Meeting documents

1

ELECTION OF CHAIRPERSON

Mr. Gareth W. Roberts OBE was re-appointed Chairperson for this Committee.

The Chairperson thanked the Sub-Committee for their confidence in him.

2

APPOINTMENT OF VICE-CHAIRPERSON

Mr. Elwyn Schofield was re-appointed Vice-Chairperson for this Committee and also thanked the Sub-Committee for their confidence in him.

3

DECLARATION OF INTEREST

No declaration of interest were received by any Member or Officer in respect of any item on the Agenda.

4

MINUTES

The minutes of the meeting of the Investment and Contracts Committee held on 7 February, 2006 were confirmed as a true record.

5

MINUTES OF THE INVESTMENT AND CONTRACTS SUB-COMMITTEE

The minutes of the meeting of the Investment and Contracts Sub-Committee held on 3 April, 2006 were confirmed as a true record.

Arising thereon :-

ITEM 3 - LAND AT RHOSGOCH (This matter was taken in private)

The Treasurer reported that despite contact with them since the Sub-Committee concerning (b) they had not yet responded as requested.

The Treasurer reported that the Senior Valuation Officer would be leaving the employ of the Council to work for a neighbouring Authority.  He expressed his gratitude to the officer for his much valued assistance in progressing the proposed sale of land at Rhosgoch.

The Chair and Vice-Chairperson reiterated these comments and on behalf of the Committee wished him well in his new post.

In view of this development, the Treasurer sought this Committee’s authority to enter into negotiations with the officer’s new Authority requesting that the officer in question be allowed to continue working on the is project until the successful conclusion of the said sale.

RESOLVED that authority be given to the Treasurer to enter into negotiations with the neighbouring Authority in this respect and that he be also requested to write to the officer in question expressing this Committee’s appreciation for his much valued assistance.

ITEM TAKEN IN PRIVATE

6

INVESTMENT MANAGEMENT ARRANGEMENTS

Reported by the Treasurer - that under the Trustee Act 2000 and relevant good practice guidance, charity trustees were expected to keep their investment management arrangements under review.  The Committee already undertook its monitoring role through the quarterly meetings with the investment managers.  From time to time it was also appropriate that it should step back and review its overall strategy, the brief it gave its investment managers and its choice of investment managers.

Investment decisions needed to be taken within the context of an overall investment policy which stated the charity’s long-terms objectives for investment.  The Charitable Trust adopted its long-term investment objective of increasing the capital value and income in line with inflation on 31 July, 1990.  That objective had been reaffirmed since, most recently in 2004.

Subordinate to the long-term investment policy was the asset allocation and associated benchmark.  This was set as a medium term view of the best way to achieve the long-term objective in current circumstances.

The investment managers’ performance was measured against an agreed benchmark and there was a performance related element in their fee which was linked to it, based on achievement or otherwise in each calendar year.

The stance adopted by this Charitable Trust with its investment managers’ was a segregated portfolio, but using pooled vehicles in overseas markets, an approach agreed at their appointment.  Their approach generally was at the active end of the spectrum.  The choice of benchmark with its 80% equity content in particular was one which aimed for long-term growth but at the risk that there would be short-term setbacks in individual years.  Details were provided within the report of the investment managers performance each calendar year since their appointment.

Of more relevance, however, to the current review was whether the benchmark itself had indeed delivered the long-term objective, and whether it had been a challenging target to meet.  Details of the rate of return achieved over the period 1998-2004 were also provided within the report.  This suggested that over this period the benchmark had indeed allowed the Trust to meet its long-term objective and overall performance as well as other charities.

Past performance was the only evidence available but it was not predictor of future performance.  Even the best fund managers had bad years and vice versa.  Going forward, the Charitable Trust in the Treasurer’s opinion needed to make judgements based on the present position and to choose arrangements which it had confidence would best deliver its objectives from now on.  Different options were therefore put forward by the Treasurer together with a suggested course of action.

However, the evidence reviewed here did not so far make the case for a fundamental change to present arrangements.  The Trust needed to have greater assurance that its arrangements continued to be appropriate, which a review would give and there would also be an advantage in obtaining a fresh perspective to assist it in this end.

An independent review would cost in the region of £5-20,000 depending on its scope.  The Treasurer had met with the Investment Managers and separately with a selection of independent advisors to examine the options and scope of any review and he reported verbally on his findings at the meeting in relation to four such companies.

The Treasurer also took the opportunity of informing the Committee that it was opportune to codify this Committee’s long-term Investment Policy for reference purposes and that once completed he would provide the members of this Committee with a copy.

He expressed concerns that a formal setting of meetings may not allow the free exchange of views necessary to build a rapport between the Committee and the investment manager.

In this report the Committee were of the opinion that future meetings should be convened at the Business Centre, Llangefni and that a recommendation be made to the next meeting of the Charitable Trust that it be allowed to dispense with translation and recording facilities for meetings with Investment Managers.

The Committee were also of the opinion that should the Treasurer intend to convene any further meetings with the Investment Managers/Independent Advisors that 2/3 members be allowed to attend in a ‘listening brief’ capacity.

RESOLVED

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to note the contents of the detailed report.

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that authority be given to the Treasurer to draw up a document setting out this Committee’s long-term Investment Policy and that members be provided with a copy of such document.

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that authority be given to the Treasurer to prepare a brief reflecting views expressed by the Committee during the discussions with a view to commissioning an independent input to the review.

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that to this end, Company ‘A’ and ‘B’ be invited to respond to the brief at a meeting to be arranged with this Committee which is mutually convenient to both parities.

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that any future meetings between the Treasurer and the Investment Managers/Independent Advisors to discuss options shall include in a ‘listening brief’ capacity, the Chair and Vice-Chair of this Committee, together with any other member of this Committee who is able to be present at the time.

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to recommend to the Isle of Anglesey Charitable Trust that in order to promote more flexibility as to the choice of venue, that the Trust agrees to future meetings with the investment advisors being allowed to dispense with translation and recording facilities.

G.W. ROBERTS OBE

CHAIRPERSON