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

2. 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 2013-2014 Summary

3. 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

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

5. Strategic Allocation: Asset Class

6. S&P 500 Index 04/01/2012 - 04/01/2013

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

8. Returns by Asset Class 2011/12 % 2012/13 % UK Equity1.217.3 Overseas Equity-0.417.1 Private Equity2.217.7 UK Corporate8.912.2 UK Index Linked21.311.8 Property1.44.4 Total Fund1.114.5

9. Equity Manager Performance Investment ManagerPortfolio % Benchmark % +/- Legal & General17.817.60.1 Baillie Gifford17.314.62.4 Lazard16.617.0(-0.3) Oldfield Partners*16.320.9(-3.8) Veritas*16.420.9(-3.7) Henderson24.428.0(-2.8) JP Morgan21.817.33.8 Genesis12.18.33.6 *since inception returns, full year not yet applicable

10. Manager Performance – Other Asset Classes Investment ManagerPortfolio % Benchmark % +/- Pimco3.80.73.1 Partners Group21.716.84.2 Pantheon13.916.8(-2.4) DTZ3.32.21.1 Partners Group Real Estate7.82.55.1

11. Investment Performance – Longer Term 5 and 10 Year Performance

12. Investment - Global & Local

13. 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

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

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

16. Global Investments

17. Private Equity

18. 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

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

20. 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

21. 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.

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

23. 199019952000200520102015 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

24. The Principles for Responsible Investment

26. 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