The Teesside Pension Fund Committee was scheduled to consider its investment performance and strategy, including updates on market conditions and the fund's asset allocation. The committee was also scheduled to review its training and risk management procedures.

Investment Activity Report

The committee was scheduled to receive an update on the Teesside Pension Fund's investment and treasury activity for the quarter ending 30 June 2026. The report indicated that the total value of investments, including cash, was £6,684 million. The fund's strategic asset allocation was reported to be within tolerance levels. The report detailed transactions undertaken during the period, showing net sales of £32.7 million. It also provided an overview of treasury management, noting that as of 30 June 2026, £514.3 million was invested with approved counterparties, an increase of £58.5 million from the previous quarter. The fund valuation as at 30 June 2026 was £6,684 million, an increase from £6,141 million at 31 March 2026. The report outlined the fund's strategic asset allocation targets, with a long-term target of 70% in growth assets and 30% in protection assets. Specific allocations were scheduled to include UK Equities (10%), Overseas Equities (45%), Private Equity (15%), Bonds/Other debt/Cash (10%), Property (10%), and Infrastructure (10%). The report also detailed equity returns for the quarter, with BCPP UK showing a 5.85% return, BCPP Overseas at 19.29%, and BCPP Emerging Markets at 17.62%. The fund had no investments in bonds at that time, with cash levels at 7.75%. The report also covered local investments, including the Ethical Housing Company, Waste Knot, and FW Capital, and outlined commitments to alternatives such as private equity and infrastructure.

Border to Coast Presentations

The committee was scheduled to receive presentations from Border to Coast, focusing on fixed income and a quarterly update.

Fixed Income Mandates

The presentation on fixed income was scheduled to cover fixed income as a portfolio building block, the Sterling Index Linked Bond Fund, and the Sterling Investment Grade Credit Fund. The Fixed Income as a Portfolio Building Block section was scheduled to discuss the characteristics of equities versus fixed income, including their sources of return, cashflow predictability, behaviour in weak markets, suitability for funding and liquidity management, and expected long-term returns. It was also scheduled to present average annual returns for global equity and global fixed income over the previous five years, and recent fixed income trends, noting higher available yields but not due to inflation risk, and that high-quality credit was close to fair value.

The Sterling Index Linked Bond Fund section was scheduled to detail its permitted instruments, benchmark, objective to outperform the benchmark by at least 0.2% per annum over rolling five-year periods, sector limits, inception date (October 2020), and fund size (£2.7bn). Performance data since inception was scheduled to show a fund return of (12.90%) against a benchmark of (13.18%), a relative outperformance of 0.28%.

The Sterling Investment Grade Credit Fund section was scheduled to outline its asset class (primarily Sterling-denominated investment grade corporate bonds), benchmark (iBoxx Sterling Non-Gilts Index), objective to provide a total return in excess of the benchmark of +0.6% p.a. over rolling five-year periods, and its external managers (RLAM, Insight, M&G). The fund's inception date was March 2020, and its size was £5.7bn. Performance data since inception was scheduled to show a fund return of 1.92% against a benchmark of 1.07%, a relative outperformance of 0.85%.

Quarterly Update

The quarterly update from Border to Coast was scheduled to cover developments in their investment propositions. This included a change in the Sterling Index Linked Bond benchmark to UK index-linked Gilts over five years, increasing the investment opportunity set. The benchmark for the UK listed Equity fund was also scheduled to be changed to FTSE All Share ex Investment Trusts Index. A Global Sustainable Bonds product was scheduled to launch in July. The UK Real Estate Main Fund had completed a £400m investment in a portfolio of 866 single-family homes. Border to Coast's Responsible Investment & Stewardship Report and Annual Sustainability Report for the year ending 31 March 2026 were also scheduled to be highlighted, detailing their refreshed Responsible Investment and Engagement Strategies.

