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Offers certified investment management analyst with a product or service that delivers compare money managers and corporate finance services. Introduction In introducing this seminar series James Brooke Turner observed that when reviewing its investment strategy the Nuffield Foundation had found a number of questions particularly difficult to answer. Generally these were questions that were specific to endowed foundations and not to pension funds or other investors. Often the available advice did not adequately reflect this difference or only offered one model. This had led to an initial seminar in May 2004 and now to this series of four meetings. The Foundation hoped that guests could reflect on the requirements of investing endowed funds (as opposed to other funds), and what issues should be borne in mind during that process. Three Case Studies Endowed foundations adopt a range of different investment strategies, depending on their objectives, commitments, tolerance of risk, liquidity requirements, levels of expertise and so forth. At this seminar, participants heard about three contrasting investment strategies and considered if there were any common themes or consequences in terms of cost, planning for expenditure, governance etc. Endowment A Endowment B Endowment C Time Horizon Perpetuity Perpetuity Perpetuity Restrictions Capital Expendable Permanent Expendable Investment Policy None, fully diversified 20% in private donor stock None, fully diversified Spending Policy 95% uncommitted 50% uncommitted 95% uncommitted Distribution target Spending consistency GDP linked (subjective) GDP linked (formulaic) Investment Style Income received target Multiple balanced managers Equity only The presentations were made by individuals who had different roles (and perspectives) within their organisations. Endowment A The presentation was given by the chairman of trustees. His background was as an academic economist (self-confessed as rusty). The speaker began by exploring "what do the trustees want". How trustees view this is the most important determinant of the responsibility of the Investment Committee. However, more often than not, the answer seems to come from the negative: "what is it that the trustees don't want"? At Endowment A trustees don't want surprises; they don't want the capital value to go down; they are not 'risk takers' and they don't really want to be very different from other people (i.e. if required the trustees would prefer to lose money in good company than on their own). Nor do trustees have a particular wish to have to consider investment strategy much beyond their basic fiduciary duties… so what the trustees want is to make grants based on a predicable 'dividend' paid by its investment committee. It is that that is their expertise, and not the management of a large and diversified investment portfolio or the details of how the income is obtained. The Trustees therefore rely completely on their Investment Committee, giving them the broadest of remits: to maintain the capital value whilst providing a predictable, stable, and sustainable real level of income for grant making purposes. In practice, the investment strategy is that of active management, a diversified mix of all asset classes, all global markets, accessed through specialist managers, including a wide range of alternative assets. They do not follow a specifically ethical-type policy, which the Investment Committee would resist strongly because of its constraints and complexity. A small amount of Programme Related Loans are kept separate from the asset portfolio and are managed via the grant programme. The Investment Committee (or trustees) have not felt it to be important or necessary to craft a long term policy or a target portfolio, preferring a flexible, opportunistic approach. This has to date been reinforced by generating good performance since its fairly recent inception, although the question remains whether is it a workable long term strategy. Overall their aim is to perform a bit better than the markets allow you to do (i.e. to add at least some value), and thereby maintain the real value through the whole of an investment cycle. The focus of the trustees on spending stability over other factors generated some questions enabling the speaker to elaborate further on their approach. " The rate of income receipts (approximately 4% of the endowment value) has been supported by no cut in dividends, so there maybe implications for their strategy if that situation changes. " There was some discussion of how a spend rate could be fixed without discussion of the risk of not achieving it, but others questioned the value of trying to determine likely returns in advance. For this reason the trustees were nervous about adopting a total return distribution strategy. " While trustees could become more educated (more technically competent) in investment matters, how important was that when their primary role was to ensure that the income was spent well, and the Investment Committee was performing successfully? " When pressed to choose between spending stability or capital preservation the speaker was confident that the trustees would choose spending stability. Endowment B The presentation was given by the Chief Financial Officer. His background was in accountancy. The second (Eurozone based) endowment had an investment objective of the maintenance of the purchasing power of assets. Prior to 1997 the investment strategy was one of 'buy and hold'. After a review this was changed to a target return (set annually) which can be received as either income, capital growth or a mixture of the two. This required return figure is then passed to several balanced managers who are charged with achieving it (net of fees) over the following twelve months. The target figure is designed to maintain over the long term a distribution in line with European growth. The following calculation is used to set the annual target figure. Objective Benchmark Maintenance of capital To increase by Eurozone inflation rates Distribution rate Expected long term Eurozone GDP growth For 2005, this calculation generated a target of 7% p.a., with a minimum of 5.2% p.a. just to maintain purchasing power and fund distributions. The distribution rate is 3.5% p.a. of assets at the beginning of the year, adjusted by a 3 year rolling average. Endowment B uses several balanced managers who are further diversified by geographic financial centres. They are each given the same wide discretion within the same pre-determined guidelines. For example these guidelines include very wide ranges for equities and bonds of between 0-70% for either. The range for cash is 0-30%. The endowment requires a minimum exposure to the Euro of 50% (hedged if necessary). Investment managers are not given benchmark related performance targets but instead have a downside limit of minus 3% of capital invested. In effect this means that they must maintain 97% of mandate over any 12 month period. This approach is intended to give each manager the room to meet the return target, to allow them full control over their own asset allocation, the flexibility to adapt to market changes, and to allow them to use to the full their own particular strengths of investment style or area of expertise. The endowment's own staff monitor both the individual managers' portfolios according to their expectation of how each was to achieve their target. They also monitored the portfolio across all managers (which usually produced a more balanced portfolio of almost half in equities with the remainder mostly in cash and bonds). The aggregate portfolio was generally 95% hedged to the Euro (against a specified minimum for individual mandates of 50%). The governance implication of such an arrangement (of multiple balanced managers) recognised the limitations of the trustees' skill in selecting the optimum asset classes for the investment objective. The arrangement relied on the managers allocating assets between varying classes rather than the committee through some form of policy portfolio. The speaker commented that the main difficulties associated with this approach are " adjusting to a return expectation based on macro economic performance as opposed to the annual return generated by financial markets " 'weaning' managers off the more traditional approach of managing to relative (index) returns and towards this absolute return strategy " evaluating the monetary versus the psychological cost of 'hiring and firing' managers given the close working relationships developed between client and Manager. " managing the manager's conflict of interest including a) being a broker of trades as well as a manager of the mandate, or b) the remuneration of staff being sometimes being based on profits taken from client. In conclusion, the speaker said that in the seven years since the change to this strategy the endowment managers had achieved 83% of their annual targets and which was in excess of the minimum required to meet their investment objective of maintaining purchasing power. The speaker elaborated further on this endowment's investment strategy in answering a number of questions: " Question: With a total return approach, why was not more invested in absolute return/alternative assets (private equity or hedge funds)? Answer: First, there was already c.20% of assets in illiquid investments outside of the individual Managers' remits and secondly, their overall style was to 'follow' the quality of the Managers. The endowment picked its managers based on criteria such as length of experience, continuity of staff, and a lack of 'star' culture. " Question: How do they know that the 'aggregated' asset mix will deliver the return objective? Answer: The approach was