Berkshire returns, LGPS guidance, MMF risk variations, Peterborough fostering, A2 Dominion rating, Business rates consultation

Berkshire pension fund report return of 0.5%
A nominal investment return of 0.5% has been reported for the year 2015–2016 by the Royal County of Berkshire Pension Fund. The fund annual report said that in real terms it achieved -0.1% over one year and 4% over three years “meeting the fund’s medium term 4% return target”. The fund’s annual report said that investments in emerging markets and commodities “were the main detractors from absolute performance”.

LGPS investment guidance welcomed
New guidance on investment for local government pension schemes shows DCLG has listened to concerns about the LGPS pooling project, according to Local Authority Pension Fund Forum (LAPFF). A statement from the forum said: “The renewed emphasis on the autonomous role of the funds, and the need for pools to be accountable to their individual member funds is crucial for the success of pooling.” LAPFF chairman Kieran Quinn said the “real value” of the guidance was that it showed government had listened to funds about the challenges in pooling.

Credit risk ‘disparity’ emerging in European MMFs
A wide disparity in credit risk is developing among European money market funds because of the range of investment strategies, according to Fitch, the ratings agency. Fitch estimates standard VNAV funds represent 35% of European MMF assets, up from 30% two years ago. Around two-thirds of standard MMFs invest in BBB or BBB- securities. But Fitch added: “There are substantial variations in the actual fund allocation to such securities, resulting in funds having materially different credit risk profiles.” Fitch said portfolio liquidity management practices also “vary greatly”.

Peterborough saves £1m moving adoption and fostering to charity
In an arrangement thought to be the first of its kind, a charity is to take over fostering and adoption services for Peterborough City Council. Members voted this week to move the service to The Adolescent and Children’s Trust (TACT). The arrangement is expected to save the council £1m a year and reduce dependence on “higher cost” independent fostering. Cllr Sam Smith, Peterborough cabinet member for children’s services, said: “We believe that this new partnership will enable us to recruit and retain more local foster carers through an improved support network that TACT will deliver. This will lead to more local longer-term foster placements for Peterborough children and young people.”

Housing association affirmed ‘AA-‘ but on negative outlook
Ratings agency Fitch has a “affirmed” housing association A2Dominion at AA-, but with a negative outlook. A2Dominion’s long-term issuer default rating (IDR) is at AA-, while the short-term rating is placed at F1+. However, the negative outlook, Fitch said, comes because of the outlook for the housing association sector. “The sector is facing increasing exposure to business risks with expansion into non-social housing activity and rising development activity. Although public funding and regulatory oversight are strong credit factors supporting the ratings, in Fitch’s view, they are not as robust as they once were,” the agency said.

Busines rates consultation launched
A consultation on transitional arrangements for business rates payments under revalations starting April 2017 has been launched by DCLG. The transitional measures aim to help businesses facing bigger bills under the new figures. Rates increases are capped in the first and second year for small properties to 5% and then 7.5%. But DCLG offers two relief options for consideration for medium and large properties. The paper said only a minority of business will find themselves paying more and in London business properties will benefit from relief worth £1bn.