Investment Advisor Report

The committee was scheduled to receive a market update and advice on asset allocation from the independent investment advisor, William Bourne. Mr. Bourne's commentary was scheduled to express a view that equity markets were close to a secular peak, with increased volatility, particularly in the tech sector, due to significant investment in AI. He was scheduled to note the strength of the U.S. economy, the rising U.S. national debt, and the highest yields on long-term U.S. Treasuries in 25 years. Mr. Bourne was scheduled to discuss the U.S. Treasury and Federal Reserve's tactics to keep debt service costs down, and their potential impact on financial markets. He was also scheduled to comment on inflation data showing a slowing trend but remaining above targets in the UK and US, and the potential impact on the US dollar. Mr. Bourne's portfolio recommendations were scheduled to suggest that bond yields, especially index-linked bonds, were close to an attractive buying level.

Review of Investment Strategy Statement

The committee was scheduled to review the proposed Investment Strategy Statement (ISS), which is required by 31 March 2027. The report was scheduled to discuss various sections of the ISS, including roles and responsibilities, the Fund's Investment Beliefs, Investment Preferences, Investment Objectives, Strategic Asset Allocation, approach to Responsible Investment, and approach to Local Investment. The report indicated that the target area for Local Investment would be included in the Draft ISS following input from the committee. The proposed Strategic Asset Allocation (SAA) was scheduled to be presented, with a target of 65% in Equity (Listed and Private), 10% in Credit (Listed and Private), 15% in Infrastructure/Real Estate, 10% in UK Government Bonds, 0% in Other Alternatives, and 0% in Investment Cash. The report also detailed the Fund's approach to Responsible Investment, including its objectives, priorities, and preferences, and discussed options for the target area of Local Investment, favouring the North-East Region.

LGPS and Pooling Update

This report was scheduled to discuss recent changes in the LGPS environment, including the implementation of the Pensions Act 2026 requirements by Border to Coast and the Fund. It was scheduled to reference the Scheme Advisory Board Actuarial Valuations Report, summarising the overall position of the LGPS, and discuss the latest position on investment in conflict zones. Developments in Border to Coast's investment propositions were also scheduled to be covered. The report detailed the requirements for asset pool companies under the Regulations, including being FCA-regulated, having expertise, acting as the principal source of advice, managing all funds, and conducting due diligence on local investments. It outlined Border to Coast's enhanced operating framework, including its Advisory, Asset Allocation, Legacy Management, and Hedging Services. The report also detailed the Fund's implementation timetable for the Pensions Act 2026 requirements, including the appointment of an LGPS Senior Officer and Independent Person, and the revision of core governance documents. The SAB Triennial Actuarial Valuations 2025 Report was scheduled to be discussed, noting an overall improvement in funding levels and a reduction in average employer contribution rates. The SAB Statement on Investment in Conflict Zones was also scheduled for discussion. Developments at Border to Coast Pension Partnership were to be highlighted, including changes to investment propositions and the launch of a Global Sustainable Bonds product.

Training Update

This report was scheduled to discuss the knowledge and skills requirements for Pension Committee members arising from the latest LGPS guidance following the Pensions Act 2026. The Fund intended to use Hymans National Knowledge Assessment tool to identify knowledge gaps. The report was scheduled to list several training opportunities available to committee members, including conferences organised by Border to Coast, LAPFF, LGA, and Pensions UK, as well as webinars and training events from Border to Coast, CIPFA, and the LGA. A training log was to be presented, detailing completed and registered training for committee and board members.

Risk Register Review

The committee was scheduled to review the Pension Fund Risk Register. The report highlighted one new risk, Artificial Intelligence Risks, and two modified risks: Compliance Failures and Insecure Data. The new AI risk was noted due to emerging risks and opportunities associated with AI in pensions, including governance challenges, member use of AI for financial planning, increased cyber-attacks, AI-generated scams, and potential bias. The likelihood of Compliance Failures was increased from possible to likely, reflecting potential missed McCloud timelines. The description of Insecure Data was amended to include AI. Other major risks and their current assessments were also to be presented, including Inflation, Global Financial Instability, Political Risk (Investment), Investment Class Failure, Inadequate Pooling Transparency, Pooling Investment Underperformance, TPF Governance Skills Shortage, Inadequate Border to Coast Oversight, Inappropriate Investment Strategy, Climate Change, and Political Risk to the Scheme.

Exempt Items

The committee was scheduled to consider excluding the press and public from discussions on McCloud Progress and Pension Administration Report due to the disclosure of exempt information.