not necessarily to deliver a long term strategic asset allocation portfolio but instead to use active investment to achieve a target return. A passive or quasi-passive investment approach wouldn't generate the absolute return required. " Question: Why have a downside limit, and how was that limit determined? Answer: The minus 3% downside risk guideline was aimed at achieving a number of objectives: (i) it was a means of defining what risk was for the trustees (ii) therefore it was a means to maintain capital; (iii) it was also a 'driver' to the managers to think about the risk inherent in their own portfolios. For Endowment B the risk was not the volatility of returns but the risk of not achieving the target return. In fact, as it turns out, the 'aggregated' portfolio had a fairly high risk profile because of the high percentage of equities. Endowment C The presentation was given by a trustee and the chairman of the Investment Committee. His background was in fund management. He began by describing the methodology that his endowment had used to forecast a long term sustainable investment return. The initial question was to find a level of spending the endowment can support at the same level indefinitely into the future. The 'same level' was defined as constant 'real' prices based on an inflation measure of 20% RPI and 80% earnings inflation. Such a long term perspective required the endowment to keep pace with long term economic growth by using equities as a proxy for growth. The premise behind this was that the return on equities (to perpetuity) = starting yield + economic growth. Endowment C uses this basic model and 'fine tunes' it but including the following assumptions or adjustments: " An expectation that equities' future behaviour would resemble their past behaviour " That future company profits would continue to represent a similar proportion of economic growth over time (history shows a remarkably stable long term relationship) " That in the long term dividends would follow profits, although trends, fashions and tax incentives can modify the means by which those profits are returned to shareholders, as well as the timing of their distribution. " A faster rate of growth in wage inflation against retail inflation (2% pa). " The cost of investment management (-0.2%) together with an adjustment for expected superior investment performance against the FTSE all share. This factor was the most problematic to predict since the average fund tends marginally to under-perform an index reflecting the cost of dealing. However, the endowment had followed an ethical investment policy for the past 27 years where its expectation was that companies which perform better in the non-financial measures will also do better financially. This aspect of its investment policy was where it expected to 'add value' to their overall strategy. A long term expected total return was generated by applying reasonable expectations to these variables at the inception of the scheme. This was used to determine the spending rate which in turn was increased annually by the Earnings/RPI inflation index. At five yearly intervals the formula is recalculated to confirm that the distribution rate is still within reasonable parameters. Thus there is no immediate link between the market value of the endowment and rate of distribution, but instead simple periodic confirmation. This equity only strategy has produced investment returns in excess of its benchmark (UK All-Share) index over the long term (27 years) although not consistently over some shorter time periods. The Investment Committee frequently re-examined their assumptions in the light of over or under performance, if only to test the continuing validity of the model. Using the same methodology for calculating the expected return on a portfolio containing bonds or cash generated a much lower figure than equities because the starting yield on the bonds/cash was eroded by inflation and expenses without being enhanced by the uplift from economic growth or the prospect of superior investment performance. Property was also excluded since its returns behaved in a way similar to bonds. The one significant risk to the model came from a prolonged bear market, when maintaining the spending rate might diminish the capital to the extent that future returns would be unable to restore assets. For example, could the policy have been sustained through the 1974 crash, or would the Investment Committee have lost its nerve despite research which claims that it is safer for long term performance to be 100% invested at all times. The speaker elaborated on this model/strategy by describing some nuances which had to be considered: " Many UK companies now have significant exposure overseas earnings (and economic growth) which may demand that basis in UK economic growth be re-examined at some future point. " A separate third of the portfolio was invested in continental equities and this part of the portfolio was measured against two benchmarks: a European index as well as the UK All-Share. " Endowment C does not hold hedge funds partly because of some scepticism of the investment style itself, and secondly the need to see through to the underlying stocks because of their ethical policy. " The performance of their two investment managers has been mixed - partly because of the need to rise to the challenge of excluding approximately 30% of the All-Share index (for ethical reasons), forcing managers to think more carefully about stock selection. " Their Investment Committee consists of half of the 14 trustees some of which have business or financial backgrounds. There is a diversity among the trustees which stimulates intellectual challenge and valuable debate. While trustees too often want to be told what to do and what to think they remain on their own for the big decisions. General discussion: The three scenarios had demonstrated that there are many different ways to achieve the same or a similar objective. The culture of an organisation, its longevity and historical background has an important influence. This is illustrated by the different types of assets owned and managed by the Oxbridge colleges, and the way in which Foundations have built up their endowments. At some older colleges property and land account for 90% of assets, but the newer colleges have nothing similar. Similarly, older or newer endowments have different starting points: some start with cash, others with unwieldy existing portfolios or the donor stock. Some have constitutional constraints, others more freedom of action. Much will depend on what asset classes are available at any particular time. Emerging markets, for example, have only recently become available as an asset class. There was discussion of whether there was some fundamental 'change' taking place in investable opportunities (similar to the theory of the superiority of long term equity returns over other assets)? On the one hand many assets are now no longer available from the mainstream financial markets (e.g. the 'going private' of previous quoted equities); on the other, are there now more vehicles for being opportunistic and innovative. The challenge seemed to be to find ways to sustain the capital base in real terms while continuing to distribute a growing income in real terms. Were other assets able to help? It was unrealistic to expect an investment manager to always outperform. Endowments that relied heavily on income to fund spending had been not seen the volatility over the last five years that total return distributors had experienced. However the point was made that had there been a substantial reduction in dividends, income investors would have either had top reduce spending or sell capital at a substantial discount to earlier values. A general issue was the benefits and difficulties of having non-technical trustees responsible for investment decisions since few trustees had worked in the investment industry. The usual solution was to try to simplify the actual operation by hiring specialists (consultants, managers or custodians). One problem with Investment Committees can be that they want to hang on to what has performed well up to and including the point when fashions become 'bubbles' and then burst. One participant wished he could persuade his colleagues to be contrarian investors … unless, of course there was a good reason not to ... There was also a general view that large endowments have advantages over small ones in their greater flexibility to diversify and take a longer term view. Summary: The Chairman summarised the approach of each of the strategy as Endowment A: spending what is actually received and maintaining that value; Endowment B: diversifying risk though multi-manager selection rather than asset allocation; Endowment C: taking a long enough view means equity re-rating becomes unimportant. The Chairman also highlighted that the speakers had clearly illustrated how there could be big differences in strategy even within the endowed foundation sector. In addition, the investment process, the way decisions were taken, and how it was organised, clearly formed a significant part of these endowments' overall investment strategy. However he observed that there had been almost no discussion about the need to maximise returns or minimise risk - or what might be acceptable levels for each. It was clear that there could be significant differences in risk tolerance within the charitable community. However the nature of endowments (and their varying ambitions for permanence) meant that the present variety of Foundation investment strategies may continue for many years as opposed to the convergent trends in the management of pension and insurance funds. Next meeting: Seminar 2 will be held on Monday 12th September 2005 at 3.30 