The Royal County of Berkshire Pension Fund – Interview


exclusions from extractive fossil fuel com- panies. We also have exclusions from investments in Russia – that is a reaction to the events over the past couple of years. But generally speaking, other than those two, engagement is viewed as the pre- ferred and positive way forward. You can engage with the company to try to get them to change their behavior and this under- pins our responsible investment policy. The way I see it is if you divest, you en- courage companies to go private, and then they can just continue that behavior be- hind closed doors with less scrutiny. Thus, engagement is almost always preferred.


Is your fund committed to net zero? We haven’t made an asset owner commit- ment to net zero. But our pool [Local Pen- sions Partnership Investments], with which we’ve pooled almost 100% of our assets, have made the Institutional Inves- tors Group on Climate Change asset man- ager commitment to net zero and we fully support that.


So you have pooled almost all of your assets? It’s around 80% of our assets which are in the pool’s investment vehicles. The remaining assets are managed by Local Pensions Partnership Investments. In the industry, pooling is interpreted in differ- ent ways. But we have fully embraced the government’s pooling agenda from the early days.


Generally, our performance has been held back by our exposure to real estate.


Our relationship with Local Pensions Part- nership Investments, especially through the delegating of the manager selection process, gives us significant time to focus on the more strategic priorities to build resilience and improve our funding posi- tion and tackle other pertinent matters.


So pooling has proven to be a good initiative? It has absolutely been the best thing that’s ever happened to the LGPS in my opinion. The industry has seen quite a lot of ques- tionable decisions in the past, perhaps being made by a few mavericks without proper diligence, scrutiny and challenge. That damaged performance, inflated fees, and, in some circumstances, actually influenced the LGPS’ reputation. It’s crystal clear that putting qualified and experienced FCA-regulated managers in the decision seat is the absolute best thing from a governance standpoint for the LGPS and the asset management indus- try as a whole.


What has been your biggest challenge as a pension fund manager?


The biggest challenge has not been on the investment side of things but managing an increasingly complex administration environment within the context of dimin- ishing and constrained resources and a skills shortage across the industry. But probably the biggest challenge is working out where to go now in respect of climate change modeling. There’s a huge divide between the scientific community and the investment management community, and we are in limbo trying to work out what to do next with that. There is so much new data, so many new studies, so many headlines, to the point where we are working through all that right now. It’s an incredibly diffi- cult challenge.


On that modeling, what is the best way forward? That’s what we haven’t quite established yet. We have done our modeling, but the


DAMIEN PANTLING’S CV


September 2021 – present Head of pension fund Berkshire Pension Fund


February 2020 – August 2021 Head of finance (Growth, housing, corporate services, assurance) London Borough of Barnet


2019 – 2020 Various local authority regeneration / property / commercial / trading com- pany roles


2018 Pension fund manager Westminster City Council


2014 – 2018 Various local authority finance roles


whole LGPS and asset management industry in general is in limbo on what to do next.


You mentioned resources and skills: what is the big issue?


This is more on the fund administration side. And there needs to be a two-step approach to this: one, getting people interested in pensions administration. Secondly, grow your own. Recruit people at a graduate and apprentice level, train them up and ensure they have the appro- priate skills.


What is the aim of the fund going forward? The main aim of the fund is, and always should be, to pay pensions as they fall due.


What is your ambition as the pension fund’s manager? My primary goal is to get Berkshire back to full funding.


How long do you anticipate it taking until you achieve that?


It depends, because we value our fund every three years and the timescale chang- es. But the absolute latest would be 2038 based on current deficit recovery plans.


Issue 127 | October 2023 | portfolio institutional | 15


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