States Investment Strategies: Amendment

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A decision made on 26 July 2019

Decision Reference: MD-TR-2019-0068
Decision Summary Title:	Amendment to the ‘States Investment Strategies’ document.		Date of Decision Summary:	25th July 2019
Decision Summary Author:	Head of Treasury and Investment Management		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Amendment to the ‘States Investment Strategies’ document		Date of Written Report:	2nd July 2019
Written Report Author:	Head of Treasury and Investment Management		Written Report : Public or Exempt?	Public
Subject: The amendment of the ‘States Investment Strategies’ document and presentation to the States.
Decision(s): The Minister approved the amended ‘States Investment Strategies’ document. The Minister decided to present the updated document to the States.
Reason(s) for Decision: Paragraph 25 of the Public Finances (Jersey) Law 2019, (sub paragraph 1) states the Minister may cause any money of the States or money held by the States or a States body to be invested and (sub paragraph 3) the Minister must present to the States an investment strategy in respect of any money to be invested, and must do the same for any amendment to the strategy. Under advice from the Treasury Advisory Panel following consultation with Aon, the States Investment Advisor, a number of changes to the Investment Strategy were recommended. Changes to the Strategy are as follows: An ‘Alternative Risk Premia’ (‘ARP’) pool was added as an alternative asset class of the Common Investment Fund. This was added to the ‘CIF – Investment Pool Strategies’ section of the document outlining the pool liquidity, risk and return characteristics. The Social Security (Reserve) (‘SSR’) Strategy was modified to increase the strategic allocations to ‘alternatives’ from the ‘bond’ class. This is planned to be actioned through a transfer from the Absolute Return Bond (‘ARB’) class to the ARP class. Given the long time horizon of the Fund, it was determined that the characteristics of ARP were more appropriate to the long term aims of the Fund and resulted in an improved return profile. The Estate of Rosalind Vinson was fully divested and has therefore been removed from the Investment Strategy Document. Within the Trust and Bequest Fund section, the Income balanced strategy contained a reference to a holding of Corporate Bonds within the ‘Bond’ asset allocation. This has been modified to allow a strategic movement from Corporate Bonds to ARB within the existing strategy. Following changes to legislation, references to the Public Finances (Jersey) Law 2005 and relevant underlying regulations were updated to refer to the new Public Finances (Jersey) Law 2019. Once approved by the Minister in accordance with the Law the Investment Strategy document should be presented to the States.
Resource Implications: There are no resource implications from this decision. Any costs stemming from strategy changes will be met from sale proceeds and are expected to be minimal. The changes to strategy will be administered as part of the ongoing responsibilities within the Treasury & Investment Management Team.
Action required: The Head of Financial Governance to advise the Head of Treasury and Investment Management when the decision has been signed. The Greffier of the States is requested to arrange for the attached to be presented to the States. The Treasury and Investment Management Team will ensure changes are implemented.
Signature:		Position: Deputy S J Pinel, Minister for Treasury and Resources
Date Signed:		Date of Decision: