Sutton's Pension Fund has underperformed its benchmark for the quarter ending 31 March 2025, raising concerns among committee members.
The fund's market value stood at £962 million, a decrease of £27 million from the previous quarter. According to a report reviewed by the Sutton Council Pension Committee on Tuesday, the fund underperformed its benchmark by -1.0%, yielding a return of -2.7% against a benchmark of -1.7%. The one-year return was 3.7%, underperforming by -1.4% against a benchmark of 5.1%.
Manager contribution was negative for relative performance as equities and infrastructure mandates underperformed over the quarter. The main contributors to the underperformance were the LCIV Sustainable Equity Fund and LCIV Renewable Infrastructure Fund.
The report also highlighted the fund's asset allocation, noting that its actual allocation as of 31 March 2025, is outside of the strategic asset allocation range in equities, property, private debt, impact and cash. Despite the recent underperformance, the funding level as of 31 March 2025, was 143%, with assets at £945 million and liabilities at £662 million, resulting in a surplus of £283 million.
During the meeting, the committee also discussed a petition calling for a review of the council's investment strategy and divestment from companies operating in the Occupied Palestinian Territories (OPT). The report pack noted that as of 31 March 2025, the fund had £6,490,942 invested in companies listed by the American Friends Service Committee (AFSC) and Investigate, which are organisations that identify companies allegedly involved in human rights violations related to the Israeli occupation. The report pack stated that this represented 0.67% of the total fund value.
The committee was informed of a red rated risk: Risk 27 (Administration) Failure by software provider (Civica) to provide software compliant with LGPS Regulations.
Jonathan Bunt, Independent Chair of the Pension Board, provided an update on the board's work, including scrutiny of fund investment and administration performance, and a focus on risk management arrangements.