p.m. Chairman: Mr Jeremy Hardie Speakers: Professor Elroy Dimson (London Business School) Mr Geoff Singleton (Hymans Robinson) Subject: Risk: what are the components of risk; how does an endowment decide what is an appropriate level of risk for it to accept, and how does that feed into its investment strategy? ASSOCIATION OF BRITISH INSURERS: DISCLOSURE GUIDELINES ON SOCIALLY-RESPONSIBLE INVESTMENT 1. Background and introduction Public interest in corporate social responsibility has grown to the point where it seems helpful for institutional shareholders to set out basic disclosure principles, which will guide them in seeking to engage with companies in which they invest. In drawing up guidelines for this purpose they are mindful of statements made at multilateral level through the Guidelines for Multinational Corporations published in 2000 by the Organisation for Economic Cooperation and Development, as well as by the European Union and UK Government. These, coupled with legal disclosure obligations on UK pension funds and local authority investments, point to clear responsibilities both for companies and for institutions that invest in them. Institutional shareholders are also anxious to avoid unnecessary prescription or the imposition of costly burdens, which can unnecessarily restrict the ability of companies to generate returns. Indeed, by focusing on the need to identify and manage risks to the long and short-term value of the business from social, environmental and ethical matters, the guidelines highlight an opportunity to enhance value through appropriate response to these risks. It is not the intention of these guidelines to set a limit on the amount of information companies should provide on their response to social, environmental and ethical matters. Some shareholders with specific ethical investment objectives may seek more specific information. Some companies may choose to make additional information available in order to enhance their appeal to investors. The ABI hopes that in elaborating these guidelines it will provide a helpful basic benchmark for companies seeking to develop best practice in this area. 2. The Disclosure Guidelines The guidelines take the form of disclosures, which institutions would expect to see included in the annual report of listed companies. Specifically they refer to disclosures relating to Board responsibilities and to policies, procedures and verification. With regard to the board, the company should state in its annual report whether: 1.1 The Board takes regular account of the significance of social, environmental and ethical (SEE) matters to the business of the company. 1.2 The Board has identified and assessed the significant risks to the company's short and long term value arising from SEE matters, as well as the opportunities to enhance value that may arise from an appropriate response. 1.3 The Board has received adequate information to make this assessment and that account is taken of SEE matters in the training of directors. 1.4 The Board has ensured that the company has in place effective systems for managing significant risks, which, where relevant, incorporate performance management systems and appropriate remuneration incentives. With regard to policies, procedures and verification, the annual report should: 2.1 Include information on SEE-related risks and opportunities that may significantly affect the company's short and long term value, and how they might impact on the business. 2.2 Describe the company's policies and procedures for managing risks to short and long term value arising from SEE matters. If the annual report and accounts states that the company has no such policies and procedures, the Board should provide reasons for their absence. 2.3 Include information about the extent to which the company has complied with its policies and procedures for managing risks arising from SEE matters. 2.4 Describe the procedures for verification of SEE disclosures. The verification procedure should be such as to achieve a reasonable level of credibility. Towards best practice Institutional shareholders consider that adherence to the principles outlined above will help companies to develop appropriate policies on corporate social responsibility. The principles should also provide a constructive basis for engagement between companies and their shareholders. Over time this will allow both parties jointly to develop a clear joint understanding of best practice in the handling of social environmental and ethical matters which will help preserve and enhance value. It is the intention of the ABI to continue regular contact with companies and stakeholders with a view to refining the concept of best practice. Current understanding of best practice leads to the following conclusions and indications as to how the guidelines should operate: 1. The guidelines are intended to apply to all companies, including small and medium companies. 2. The cost of managing risks should be proportionate to their significance. Ideally, procedures should be integrated into existing management structures and systems. 3. Statements relating to the guidelines should be made in the annual report, and not separately as part of the summary accounts or on a web site dedicated to social responsibility. In view of the close philosophical linkage between these guidelines and Turnbull reporting, it would make sense to include a brief statement in the Internal Control section of the annual report, although this would not preclude a cross reference to other parts of the report where more detailed disclosure of the type of risks involved and systems for managing those risks may also fit with other content. 4. With regard to the implementation, shareholders are anxious to leave leeway for companies to establish their own systems best suited to their business. However, they believe that, with regard to clause 1.1, best practice would require the full Board to consider the issues on a regular basis, although some on-going detailed work might be delegated to a committee. Disclosure should include a brief description of the process undertaken by the Board for identifying significant risks and indicate which risks are the most significant in terms of their impact on the business. 5. Examples of initiatives for reducing and managing risks(see 1.4 and 2.2) include regular contact with stakeholders and mechanisms to ensure that appropriate standards are maintained in the supply chain. Evidence of such initiatives would be viewed positively by shareholders. 6. Reporting on performance over time in complying with policies to reduce risk will help shareholders monitor improvement in compliance. 7. Independent external verification of SEE disclosures would be regarded by shareholders as a highly significant advantage. Credible verification may also be achieved by other means, including internal audit. It would assist shareholders in their assessment of SEE policies if the reason for choosing a particular method of verification were explained in the annual report. Appendix 1 Questions on social, environmental and ethical matters Disclosure could be addressed by response in the annual report to the following questions: 1. Has the company made any reference to social, environmental and ethical matters? If so, does the board take these regularly into account? 2. Has the company identified and assessed significant risks and opportunities affecting its long and short term value arising from its handling of SEE matters? 3. Does the company state that it has adequate information for identification and assessment? 4. Are systems in place to manage the SEE risks? 5. Are any remuneration incentives relating to the handling of SEE risks included in risk management systems? 6. Does Directors' training include SEE matters? 7. Does the company disclose significant short and long term risks and opportunities arising from SEE issues? If so, how many different risks/opportunities are identified? 8. Are policies for managing risks to the company's value described? 9. Are procedures for managing risk described? If not, are reasons for non-disclosure given? 10. Does the Company report on the extent of its compliance with its policies and procedures? 11. Are verification procedures described? Appendix 2 Questions for investment trusts 1. Is the voting policy of the trust publicly available? 2. Does the voting policy make reference to SEE matters? 3. Is the manager encouraged actively to engage with companies to promote better SEE practice? University of Bristol Ethical Investment Motion This Union notes: 1. That British universities hold over forty million shares in arms companies. This university has 69,250 shares in Smith-Group plc and Rolls-Royce plc, comprising approximately 1.17% of the university's endowment fund. Both are major arms exporters, that fuel world conflict, for example; i) Rolls Royce engines power Hawk-jets that are currently been sold to some of the worlds biggest human rights abusers including Zimbabwe and Colombia; ii) Smiths Group produce missile trigger systems, and components for the Lochheed Martin F-16, that have both been used by Israel to attack Palestinians in the Occupied Territories. 2. That Bristol University has Fair Trade status but has no policy regarding the ethical-investment of university assets. 3. That socially-responsible investment is growing rapidly and is supported by over 75% of UK adults. 4. That a growing number of universities have successful ethical-investment policies, including Birmingham, East Anglia and several Oxbridge colleges. 5. That the university pensions and assurance scheme currently employs independent advisors to determine investment policy and that there are a wide range of ethical-investment advisors and financial-service providers available. 