This meeting of the Pensions Committee will include updates on the performance of the Lambeth Pension Fund’s investments, details of the Fund’s exposure to companies operating in Israeli settlements in Palestine, and an update on general pensions matters since the last meeting.

Lambeth Pension Fund Investment Performance

The meeting pack includes a report by Mercer, the Fund’s investment adviser, on the performance of investments made by the Lambeth Pension Fund in the second quarter of 2024.

It says that the Fund underperformed against its benchmark in the second quarter of 2024. It returned 1% against a benchmark of 1.6%. Underperformance over one, three and five year periods was “largely driven by London CIV (JP Morgan) and Invesco Property portfolios.”

The actuary estimates that the funding level of the fund has increased to 118%. This is an increase of 4% since the previous quarter.

The actuary’s estimated funding level as at 30 June 2024 increased to 118%.

The report also sets out the allocation of the Fund's investments as at 30 June 2024, compared to the strategic benchmark:

Asset Class	Strategic Allocation (%)	Actual Allocation (%)	Variance
LDI	15.0	13.6	(1.43)
Global Equity	32.5	37.1	4.6
Emerging Market Equity	5.0	9.6	4.6
Property	10.0	8.8	(1.2)
Multi Asset Credit (MAC)	16.0	18.3	2.3
Private Debt	8.0	8.3	0.3
Private Equity	7.5	3.0	(4.5)
Corporate Bonds	5.0	0.0	(5.0)
Cash	1.0	1.4	0.4

As at 30 June 2024 the Fund was most overweight in Global Equity and Emerging Markets Equity. It was most underweight to Private Equity and Corporate Bonds.

The report pack also says that £2.09m in fund managers fees were paid in the second quarter of 2024.

General Update

The meeting pack includes an update on several general pensions related matters since the last Pensions Committee meeting, including the Fund’s exposure to two companies named in a UN report on business activity in Israeli settlements.

It says that the Lambeth Pension Fund currently has exposure to two of the 112 business entities included in the United Nations Human Rights Council report on business activity in Israeli settlements in Palestine. This exposure is worth £250,000, or 0.01% of the Fund.

The Lambeth Pension Fund currently has a 0.01% (£250k) exposure to two of the 112 business entities included in the United Nations Human Rights Council report into business activity in Israel's settlements, details are in Appendix Five of this report.

It also says that Councillor Martin Bailey, Chair of the Pensions Committee, and officers met with the two fund managers who hold the relevant assets on 27 September 2024.

The report includes an update on the London CIV, the pooled investment vehicle used by the Lambeth Pension Fund. The London CIV currently has approximately £18.9bn of assets under management. The estimated net fee saving for Lambeth Council for investing in the pool for the quarter ending 30 June 2024 was £272,000. The forecasted fee saving for the whole year is £1.09m.

The report also says that the Lambeth Pension Fund has successfully retained its signatory status to the UK Stewardship Code. This is the third year running that the Fund has held this status.

The Lambeth Pension Fund has successfully retained its signatory status to the UK Stewardship Code (now three years running).

A draft version of the Fund's Stewardship Report for 2023/24 is included in the pack. The final report is due by 31 October 2024.

The report pack says that the Fund’s Statement of Accounts and Annual Report were due to be published on 31 May 2024. However, because of “outstanding audit issues with the Council’s 2022/23 accounts”, it was not possible to publish them by this date.

Finally, the report pack suggests several training opportunities to the Committee. It recommends four events in particular:

• The Local Authority Pension Funds' Current Issues Conference on 22 October 2024, run by SPS Conferences in London.
• CIPFA Local Pensions Board Autumn Training on 21 November 2024.
• PLSA ESG Conference on 28 November 2024 in London.
• LAPFF Annual Conference from 4-6 December 2024 in Bournemouth.