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That meeting had discussed the possibility of attracting
grants towards a tree planting scheme around the site. There had
been some coniferous landscaping on site since the Shell days. What
was now being considered was the planting of deciduous trees as
shown on the map which would create an unbroken tree line around
the site.
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He sought the Committee’s views as to whether or not
it wanted to support such a proposal. The Council still hoped to
realise the value of this site for a potential development in the
future. There was an argument that landscaping would make it more
attractive to a potential buyer. On the other hand, it could also
shut out certain types of development for the future. Providing
trees would be one way of achieving the aims of the Trust since it
would be somewhere that the general public could use as a public
facility.
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There was the possibility of attracting 100% grant funding
for such landscaping. The next step would be to go back to the
Valuer that was advising the Council in order to ask for an
independent opinion as to whether this sort of development would
help or hinder a development in the long term.
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Members considered it premature to reach a decision today
and requested that a written report be provided by the Treasurer
once all information was to hand.
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RESOLVED to await a further report before reaching a
decision thereon.
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The Chairman extended a warm welcome to Mr.Gareth Watts,
Institutional Client Director, HSBC Global Asset
Management(UK)Ltd.
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Submitted - the HSBC Global Asset Management (UK) Ltd
Quarterly Report for the period up to 31st December, 2008.
Mr.Gareth Watts summarised the contents of a presentation document
that was handed out at the meeting.
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The Client Manager reported that the portfolio showed a
return for the period September to December, 2008 of -21.1% against
a benchmark of -22.2%. The closing value of the fund on 31st
December, 2008 was £11,439,918 compared to £11,726.035
at the end of September. There had therefore been a 1.5% loss
during this period. In Quarter 4, the portfolio value was doing
quite well against the benchmark. Although down it was not as low
as that envisaged.
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The Treasurer stated that the portfolio had done better
than expected. In view of the fact that the market had gone down
substantially, he was pleased to see the figures, in that the Trust
had only lost 1.5% of the valuation. The performance for the last
quarter and for the last year had been very good in his opinion
when compared with what was happening in the money market in
general.
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Mr.Schofield stated that although the figures were down,
the Trust had room to be grateful in that it was quite fortunate
compared to some.
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Mr.H.Eifion Jones was also satisfied with the figures. The
booklet presented gave an explanation as to why this had happened
as the portfolio was not based in the banking sector which had
experienced a major slump. There were also significant portfolio
changes in that it had gone into UK fixed interest bonds. As a
charity, the Trust was very interested in the value of its
property. However, he felt it important that the Trust did not lose
sight of any income being generated. Investment income at this time
in 2007 was £85,223 compared to £82,712 in 2008. It was
important that this be monitored since at the end of the day the
role of the Trust was to undertake its duty to organisations on the
Island.
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He considered it important to keep an eye on the income
and not just on the capital value. He hoped that by the next
meeting that there would be more information as regards investment
income and that it would also receive projections for this year.
Some companies would not be issuing dividends and that was why at
the last meeting he considered that the Trust should be looking at
Corporate and UK Government Bonds in order to keep the income
up.
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Mr.Schofield reminded members that the Constitution of the
Trust made it clear that priority should be given to trying to keep
the value of the investment. With the income coming down to this
level and capital naturally being responsible for that, he felt
that the Committee required a report to the next meeting in order
to provide guidance as to what the priorities should be. Were we
still going to be withdrawing money from the portfolio to the
degree that the Trust had been doing during this difficult time or
should the Trust be looking at its expenditure because it was going
to deplete the value of the original capital? He considered that
the Committee should be looking at the services it was financing at
the moment.
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The Treasurer in reply stated that at the last meeting
they were looking at the effect of the credit crunch on the
investment. The message he gave out at that time was that yes, the
capital value of the investment had reduced dramatically and that
he would wish it to recover. However, the investment income had not
reduced to the same degree. The annual income expenditure was
adequate to meet the annual expenditure.
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When being advised on the income, the Trust was advised
that £400k was a reasonable target to aim towards, which
enabled the Trust to finance its annual expenditure. Based on
today’s figures, there was no message that the Trust should
be cutting back. A meeting of the full Trust would be called in the
near future with the aim of setting the budget for 2009/10 and that
was where grant allocations would be determined.
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Mr.Schofield considered that it would be easier for this
Committee to discuss that report in detail prior to it being
discussed at full Trust.
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Mr.J.V.Owen reiterated what he had said at the last
meeting in that he was unhappy to see the Trust fund decreasing and
that he had suggested at the time that some of the capital returns
should be invested to take advantage of the volatile
markets.
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The Treasurer stated that the suggestion by Mr.J.V.Owen
was that perhaps the Trust did not need to spend all the income in
order to go for capital growth for the long term. In the past, the
Trust had adopted a policy of not going out to chase income. The
reason why part of the portfolio was in overseas markets was
because, firstly, the capital growth was bigger there and secondly
diversification in spreading the money over more markets. In
effect, the current policy foregoes short term income for long term
gain. The current policy acknowledged the argument put forward by
Mr.J.V.Owen. The Treasurer would attempt to develop that argument
for the next special meeting.
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Mr.E.Schofield stated that by now the capital was worth
less in real terms than the original investment and that it was
this point that he sought clarification upon.
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RESOLVED that the Treasurer be requested to submit a
further report on priorities to this Committee prior to is
consideration at the full Trust meeting.
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The meeting concluded at 11.45 am
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MR. ALED MORRIS
JONES
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CHAIRMAN
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