6. That the University's investment managers are legally required to seek the best return and that; i) academic research shows that ethical-investment funds perform as well as, and often better than, unscreened equivalents; ii) the average ethical fund has grown 74.84%, against 62.23% for index trackers and 54.26% for the FTSE 100, over the last 10 years. 7. That this Union has policy prohibiting the promotion or advertisement of specific corporations including Esso based on ethical assessments, but has no ethical-investment policy. This Union believes that: 1. This university invests in companies engaging in activities detrimental to society and the environment. 2. As a major public sector investor and Fair Trade institution, this university has a moral responsibility to ensure its investments do not negatively affect society or the environment. 3. The university's ethical-investment stance is an important element in its reputation among the wider community, current and potential staff, students and stakeholders. 4. That this Union should lead by example. This Union resolves: 1. To mandate the Student Union Vice-President to lobby the University to: i) commission an independent ethical audit of its present investments; ii) disinvest in Rolls Royce plc, Smith Group plc, and any other companies considered by independent specialists to be incompatible with ethical-investment; iii) adopt an ethical-investment policy that includes a prohibition on investments in the arms industry and is guided by the results of the ethical audit. 2. To mandate the Student Union President to lobby the Joint Unions Committee to support the objectives described in point 1. 3. To lead by example and adopt an ethical-investment policy for this union, ensuring that UBU's own investment policies remain at least as ethical as those demanded of the University. 4. To mandate the Vice-President to take responsibility for developing this ethical-investment policy in consultation with independent ethical-investment advisors. Offers certified investment management analyst with a product or service that delivers compare money managers and corporate finance services.

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This is simply amazing. Offers certified investment management analyst with a product or service that delivers compare money managers and corporate finance services. ACA QUESTIONS MYNERS REVIEW ANALYSIS AND ROLE OF PENSION SCHEMES AS SOURCE FOR MORE VENTURE CAPITAL The ACA has welcomed the objectives of the Myners Review consultation, to explore the factors that guide institutional investment, to maximise the efficient use of capital and to minimise distortions in the investment process. However, the ACA says the consultation paper has at its roots an implication that there are certain problems in the Institutional Investment 'market' and that therefore there is a need for a wide range of solutions. In its response, the ACA questions in the area of pension funds and their investments whether this is a valid analysis and whether further government intervention, through presumably further regulation and legislation, is likely to be helpful. The ACA accepts that US institutional investment in venture capital is maybe two to three times greater than in the UK - a far smaller disparity than the figure of ten times as much quoted by Myners. The ACA also queries the way that returns on private equity funds are calculated: often ignoring fees and low yielding cash reserves. The ACA asks whether pension funds, whose prime purpose is to provide secure retirement pensions for millions of our citizens, should be encouraged to invest more heavily in venture capital than they at present do. There seems to be little evidence of inadequate supply of venture capital from other sources, instanced by the recent ease with which 'e-commerce' businesses raised capital, ahead of the general collapse in values. Rather, there seems to be more evidence of a shortage of good venture capital projects to invest in. In such an environment, the ACA queries encouraging pension schemes and their trustees (and members) to increase their involvement in this market given the clear risks involved and the generally poor returns experienced. The ACA submission adds that it is particular difficulty for pension schemes to invest in venture capital and start-up equity ventures as this does not fit in easily either with pension scheme liabilities or trustees' responsibilities in law. There is an increasing awareness of the need to understand risk by pension fund trustees, and perhaps a trend towards further risk aversion. There are many components to this - short term funding tests (MFR) and the generally weakened financial position of schemes in the UK - being just two examples. 'These pressures do not make it likely that more trustees will consider venture capital, especially as they have a wide choice of other asset categories', says the ACA submission. The one trend, says the ACA, which may lead to higher venture capital investment is the increasing use of a cautious approach to a core part of scheme assets, coupled with an aggressive approach to a "satellite" segment, with a higher known acceptable risk element for the satellite. However, the key point omitted from the consultation paper is that the Trustees of defined benefit schemes are investing assets to meet the defined benefit liabilities, which underpin the pension 'promise' made. Trustees need to understand the risks that are being taken and be satisfied that these are commensurate with their schemes' and sponsoring employers' circumstances. The ACA highlights the crucial role of Consulting Actuaries in this area, adding that "fund managers are not in the best position to advise on asset allocation". The ACA says the scope for defined contribution investment in venture capital is not clear. The perceptions of risk may be too great, and the problems of lack of understanding, time, liquidity and transactional issues are more acute. 'We conclude, therefore, that it is unlikely trustees would wish to promote Venture Capital funds to any great extent within defined contribution schemes'. The ACA adds that increasing maturity will reduce the proportion of pension funds wishing to have a significant proportion of assets with an associated medium or high risk. 'This has not been the main factor preventing venture capital investment in the past, but will reduce the number of pension funds considering such investment in the future'. Myners asks whether Trust Law provides an appropriate basis for pension scheme governance and in particular investment decisions. The ACA points out that this was examined recently in great detail by the Pension Law Review Committee prior to the Pensions Act 1995. That review concluded that the trust based structure is well developed and that change was not desirable. The ACA says, "the evidence brought forward by our members suggests the current system works well, and there is scant evidence that any alternative would necessarily work better." On the role of investment consultants, the Myners review correctly says that Trustees rely heavily on professional advice on investment issues. This does not seem inappropriate. Indeed, it would be surprising and disturbing if Trustees did not seek and take professional advice in these important areas, particularly given their need to comply with requirements under Financial Services and Pensions Act legislation. The ACA also says that it does not agree that the fund manager industry is overly concentrated. True, there are a handful of particularly large players, but there is also a growing number of significant medium/large managers, and also many inventive smaller fund managers. Their growth is being fostered by the move of more schemes to appoint specialist managers to run segments within their overall investment strategy. On MFR, the ACA says this does not itself directly control investment policy, but schemes without a significant margin over 100% MFR will be less willing to adopt an investment policy which increases the risk of failing MFR. 'This is entirely consistent with the trustees' responsibility to invest in a manner that will ensure that members' benefits can be paid'. For a copy of the ACA response click on 'Policy Statements' then 'Aug 2000' It is vitally important that investment is maintained in the places in which children and adults learn and the equipment which supports them. This investment aims to ensure the Department meets its objectives. We are keen that more use be made of the education and skills estates and are working towards better and more joined up services across sectors to support different types of learning and to promote learning centres as hubs of their local communities. The Department delivers almost all of its services through local education authorities (LEAs) and Non-Departmental Public Bodies (NDPBs), notably the Learning and Skills Council (LSC) and the Higher Education Funding Council for England (HEFCE). Local managers of schools, colleges and universities have considerable freedom to manage their own budgets, but we work with them to ensure that they achieve good value for money. The current Departmental Investment Strategy (DIS), covering the period 2003-04 to 2005-06, published in December 2002, has a number of themes which will run through our investment: " Modernisation to allow institutions to deliver learning in the 21st Century. " Rationalisation to allow institutions to support our aims more efficiently, providing good value for money. Details of the Department's capital spending for the period 1998-99 to 2002-03 and our plans for 2003-04 to 2005-06 are set out in Annex C. The Department will increase capital investment, with spending rising from £3.2 