Investment Report Richard Keery Investment Manager Strathclyde Pension Fund Richard Keery Investment Manager Strathclyde Pension Fund

AGENDA Current Investment Strategy Investment Performance - 1 st April 2012 to 31 st March 2013 Investment Performance – Longer Term Investments – Global and Local Business Plan Objectives Summary

Manager Structure: March 2013 Legal & General Baillie Gifford Lazard Oldfield Partners Veritas JP Morgan Henderson Genesis Pantheon Partners PIMCO DTZ Multi-Asset Passive Global Equity Specialist Mandates Millennium Legal & General Baillie Gifford Alliance Bernstein Edinburgh Partners Capital International Invesco Lazard JP Morgan Henderson Genesis Pantheon Partners PIMCO DTZ Multi-Asset Passive Global Equity Specialist Mandates Currency Overlay

Investment Strategy Long Term Strategic Benchmark Quoted equity65% Private equity7.5% Property12.5% Bonds15% 100%

Strategic Allocation: Asset Class

S&P 500 Index 04/01/ /01/2013

Investment Performance: 2012/2013 WM All Fund Ranking: 50 th percentile

Returns by Asset Class 2011/12 % 2012/13 % UK Equity Overseas Equity Private Equity UK Corporate UK Index Linked Property Total Fund

Equity Manager Performance Investment ManagerPortfolio % Benchmark % +/- Legal & General Baillie Gifford Lazard (-0.3) Oldfield Partners* (-3.8) Veritas* (-3.7) Henderson (-2.8) JP Morgan Genesis *since inception returns, full year not yet applicable

Manager Performance – Other Asset Classes Investment ManagerPortfolio % Benchmark % +/- Pimco Partners Group Pantheon (-2.4) DTZ Partners Group Real Estate

Investment Performance – Longer Term 5 and 10 Year Performance

Investment - Global & Local

UK Property Buchanan Street, Glasgow, House of Fraser St John’s Retail Park, Wolverhampton 36 Golden Square, London Villiers St, London Northgate Quarter, Oxford 1-3 Royal Exchange, London

Global Property Fashion House, Warsaw, Poland Nexus Building Hong Kong Haimanten Shibuya Tokyo, Japan Leipzig, Germany Alexandria, Virginia, USA Arlington, Virginia, USA

Novotel, Kowloon, Hong Kong Belle Mead, New Jersey, USA

Global Investments

Private Equity

Local Investments - New Opportunities  Scottish Loan Fund  Lending to established Scottish-based growth and exporting SMEs managed by Glasgow-based Maven Capital  Scottish Equity Partners  Glasgow based Private Equity investment in venture capital and growth equity.  Panoramic Growth Equity  Glasgow based fund investing in fast growing later stage small and medium sized UK SMEs  Rock Spring Ventures  Scottish based investment fund targeting high-growth life science companies  Pensions Infrastructure Platform (PIP)  Founding investor in the Pensions Infrastructure Platform (PIP)  Option to invest £100m with a PIP fund target of £2bn

Local Investment  City Legacy  Cash flow financing to build the 2014 Commonwealth Games Village. Facility of up to £35m.

Business Plan Objectives 2013/2014  Fundamental Indexation  Complete tender and funding of mandate(s)  New Opportunities Framework  Implement revised operational framework  Global Custody  Complete tender of contract and implementation of new arrangements  De-Risking Strategy  Complete appointment of risk manager. Develop implementation plan  Responsible Investment  Review engagement overlay service  Investment Strategy  Preliminary discussions and preparation for 2014 review of strategy and structure

Summary  Despite a period of uncertainty earlier in the year markets have generated strong returns  The Fund outperformed its benchmark in the year and increased its value to £13 billion  Performance across all asset classes has been positive while performance among managers has been mixed.  Longer term performance continues to be positive with the Fund ahead of its peer group benchmark and actuarial target.

Responsible Investment Richard McIndoe, Head of Pensions Strathclyde Pension Fund Richard McIndoe, Head of Pensions Strathclyde Pension Fund

Cadbury Report Cadbury Report Greenbury Report Hampel Committee UNPRI Stewarding Code ESG No Policy Engagement Policy UNPRI Signatory ESG Overlay Corporate Governance Vote at all UK AGMs & EGMs Vote at all AGMs & EGMs Responsibility Managers Managers & Consultants Managers & SPF Managers & SPF & overlay Combined Code Combined Code LGPS Disclosure Regulations Myners Report Higgs Report Kay Review Kay Review Responsible Investment Timeline Strathclyde Pension Fund

The Principles for Responsible Investment

Performance Against Peers Your score per Principle ( ↑↓ from 2010) Median Score: ALL AOs Your quartile rank GPS67% (-)73%3 Principle 1100% ( ↑ )34%1 Principle 287% ( ↑ )65%1 Principle 397%( ↑ )71%1 Principle 457% ( ↑ )59%3 Principle 546% (-)75%4 Principle 698% (-)52%1 No. of peers198