Issue - meetings

The report provides details of investments undertaken and the return achieved in the first eleven months of the current financial year.

The report of the Director of Finance and Transformation provided details of the investments undertaken and return achieved in the first eleven months of the current financial year.

A full list of investments held on 28 February 2025 was attached at Annex 1 to the report and a copy of the lending list at Annex 2.  In terms of cash flow and core cash investments, £2,808,970 was earned in interest to the end of February 2025, which had exceeded expectation when compared to the revised estimate for the same period.  The positive variance was primarily driven by the slower-than-anticipated reduction in the Bank Rate, which had resulted in sustained higher interest yields on deposits.  An extract from MUFG’s (Mitsubishi UFJ Financial Group, formerly Link Asset Services) latest benchmarking data was provided in the form of a scatter graph at Annex 3, which showed that as at 31 December 2024 the Borough Council’s return was 4.76%, in line with the local benchmarking group average of 4.75%.

With regard to long term investment, during the period 1 April 2024 to 31 December 2024, the £3.72m investment in property funds generated dividends of £118,040 which represented an annualised return of 4.21% compared to 3.65% in 2023/24.  The overall income from all property funds was expected to exceed the revised budget for the 2024/25 financial year by circa £39k. 

Following the termination of the Lothbury Property Trust, five payments had been received to-date totalling £1,276,520 of the initial investment.  Taking into account the dividends received in the sum of £379,040 since the fund’s inception up to February 2025, the breakeven point would be achieved with the recovery of £344,440 from the sale of outstanding assets which were expected to be finalised by June 2025.

In addition, being a small-value investment stakeholder in the Hermes Property Trust, the Council would have the shares realised and paid out upon successful completion of the merger of the Trust.

Under medium term investment, during the period April 2024 to February 2025, the £4.25m investment in multi asset funds generated dividends of £192,750, which represented an annualised return of 4.96%.

RESOLVED:  That

(1)          the Treasury Management position as at 28 February 2025, be noted; and

(2)          the current positions in respect of the Lothbury and Hermes Property Investment Funds, be noted.