billion in 2002-03 to £4.2 billion in 2003-04, £5 billion in 2004-05 and £5.7 billion in 2005-06. Sure Start (including Early Years Education and Childcare) Services for young children and their families promote the physical, intellectual and social development of young children particularly those who are disadvantaged and play a vital part in giving them the best possible start in life, helping to narrow the achievement gap in later years. " All 524 Sure Start local programmes are now up and running. " The Early Excellence Centre programme has built a network of good practice in the delivery of integrated early years services. " The Neighbourhood Nurseries initiative is substantially expanding day care in disadvantaged areas. There are 1,073 Neighbourhood Nurseries now open, providing over 36,000 places. The 2002 Spending Review settlement provided a more than doubling in childcare spending by 2006: " the establishment of integrated children's centres in disadvantaged areas providing good quality childcare with early education, family and health; and " the creation of additional 250,000 new childcare places in children's centres and elsewhere. The 2004 Budget statement signalled a further increase in investment in the early years. " There will be £669 million additional funding for Sure Start by 2007-08 compared with 2004-05, an average annual real growth rate of over 17 per cent. This will support 100,000 childcare places by 2008, (many of which will be in primary schools), with a particular focus on areas of disadvantage, and the commitment that by that year all the 20 per cent most disadvantaged wards will be covered by a network of 1,700 children's centres. Schools Since 1997, substantially increased capital support has enabled schools to address the backlog of building needs built up through years of under-funding. All schools now receive direct capital funding for their building needs, as well as the funding that is allocated to LEAs. Overall, direct capital funding for investment in school buildings, including PFI credits, was £3.8 billion in 2003-04, rising to £4.5 billion in 2004-05 and over £5 billion in 2005-06. In 2004-05, a typical secondary school will receive direct capital funding of around £85,000 and a typical primary school around £25,000. Schools will, from 2004-05, be able to use this money for investment in ICT equipment as well as buildings. We aim to support the move from an incremental approach to improving school buildings to making a step change that reflects a strong educational vision, meets the needs of all users of the school, and will have a deep and lasting impact. Therefore in July 2003, after wide consultation, the new Building Schools for the Future (BSF) programme was launched to renew all secondary schools in England in a ten to fifteen year period from 2005-06, subject to future public spending decisions. BSF will reform the way that capital funding is allocated, that schools are designed and that school buildings are procured. All authorities were invited to apply for funding in the first wave of projects, or to express interest for later prioritisation. In February 2004, a total of £2.2 billion of funding, including PFI credits, was allocated to the first wave of 19 authorities, including six pathfinder authorities, prioritised on educational and social need, and on educational vision and capacity to deliver. Future prioritisation is aimed to be on educational and social need, and we do not anticipate requiring further information from authorities for announcements of wave 2 and 3 prioritisation later in 2004. We will also continue to address the renewal of the secondary school estate by expanding the number of Academies. These are publicly-funded independent schools which offer a broad and balanced curriculum with a specialist focus in one or more areas. There were 12 Academies opened by September 2003 and there are a further 33 in development. We aim to have 53 open by 2007. In 2003-04 and 2004-05, we have allocated exceptionally high levels of formulaic funding to authorities to enable them to address their priority backlog of need. From 2005-06, we expect the bulk of capital funding (almost £3 billion in 2005-06) to continue to be allocated by formula to schools and authorities to support the needs of their primary and secondary schools not prioritised in BSF. Research shows that ICT has a positive impact on pupil attainment and motivates, stimulates and engages them. Investment in ICT has improved computer to pupil ratios to 1:7.9 in primary and 1:5.4 in secondary schools at April 2003 and over 99 per cent of schools have been connected to the Internet since April 2002. At December 2003, 49 per cent of schools were connected to the Internet at broadband speeds. In December 2003, we significantly enhanced the search and browse functions of Curriculum Online. This makes sourcing resources quicker and easier. We currently have nearly 1,000 suppliers and continue to add both resources and subjects. The British Educational Communications and Technology Agency (Becta) concluded a landmark deal with Microsoft to achieve significant reductions in the cost of a wide range of Microsoft licenses for all schools. A memorandum of understanding was signed in December 2003 which would achieve total estimated cash savings to schools over three years of £46 million. From January 2004, there is easier access to the lowest cost licensing option for schools, which is potentially more advantageous to smaller primary schools. Supporting Young People, Further Education and Wider Post-16 Learning Further Education Investment in the further education (FE) estate has attracted more students and increased college credibility with local employers. It underpins the achievement of Public Service Agreement (PSA) targets relating to participation in Modern Apprenticeships, tackling the basic skills deficit and reducing the number of adults who lack Level 2 qualifications. The size of the FE estate continues to diminish, as space is used more effectively. The ICT infrastructure is improving, through the development of the National Learning Network, which links all FE colleges to the Internet via the Joint Academic Network (JANET). Increased capital investment is an essential part of our strategy to transform standards in education and to engage disadvantaged pupils in learning. Investment in the adult and community learning sector and in UK online will play an increasingly important role in promoting basic skills. Capital investment in the post-16 learning and skills sector will rise to over £400 million by 2005-06. Priority will be given to rationalise and modernise the FE estate, allowing colleges to focus on their strengths; enable an increase in the provision of dedicated/distinct provision for 16-19 learning; and to ensure that resources are used effectively in collaboration with capital investment in schools (including school sixth forms funded via local education authorities). The engagement of employers is crucial in this sector and investment will help to update vocational training facilities. To assist in this process 400 Centres of Vocational Excellence (CoVEs) will be established by 2005-06. They will focus on enhancing the employability of new entrants, on developing the skills of those in work and on enhancing the employment prospects of those seeking work (including self employment). Higher Education Investment in the higher education (HE) estate will play an important part in encouraging young people into HE and reducing non-completion rates. A modern estate will be needed if we are to achieve the Public Service Agreement (PSA) target to increase participation in HE towards 50 per cent of 18- to 30-year-olds by 2010. Investment since 2000 has also improved the infrastructure for ICT and e-learning in the sector. The Government is committed to enhancing excellence in higher education research, essential to realise our aspirations for science and innovation. It is vital for the productivity and economic well-being of the country that our universities are able to compete with the best international institutions. This requires the long-term sustainability of our research base. The investment in universities' infrastructure through the Science Research Investment Fund (SRIF) will increase to £500 million a year by 2004-05, of which £200 million will be from this Department. Significant sums will also be invested in the wider HE estate. We will continue the work with the Office of Science and Technology, Higher Education Funding Council for England (HEFCE), other government departments and key stakeholders to ensure the successful implementation of Full Economic Costing (FEC) in universities in September 2005, in order that they can recover the full costs of their research activities. Public-Private Partnerships/Private Finance Initiatives Public Private Partnerships (PPPs) and Private Finance Initiatives (PFI) have become well-established procurement methods for the construction of new schools and the refurbishment of existing ones. There are 67 signed contracts in the schools sector covering over 632 schools, with a total value of £1.8 billion. Services have started in over 41 projects with more than 100 new or substantially refurbished schools open. In addition, 36 school projects have been approved by the Project Review Group (PRG) and are in procurement. The total capital value for the building projects is over £1.8 billion and they involve more than 300 schools. A further nine projects covering some 80 schools have been prioritised for support by the Department. There are 14 signed projects in the FE sector and 12 in the HE sector. They include complete campus relocation, sport and leisure facilities for college and community use and provision