Investment Subcommittee

26 June 2018   

Investment Subcommittee Minutes

 

Meeting held in the Whale Bay Room, 36 Water Street, Whangārei

on Tuesday 26 June 2018, commencing at 9.00am

 

 

Present:                        Cr John Bain                          (Chair)

                                                  Cr Bill Shepherd                  (Ex-officio)

                                                  Cr Penny Smart

                                                  Geoff Copstick                     (Independent Financial Member)

 

In Attendance:              Full Meeting                        Cr Rick Stolwerk

                                                                                                     NRC Chief Executive

                                                                                                     GM, Corporate Excellence

                                                                                                     Finance Manager

                                                                                                     Financial Systems Administrator

                                                                                                     PA, Corporate Excellence (minutes)

                                                  Part Meeting                       Andy Mahony, EriksensGlobal (via phone)

 

 

The Chair declared the meeting open at 9.00am.

 

1.0     APOLOGIES

Nilp

 

2.0     DECLARATIONS OF CONFLICTS OF INTEREST

Nil

 

3.0     REPORTS

3.1       Performance of council's externally manged funds to                            Presented by: Finance Mgr
May 2018 and transfer of IIF funds

ID: A1076599

 

Moved (Bain / Copstick)

1.         That the report ‘Performance of council's externally manged funds to May 2018 and transfer of IIF funds’ by the NRC Finance Manager and dated 19 June 2018, be received.

 

Carried

 

9.16am  -  Andy Mahony joined the meeting

 

Summary of Discussion

·      Each fund performed well in May, with good long term performance as well

·      The only exception is the infrastructure fund, which is underperforming

·      No changes to the asset allocation are recommended at present

 

·      More volatility is expected in the markets due to US / China trade wars

·      The question was asked whether it is prudent to pare back global assets due to current volatility - the current portfolio spread across a number of funds mitigates this risk

·      Fund managers are building cash holdings, which indicates increased volatility is approaching

·      Risk is not reported to the Council and needs to be shown to allow greater clarity around why some funds which appear to be underperforming are being utilised

·      Next review of NRC’s portfolio is due in August / September

 

Agreed Action:    Jonathan Erikson and Andy Mahony to present to Council                          GM, Corp Ex
in August/September when portfolio is due for review

 

 

9.55am  -  Andy Mahony left the meeting

 

 

3.2       Transfer of managed fund gains to council’s general funds                 Presented by: Finance Mgr

ID: A1076687

 

Moved (Bain / Smart)

1.         That the report ‘Transfer of managed fund gains to council’s general funds’ by the NRC Finance Manager and dated 19 June 2018, be received.

2.         That $1,422,029 of gains are physically withdrawn from the Property Reinvestment Fund before 30 June 2018, in line with a recommendation from EriksensGlobal.

3.         That $276,313 of gains are physically withdrawn from the Infrastructure Investment Fund before 30 June 2018, in line with a recommendation from EriksensGlobal.

 

Carried

 

Summary of Discussion

·      The Finance Manager advised that the Investment SubCommittee approving recommendations 2 and 3 above are based on the fact that council has already approved these during their adoption of the Annual Plan

·      Cr Bill Shepherd confirmed that this was correct

 

 

Meeting closed at 10.04am

 

 

Post Meeting Notes:

1.              Dr Ed Schuck has been appointed to undertake a review of Council’s managed funds.

2.              Updated Terms of Reference are attached, detailing Cr Stolwerk as an alternate member of the SubCommittee.s