Investments
It’s the Pension Fund’s role to invest the contributions our members and employers pay in, to help fund the pensions that we pay now and those that we will be paying in the future.
Who does the investing and how is it decided?
One of the functions of the Pension Fund Panel and Board is to agree on an Investment Strategy Statement (ISS). The ISS is intended to provide evidence that the Fund has considered the suitability of its investment policies and the approach to implementing those policies, including the types of assets that the Pension Fund will invest in.
To make its investments, the Pension Fund uses specialist external investment managers. Since 2016, Hampshire has been a member of the ACCESS pool, and the pool is responsible for the appointment of investment managers to implement Hampshire’s investment strategy.
What does the Hampshire Pension Fund invest in?
There are lots of types of investment. You can group investments under different headings known as ‘asset classes’. The Hampshire Pension Fund invests in the following asset classes:
- Public equity
- Bonds
- Cash
- Property
- Alternative assets
What is public equity?
Businesses have several options for raising capital and attracting investors. Equity allows a company to give investors a share of the business. The investor then earns returns as the business grows. Most publicly traded stocks are available and easily traded daily through public market exchanges, such as the London Stock Exchange.
What are bonds?
A bond gives a fixed rate of return. A bond could be thought of as an ‘I owe you’ between the lender and borrower that includes the details of the loan and its payments. Bonds are used by companies and governments to finance projects and operations.
What are alternative assets?
An alternative investment is a financial asset that does not fall into one of the conventional investment categories such as equities, bonds, and cash. Types of alternative investments include private equity and real assets such as timberland and infrastructure investments like airports, data centres and energy infrastructure.
What about other considerations in investment decisions?
The Pension Fund wants to be a Responsible Investor and recognises that Environmental, Social, and Governance (ESG) factors can influence long-term investment performance and the ability to achieve long-term sustainable returns. More information on the approach to Responsible Investment is available here.