of state-of-the-art ICT facilities. The Building Schools for the Future (BSF) programme to rebuild or refurbish every secondary school in England launched in February 2004 will represent £2.2 billion of capital investment for 2005-06 (of which at least £1.2 billion is PFI credits). The first wave of this programme includes 17 authorities with an estimated 180 schools benefiting. Investment through PFI generally focuses on major modernisation of premises through the replacement or substantial improvement of existing schools, increasingly as part of wider rationalisation projects. In the future, we are looking to make PFI more flexible so that it can more easily support smaller projects. Following consultation with various public and private sector bodies, the Treasury has decided to make a small number of changes to Standardisation of PFI contracts (SoPC). In 2001-04, PFI credits will be approximately 25 per cent of the total capital available to schools. This is a significant resource for LEAs to assist them in delivering their asset management planning objectives, and by improving school buildings, providing an environment that supports improved educational standards. PFI credits availability is enabling more strategic asset utilisation across all LEAs and creating wider benefits. Many projects, in addition to addressing the core issues of sufficiency, condition and suitability, also emphasise other priorities such as increasing community use, improving special educational needs (SEN) and early years provision and linking to Education Action Zones (EAZs) and Excellence in Cities (EiC). Following the success of the Dudley Grid for Learning project, which used PFI to provide ICT for schools across Dudley LEA, the use of PFI to procure ICT for schools is being expanded. Four ICT projects have been approved and are on procurement with a capital value of £45.45 million. Invest to Save The Invest to Save Budget funds innovative projects, which bring together two or more bodies to deliver better public services. In Round 6 of The Treasury's Invest to Save Budget, the Department and its external partners were allocated just over £458,000 over three years starting 2004-05 to fund the Stay Safe Stay Put project, which aims to reduce the incidences of running away amongst young people in Warrington. Capital Modernisation Fund The Capital Modernisation (CMF) was a cross-government fund which supported innovative capital projects. The Department is currently monitoring and evaluating a number of projects that are now coming to an UNIVERSITY OF WALES SWANSEA STATEMENT OF INVESTMENT PRINCIPLES Introduction Purpose of statement: This statement sets out the principles governing decisions about the investment of the University's endowment funds. Approval: The statement was approved by the Council on 9th July 2001 and amended on 22nd March 2004. Investment Powers: The investment powers of the University are set out in paragraph 4 of Statute 16 (Powers and Duties of the Council) as follows: 'To invest any monies belonging to the University of Wales Swansea, including any unapplied income in such stock, funds, shares or securities as it shall from time to time think fit, whether authorised by the general law for the investment of trust monies or not and whether within or outside the United Kingdom or in the purchase of freehold, or leasehold hereditaments in the United Kingdom, including rents with the like power of varying such investments from time to time.' Choosing Investments Process for choosing The University has appointed an investment Investments: manager to manage the investment of its endowment funds. Investment Policy: The long run objective of the investment policy is to maintain the value of the endowment funds in real terms (i.e. to match inflation as measured by the Retail Price Index, the increase in academic salaries and other relevant indicators) and to take all further gains as income. In order to meet the objective, the University has determined the following range of asset split: Cash 0% to 7% Fixed interest 20% to 40% Equities 53% to 80% Within the equity allocation, overseas holdings should normally be held within the range 5% to 15%. - 2 - New Investments: The investment manager may invest in the following: Sovereign Debt or stock guaranteed by Governments as to income and capital. Other high grade securities such as selected Bonds and Eurobonds within the Standard and Poors credit rating of A or higher, whilst maintaining a minimum of 50% in AA or higher rated securities. Authorised Unit and Investment Trusts. Any company listed in the FT Actuaries 350 Share Index or their equivalents from those overseas markets considered suitable for investments. The investment manager will bring to the University's attention any new category of investment which, in their judgement, has become suitable for investment, before investing in that category. Realisation of investments: The investment manager will bring to the University's attention any category of investment held by the University which in their judgement has become unsuitable for the University. The investment manager is not expected to bring to the University's attention individual investments realised on purely investment grounds. Delegation to Investment The appointment of the investment manager is on a Manager: discretionary basis. This means that the investment manager accepts responsibility on a continuing basis for taking investment action as and when appropriate in accordance with the investment policy. Performance objective: The performance objective is to match on a three year rolling basis, a composite index recording total returns (i.e. capital plus income) constructed as follows:- FT Actuaries Government Securities Index 30% FT Actuaries 350 Share Index 60% FT Actuaries World Index 10% Socially responsible investment: The University will notify the investment manager of any sector/company in which it does not wish to invest on social, environmental or ethical grounds. At the present time the University prohibits investment in tobacco producing companies. - 3 - Diversification Risk: The University will accept a 'medium' level of risk on the scale operated by the investment manager. No holding in the fund will have a weighting in excess of 5% on purchase, without prior consultation with the University. Should the holding grow to more than 10% of the fund by capital appreciation, it will normally be reduced. Manager controls: In exercising the responsibilities delegated to them and meeting their performance objectives, the investment manager is required to adhere to this statement. The manager will also ensure that suitable internal operating procedures are in place to control individuals making investments on behalf of the University. Compliance Frequency of review: The University will review the investment manager on an annual basis to confirm that the manager: " has the appropriate knowledge and experience " is carrying out his/her work competently " has had regard to the need for diversification of investments " has had regard to the suitability of each investment and each category of investment " has been exercising his/her powers of investment with a view to giving effect to the principles contained in this statement " has met the performance objectives Information from managers: The investment manager will inform the University immediately of: " any breach of this statement " any serious breach of internal operating procedures " any material change in the knowledge and experience of those involved in managing the University's investments - 4 - The investment manager will supply the Trustees with sufficient information every six months to facilitate the review of their activity, including: " a report of the strategy followed during the six months " the rationale behind past and future strategy " a full valuation of assets " a transaction report " a cash reconciliation " a comparison with the performance objective Export and Investment Guarantees Act 1991 CHAPTER 67 ARRANGEMENT OF SECTIONS PART I POWERS OF ECGD Section 1. Assistance in connection with exports of goods and services. 2. Insurance in connection with overseas investment. 3. Financial management. 4. Provisions supplementary to sections 1 to 3. 5. Provision of services and information. 6. Commitment limits. 7. Reports and returns. PART II TRANSFER OR DELEGATION OF ECGD FUNCTIONS 8. Scheme of transfer. 9. Transferred staff. 10. Vehicle companies. 11. Reinsurance. 12. Delegation of assistance function. PART III GENERAL 13. The Export Credits Guarantee Department and the Export Guarantees Advisory Council. 14. Expenses. 15. Short title, interpretation, commencement, etc. SCHEDULE: -Scheme of transfer: Supplementary provisions. ELIZABETH II Export and Investment Guarantees Act 1991 1991 CHAPTER 67 An Act to make new provision as to the functions exercisable by the Secretary of State through the Export Credits Guarantee Department; and make provision as to the delegation of any such functions and the transfer of property, rights and liabilities attributable to the exercise of any such functions. [22nd October 1991] BE IT ENACTED by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows- PART I POWERS OF ECGD Assistance in connection with exports of goods and services. 