The Pensions Committee of Lincolnshire County Council met on Thursday 10 September 2026 to discuss market updates, stewardship activities, the investment strategy statement, and asset pooling progress. The committee considered the amended Investment Strategy Statement and noted the progress made in asset pooling.

Independent Advisor's Market Update Report Q1 2026/27

The committee received an update on the global investment markets for the first quarter of the financial year 2026/27, covering April to June 2026. Paul Watson, the Independent Advisor, reported that global equities rebounded strongly, returning approximately 14% in sterling terms, largely driven by de-escalation in the Middle East and falling oil prices, which improved investor sentiment. Emerging market equities generally outperformed their developed counterparts. UK gilts experienced pressure in April due to higher energy prices and political uncertainty, but yields later retraced. Markets were largely unaffected by Prime Minister Starmer's resignation, with expectations of an orderly transition supporting market confidence. Since the end of June, the investment environment has remained resilient with modest equity returns, supported by continued investor confidence in earnings growth. However, there has been renewed uncertainty in the Middle East. UK gilt yields surged to multi-year highs, but the UK gilt market remains sensitive to news surrounding the upcoming budget. Overall, the quarter was positive for investors, with strong equity returns through to the end of June, which have remained resilient since then.

Stewardship Update Report

Claire Machej, Accounting, Investment and Governance Manager, presented an update on the fund's stewardship activity during the first quarter of the financial year 2026/27. The report detailed engagement activities undertaken by the Local Authority Pension Fund Forum (LAPFF), Border to Coast Pensions Partnership, and other external managers. LAPFF continued its engagement with companies on issues such as climate mitigation, food security, and the banking sector's management of climate-related risks. Border to Coast's stewardship report highlighted voting activities, with key themes including AI governance, climate commitments, and board accountability. The report also detailed ESG and carbon reporting for Border to Coast's sub-funds. Councillor Martin John Hill OBE raised concerns about potential duplication of work between LAPFF and Border to Coast, suggesting a review of LAPFF membership. Jo Kempton, Head of the Lincolnshire Pension Fund, confirmed that this was an active discussion within partner funds and that a paper would be brought to the December committee meeting to outline future directions.

Investment Strategy Statement

Jo Kempton presented the amended Investment Strategy Statement (ISS) for consideration. The statement had been updated following the publication of final regulations and statutory guidance, and after consultation with key stakeholders. The Greater Lincolnshire Combined County Authority (GLCCA) had raised a question about whether the fund should set high-level impacts for local investments. This had been discussed previously, with the committee deciding to revisit it once Border to Coast had fully developed its capabilities in this area. The committee was asked to consider if this stance remained appropriate. Councillor Condell, Chair of the committee, expressed satisfaction with the current ISS, stating that it would not prevent local investment opportunities if they offered safe, good returns. Councillor Hill supported this view, noting that the GLCCA was still in a development phase. A scheme member representative inquired about when local investment might come to fruition, particularly regarding housing. Jo Kempton indicated that more clarity on local investment was expected within the next 12 months and that an update would be provided at the next investment meeting. The committee considered the amended ISS.

Asset Pooling Update Report

Jo Kempton also provided an update on progress with asset pooling following the Pension Schemes Act 2026. The report highlighted that Border to Coast had made significant progress in preparing for the new regulatory environment, with 91% of partner fund assets already pooled or forecast to be under pool management. The integration of seven new partner funds and the transition of remaining assets were underway. Border to Coast was also developing the necessary advisory and investment management services. The committee discussed the evolution of the investment implementation model, the strengthening of governance and oversight arrangements, and the 2030 Customer Strategy. Councillor Martin John Hill OBE raised concerns about the effectiveness of a committee of 18 partner funds and the potential for duplication of effort. Jo Kempton explained that work was being done to ensure all funds had an equal voice and that working groups were being established to manage detailed tasks. The committee considered the report.

The meeting also included the appointment of Councillor Philip Roberts as Vice Chair for the meeting and the confirmation of minutes from the previous meeting. The committee then moved to consider exempt information for several agenda items.