- Cambridgeshire and Northamptonshire LGPS - https://pensions.northamptonshire.gov.uk -

Investments Cambridgeshire

Investments

 

Investments Cambridgeshire

Investments and stewardship

We adopt a long-term perspective, focussing our investment strategy to generate sustainable returns on a risk adjusted basis. This helps our assets to grow to reflect our equally long-term future liabilities.

As at 31 December 2021 we have £4.3bn of assets.

What do we invest in?
The strategic asset allocation (SAA) is the key factor when we look at the risk and return profile of our investments. The asset classes that we invest in are equities, fixed income, and alternatives, as shown in the chart below. As long-term investors we believe in investing in a wide range of assets to cover us against unpredictable market conditions.

Investment governance
The Pension Fund Committee approves investment policies and strategy. The Investment Sub-Committee, supported by our advisors, implements the investment policies and strategy, which includes the appointment and dismissal of investment managers and monitoring of performance. Our governance arrangements are set out in the governance area [1] of our website.
Asset pooling

We are working with ten like-minded LGPS funds to implement the ACCESS asset pool in response to the Government’s LGPS reform agenda. The main aim is to encourage LGPS Funds to work together to ‘pool investments to significantly reduce costs, while maintaining investment performance.’

The pool is governed by the ACCESS Joint Committee, comprised of the Chair of each of the eleven constituent Funds. The Joint Committee have appointed Link Fund Solutions Ltd as the operator of the pool.

At 31 December 2021 64% of our assets are pooled with ACCESS, including passive equities managed by UBS but under pool governance.

Further details of the ACCESS pool can be found on the ACCESS website [2].

Investment strategy statement

Our approach to our investment arrangements is set out in our investment strategy statement, as required by Regulation 7 of the Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016 that requires us to create and maintain an approach to our investments. You can find a copy of our investment strategy statement on our key documents page [3].

Responsible investment

We’ve worked hard to develop an enhanced responsible investment (RI) policy, which forms part of our overall investment strategy. The new RI policy sets out our approach to sustainable responsible investment and will help us manage the carbon and climate risks impacting our investments better. 

The RI policy was agreed following a consultation that was open to scheme members and scheme employers. You can find a copy of the summary consultation responses and an updated investment strategy statement on our key documents page [3].  

The revised RI policy will inevitably mean some changes to our underlying investments over time. On 17 February 2022, the Investment Sub Committee approved decarbonisation targets to reduce the carbon emissions of listed equities by 23% by 2024 and by 57% by 2030 together with a climate action plan for 2022, 2023 and beyond. 

We intend decarbonising our portfolio at the same rate as the European Policy Curve (EPC) meaning our decarbonisation pathway would stay ‘ahead of the market’ and achieve our ambitions to reach net zero by 2050 or earlier.

Progress against these targets will be reviewed regularly via a climate dashboard setting out key carbon metrics which we will measure and track over time. We’ll provide regular communication on how we are progressing on our journey to achieve net zero.

You can find copies of our climate action plan, decarbonisation pathway, and climate dashboard on our key documents page [3].

Stewardship
Our investment managers should exercise their rights as owners of investments to actively participate in company level decisions tabled as shareholder votes at general meetings.

Pool aligned assets should be voted in accordance with the ACCESS voting policy on a ‘comply or explain’ basis with voting outcomes regularly monitored.

In addition to proactive voting, investment managers should act as active asset owners through engagement with companies where there are concerns over environmental, social and governance (ESG) issues.

We believe that acting collectively with other investors, for example, with fellow investors in the ACCESS pool or through membership of the Local Authority Pension Fund Forum (LAPFF) is an effective way to engage with companies.

Should engagement with a company not produce the desired results, we would ultimately expect its investment managers to divest from the individual stock in question.