1. - (1) The Secretary of State may make arrangements under this section with a view to facilitating, directly or indirectly, supplies by persons carrying on business in the United Kingdom of goods or services to persons carrying on business outside the United Kingdom. (2) The Secretary of State may make arrangements under this section for the purpose of rendering economic assistance to countries outside the United Kingdom. (3) The Secretary of State may make arrangements under this section with a view to facilitating- (a) the performance of obligations created or arising, directly or indirectly, in connection with matters as to which he has exercised his powers under this section or section 2 of this Act, or (b) the reduction or avoidance of losses arising in connection with any failure to perform such obligations (4) The arrangements that may be made under this section are arrangements for providing financial facilities or assistance for, or for the benefit of, persons carrying on business; and the facilities or assistance may be provided in any form, including guarantees, insurance, grants or loans. Insurance in connection with overseas investment. 2. - (1) The Secretary of State may make arrangements for insuring any person carrying on business in the United Kingdom against risks of losses arising- (a) in connection with any investment of resources by the insured in enterprises carried on outside the United Kingdom, or (b) in connection with guarantees given by the insured in respect of any investment of resources by others in such enterprises, being enterprises in which the insured has any interest, being losses resulting directly or indirectly from war, expropriation, restrictions on remittances and other similar events. (2) The Secretary of State may make arrangements for insuring persons providing such insurance. (3) References in subsection (1) above to a person carrying on business in the United Kingdom and to the insured include any company controlled directly or indirectly by him. Financial Management. 3. - (1) The Secretary of State may make any arrangements which, in his opinion, are in the interests of the proper financial management of the ECGD portfolio, or any part of it. (2) In pursuance of arrangements under this section the Secretary of State may enter into any form of transaction, including- (a) lending, and (b) providing and taking out insurance and guarantees. (3) The Secretary of State may not, in pursuance of such arrangements, enter into any transaction for the purpose of borrowing money but, subject to that, he is not precluded from entering into any transaction by reason of its involving borrowing. (4) In pursuance of such arrangements the Secretary of State may- (a) alter any arrangements made under section 1 or 2 of this Act or the old law or make new arrangements in place of arrangements so made, or (b) make further arrangements in connection with arrangements so made. (5) Arrangements under this section may be made in anticipation of further rights being acquired or liabilities being incurred by the Secretary of State. (6) In this section the "ECGD portfolio" means the rights and liabilities to which the Secretary of State is entitled or subject by virtue of the exercise of his powers under this Act or the old law or in consequence of arrangements made in the exercise of those powers. (7) The Secretary of State may certify that any transaction he has entered into or is entering into has been or, as the case may be, is entered into in the exercise of the powers conferred by this section and such a certificate shall be conclusive evidence of the matters stated in it. Provisions supplementary to sections 1 to 3. 4. - (1) Transactions entered into in pursuance of arrangements made under sections 1 to 3 of this Act may be on such terms and conditions as the Secretary of State considers appropriate. (2) The powers of the Secretary of State under those sections are exercisable only with the consent of the Treasury and such consent may be given in relation to particular cases or in relation to such descriptions of cases as may be specified in the consent. (3) In those sections- (a) "business" includes a profession, (b) "guarantee" includes indemnity, (c) references to persons carrying on business, in relation to things done outside the United Kingdom, include persons carrying on any other activities, and (d) references to things done in or outside the United Kingdom are to things done wholly or partly in or, as the case may be, outside the United Kingdom. (4) References in this and those sections to the United Kingdom include the Isle of Man and the Channel Islands. Provision of services and information. 5. The Secretary of State may provide to any person- (a) information relating to credit or investment insurance, (b) services ancillary to the provision by that person of credit or investment insurance, and (c) such other goods or services as may be specified in an order under this section, and may make such charges for doing so as he may determine. (2) The power to make an order under this section is exercisable only with the consent of the Treasury. Commitment limits. 6. - (1) The aggregate amount of the Secretary of State's commitments at any time under arrangements relating to exports and insurance shall not exceed - (a) in the case of commitments in sterling, £35,000 million, and (b) in the case of commitments in foreign currency, 15,000 million special drawing rights. (2) In subsection (1) above, "arrangements relating to exports and insurance" means- (a) arrangements under section 1 or 2 of this Act, other than arrangements for giving grants or arrangements under section 1(3), and (b) arrangements under the old law, other than arrangements for giving grants. (3) The aggregate amount of the Secretary of State's commitments at any time under section 3 of this Act shall not exceed- (a) in the case of commitments in sterling, £1 5,000 million, and (b) in the case of commitments in foreign currency, 10,000 million special drawing rights. (4) The Secretary of State may by order increase or further increase - (a) either of the limits in subsection (1) above by a sum specified in the order not exceeding £5,000 million or, as the case may be, 5,000 million special drawing rights, (b) either of the limits in subsection (3) above by a sum specified in the order not exceeding £3,000 million or, as the case may be, 2,000 million special drawing rights, but the Secretary of State shall not in respect of any limit exercise the power on more than three occasions. (5) For the purposes of this section and section 7 of this Act- (a) the commitments of the Secretary of State under any arrangements are his rights and liabilities relating to the arrangements, (b) the amount of any commitments shall be ascertained in accordance with principles determined from time to time by the Secretary of State with the consent of the Treasury, (c) "foreign currency" means any currency other than sterling, including special drawing rights and any other units of account defined by reference to more than one currency, (d) whether any commitments are in sterling or foreign currency is to be determined by reference to the currency in which the amount of the commitments is measured (rather than the currency of payment) but, if the commitments are expressed to be subject to a sterling or foreign currency limit, the commitments are to be taken to be in sterling or, as the case may be, foreign currency, and (e) the equivalent in special drawing rights of the amount of any commitments in foreign currency shall be ascertained at intervals determined from time to time by the Secretary of State with the consent of the Treasury and in accordance with principles so determined. (6) A determination under subsection (5)(e) above may provide for leaving out of account for the purposes of the limit in subsection (1)(b) or (3)(b) above any amount by which the limit would otherwise be exceeded to the extent that the amount is attributable to- (a) a revaluation of commitments under subsection (5)(e) above, or (b) the fulfillment of an undertaking which, had it been fulfilled when given, would not have caused the limit to be exceeded. (7) Any power to make an order under this section is exercisable only with the consent of the Treasury. Reports and Returns. 7. - (1) The Secretary of State shall prepare an annual report on the discharge of his functions under sections 1 to 5 of this Act. (2) The Secretary of State shall prepare, as soon as practicable after 31st March in each year, a return showing separately the aggregate amounts of the commitments in sterling and in foreign currency on that date for the purposes of the limits in section 6(1) and (3) of this Act. (3) Any return under this section may also give such further information as to the amounts of his commitments for the purposes of those limits as the Secretary of State may determine for that return. (4) The first return under this section shall be prepared as soon as practicable after 31st March 1991. (5) Reports and returns prepared under this section shall be laid before Parliament. PART II TRANSFER OR DELEGATION OF ECGD FUNCTIONS Scheme of transfer. 8. - (1) The Secretary of State may make a scheme or schemes for the transfer to any person or persons of such property, rights and liabilites as are specified in or determined in accordance with the scheme, being property, rights or liabilites- (a) to which the Secretary of State (or, in the case of copyright, Her Majesty) is entitled or subject immediately before the day on which the scheme providing for the transfer comes into force, and (b) which then subsisted for the purposes of or in connection with or are otherwise attributable (wholly or partly) to the exercise of functions under Part I of this Act or the old law. (2) Without prejudice to the generality of subsection (1)(b) above, any property, rights or liabilities shall be taken to fall within that subsection if the Secretary of State issues a certificate to that effect. (3) A scheme under this section may apply- (a) to property wherever situated, and (b) to property, rights and liabilities whether or not otherwise capable of being transferred or assigned by the Secretary of State or, as the case may be, Her Majesty. (4) A scheme under this section shall come into force on such day as may be specified in, or determined in accordance with, the scheme; and on that day the property, rights and liabilities to which the scheme applies shall be transferred and vest in accordance with the scheme. (5) A scheme under this section may contain such supplementary, incidental, consequential or transitional provisions as appear to the Secretary of State to be necessary or expedient. (6) The Schedule to this Act (scheme of transfer: supplementary provisions) shall have effect. (7) References below in this Act to a transferee are to any person to whom anything is transferred by virtue of a scheme under this section. Transferred Staff S.I. 1981/1794. 