enquired about LAPFF's continuing role alongside pooling and Camden's structured engagement with LCIV. The Head of Finance, Treasury and Pensions confirmed continued engagement with LAPFF, noting its broader scale across all pools, which complements LCIV's direct engagement. A committee member commented on the value of direct engagement meetings with companies through LAPFF and encouraged members to participate if time allowed.

The committee resolved to note the Engagement Report.

Performance Report

The committee reviewed the fund's investment performance report for the quarter ended 31 March 2026. The Treasury and Pensions Fund Manager noted that despite a challenging market environment, the fund remained resilient, with global equities slightly negative, while bonds, commodities, and Asian equities performed strongly. The fund's value reduced by approximately 1%, which was broadly in line with expectations. Portfolio changes reflected previous committee decisions, including the exit from Harris, redemption of the Baillie Gifford Diversified Growth Fund, and initial investment into the LCIV Global Equity Value Fund. The fund continued to outperform the PIRC local authority Universe over the quarter, one year (10.9% vs 10%), and three years (8% annualised vs 7%).

Karen Shackleton, the Independent Advisor, provided a detailed overview of each manager's performance, assigning ratings (red, amber, green). Baillie Gifford received an amber rating due to underperformance against its growth index and significant lag over three years. Legal and General (passive funds) received a green rating, although its sustainable strategy slightly underperformed the full market cap index in the quarter. London CIV's property portfolio (CBRE) was amber (borderline green), showing improvement despite trailing its three-year target. Partners Group (global property) received a firm amber rating due to liquidity challenges and negative internal rate of return (IRRs) in some funds. HarbourVest (global private equity) was amber, with performance needing to improve. The London CIV Multi-Asset Credit Fund was amber, with recent performance impacting longer-term returns. The Infrastructure Fund (Stepstone) received a green rating, with solid returns since inception and over 50% invested in renewables. The Real Estate Long Income Fund (Aviva) was amber, with a negative IRR and diversification concerns (heavy hotel allocation). The UK Housing Fund (London CIV) was amber, with the Independent Advisor raising concerns about a lack of diversification and slow capital deployment.

During discussions, officers confirmed that high cash holdings reflected proceeds from exiting Harris and the Diversified Growth Fund redemption, and this cash would be reinvested in line with the investment strategy. Manager meetings for Baillie Gifford and the LCIV Housing Fund were scheduled for the next quarter due to their performance concerns. LCIV explained that the poor performance of specific housing fund investments reflected early-stage investment costs, the J-curve effect in private market investments, and challenging property market conditions and higher interest rates. The Independent Advisor noted that local investments could carry additional risks and advised diversification across housing, infrastructure, renewable energy, and business lending, cautioning against concentrating investments too narrowly in Camden due to fiduciary responsibilities.

The committee resolved to note the Performance Report.

Business Plan

The committee considered the Business Plan report, which outlined future reports for the committee, including standard quarterly reports. Members were informed that policy decision reports, such as the training policy, were deferred to the next quarter to allow new members to acclimatise. The report also updated on the Pension Board, which oversees governance arrangements and meets twice a year.

The committee resolved to note the report.

Terms of Reference of the Pension Committee

The Treasury and Pensions Fund Manager advised that new government pension pooling regulations, effective from 30 June 2026, required an update to the committee's Terms of Reference to reflect new pooling arrangements and statutory guidance. Members were asked to note the current Terms of Reference in the interim. The committee resolved to note the Terms of Reference.

Declarations of Interest

Councillor Djemai declared that she was a Council employee from November 2019 to February 2022 and, to her knowledge, did not have any active pension. Councillors Slater and Russell declared that they were members of the Local Government Pension Scheme (LGPS). The Deputy Borough Solicitor advised that while joining the LGPS was not a disclosable pecuniary interest, it was considered good practice to declare it.

Other Announcements

The Chair welcomed Councillor Adams, who was appointed to the committee on 13 July 2026, replacing Councillor Stark. The attendance of Hamilton Daly, Senior Solicitor, was also noted.