9. - (1) No scheme under section 8 of this Act shall provide for the transfer of any rights or liabilities relating to a person's employment, but the Transfer of Undertakings (Protection of Employment) Regulations 1981 shall apply to the transfer of property, rights or liabilities by virtue of such a scheme whether or not the transfer would, apart from this subsection, be a relevant transfer for the purposes of those regulations. (2) Where, by reason of the operation of those regulations in relation to a transfer of property, rights or liabilities by virtue of such a scheme, a person ceases to be employed in the civil service of the State and becomes employed by a transferee- (a) he shall not, on so ceasing, be treated for the purposes of any scheme under section 1 of the Superannuation Act 1972 as having retired on redundancy, and (b) his ceasing to be employed in that service shall not be regarded as an occasion of redundancy for the purposes of the agreed redundancy procedures applicable to persons employed in that service. Vehicle companies. 10. - (1) In this section "vehicle company" means a company formed or acquired for the purpose of- (a) becoming a transferee, or (b) holding shares in a company formed or acquired for that purpose. (2) Subject to subsections (3) and (4) below, the Secretary of State may- (a) subscribe for or otherwise acquire shares in or securities of a vehicle company, or acquire rights to subscribe for such shares or securities, (b) by a direction given to a company formed or acquired for the purpose of becoming a transferee require it, in consequence of the transfer by virtue of a scheme under section 8 of this Act of property, rights or liabilities, to issue to him, or to such other person as may be specified in the direction, such shares or securities as may be so specified, (c) from time to time by a direction given to a vehicle company require it to issue to him, or to such other person as may be specified in the direction, such shares or securities as may be so specified, or (d) make loans to a vehicle company on such terms and conditions as he may determine. (3) A direction under subsection (2)(b) or (c) above may require any shares to which it relates to he issued as fully or partly paid up. (4) The Secretary of State shall not- (a) subscribe for or otherwise acquire shares in or securities of a vehicle company, or acquire rights to subscribe for such shares or securities, unless all the relevant shares are to be held by or on behalf of the Crown, or (b) at any time give a direction or make a loan to a vehicle company unless all the relevant shares are then held by or on behalf of the Crown. (5) For the purposes of subsection (4) above - (a) shares are held by or on behalf of the Crown where the Crown or any person acting on behalf of the Crown has a legal interest in them; and (b) "relevant shares", in relation to a vehicle company, means the issued shares of that company or, if it is a subsidiary of another vehicle company, the issued shares of that other company. (6) A scheme under section 8 of this Act may, as between any vehicle companies or as between a vehicle company and the Secretary of State, confer or impose rights and liabilities in connection with any of the matters as to which the Secretary of State may exercise his powers under this Act. (7) The Secretary of State shall not exercise any of the powers conferred by the preceding provisions of this section or dispose of any shares in or securities of a vehicle company without the consent of the Treasury. Reinsurance. 11. - (1) The Secretary of State may make arrangements with any transferee under which the transferee insures the Secretary of State against risks of losses arising in consequence of arrangements made, before the day on which any scheme under section 8 of this Act comes into force, under Part I of this Act or the old law. (2) The Secretary of State shall from time to time determine, in relation to such classes of risk determined by him as might be insured by him under section 1 of this Act, whether it is expedient in the national interest for him to exercise his powers under that section to make arrangements for reinsuring persons providing insurance for risks of that class. (3) This section is without prejudice to any power of the Secretary of State under Part I of this Act. Delegation of assistance function. 12. - (1) The Secretary of State may make arrangements for any of the functions to which this section applies to be exercised on his behalf by any transferee or any other person, instead of through the Export Credits Guarantee Department, on such terms and conditions as he may determine. (2) This section applies to the power of the Secretary of State to make arrangements under section 1 of this Act and to any functions of his under arrangements so made, or arrangements under the old law, including, so far as relating to any such arrangements, arrangements made by virtue of section 3(4) of this Act. (3) This section does not affect any requirement for the consent of the Treasury. PART III GENERAL The Export Credits Guarantee Department and the Export Guarantees Advisory Council. 13. - (1) All the functions of the Secretary of State under Part I of this Act, except the power to make orders under section 5 or 6 of this Act, shall be exercised and performed through the Export Credits Guarantee Department, which shall continue to be a Department of the Secretary of State. (2) There shall continue to be an Export Guarantees Advisory Council. (3) The function of the Council shall be to give advice to the Secretary of State, at his request, in respect of any matter relating to the exercise of his functions under this Act. (4) In exercising his duty under section 11(2) of this Act, the Secretary of State shall consult the Export Guarantees Advisory Council. Expenses. 14. - (1) Any sums required by the Secretary of State for making payments or for defraying his administrative expenses under this Act shall be paid out of money provided by Parliament and any sums received by the Secretary of State by virtue of this Act shall be paid into the Consolidated Fund. (2) If any sum required by the Secretary of State for fulfilling his liabilities under this Act is not paid out of money provided by Parliament, it shall be charged on and paid out of the Consolidated Fund. Short title, interpretation, commencement, etc. 1978 c.18. 15. - (1) This Act may be cited as the Export and Investment Guarantees Act 1991. (2) In this Act "the old law" means the Export Guarantees and Overseas Investment Act 1978 and any earlier enactment from which any provision of that Act was derived. (3) Any power to make an order under section 5 or 6 of this Act shall be exercisable by statutory instrument and no such order shall be made unless a draft of it has been laid before and approved by resolution of the House of Commons. (4) The Export Guarantees and Overseas Investment Act 1978 is repealed. (5) Subsection (4) above does not affect any power exercisable by the Secretary of State in respect of arrangements made under the old law. (6) This Act shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint and different days may be appointed for different provisions and for different purposes. SCHEDULE SCHEME OF TRANSFER: SUPPLEMENTARY PROVISONS Certificate of vesting 1. A certificate by the Secretary of State that anything specified in the certificate has vested on any day in any person by virtue of a scheme under section 8 of this Act shall be conclusive evidence for all purposes of that fact. Construction of agreements etc. 2. - (1) This paragraph applies to any agreement made, transaction effected or other thing (not contained in an enactment) which- (a) has been made, effected or done by, to or in relation to the Secretary of State, (b) relates to any property, right or liability transferred from the Secretary of State in accordance with the scheme, and (c) is in force or effective immediately before the day on which the scheme comes into force. (2) The agreement, transaction or other thing shall have effect on and after that day as if made, effected or done by, to or in relation to the transferee. (3) Accordingly, references to the Secretary of State which relate to or affect any property, right or liability of the Secretary of State vesting by virtue of the scheme in the transferee and which are contained - (a) in any agreement (whether or not in writing), deed, bond or instrument, (b) in any process or other document issued, prepared or employed for the purpose of any proceeding before a court or other tribunal or authority, or (c) in any other document whatever (other than an enactment) relating to or affecting any property, right or liability of the Secretary of State which vests by virtue of the scheme in the transferee, shall be taken on and after that day to refer to the transferee. Offers certified investment management analyst with a product or service that delivers compare money managers and corporate finance services. You will want to find out more information.