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How we manage our investments

Investment Strategy Statement

This is the Investment Strategy Statement (ISS) of the Cheshire Pension Fund.

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The document sets out the current investment strategy of the Fund, provides transparency in relation to how the Fund’s investments are managed, acts as a high level risk register, and has been designed to be informative for all stakeholders.

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The Statement has been reviewed in 2022-23, the Fund has reviewed the Responsible Investment policy but is awaiting final government proposals on climate risk reporting and will update the Responsible Investment Policy once these proposals are finalised.

Investment holdings

The Cheshire Pension Fund is a long term investor aiming to secure a sustainable Pension Fund for all our stakeholders. Cheshire West and Chester Council, as administering authority, has a fiduciary duty to act in the best long term interests of the fund’s employers and scheme members. This means generating sufficient returns from investments to pay scheme members’ pensions and to protect tax payers and employers from unsustainable pension costs.

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Details of the fund’s investment holdings are published typically twelve weeks after the period closes, this gives the external Investment Manager the opportunity to reconcile and deliver the information.

Where is my money invested?

The Fund’s current asset allocation, equity holdings and total assets:

Total Fund Assets as at 30/9/2025

Full list of the Fund’s Passive, Property and Private Equity investments as at 30/9/2025

Private Markets Investments

The fund’s alternative investment portfolio includes Private Equity, the appointed managers are Adams Street Partners, Pantheon Ventures, Lexington Partners and LGPS Central. The table below provides summary information at the underlying investment level, detailing the initial commitment and activity from inception to date.

Date

Commitment to Investments £m

Contributed

Capital £m

Distributions £m

31/03/24

956

715

704

31/03/23

915

682

611

31/03/22

824

588

582

Details of the fund’s private equity investments are published typically six months after the period closes, this gives the external Private Equity Manager the opportunity to reconcile and deliver the information.

Responsible Investment

Responsible Investment Policy

This is the Responsible Investment Policy of the Cheshire Pension Fund (the “Fund”).

The Fund is a long term investor aiming to deliver a sustainable Pension Fund for all stakeholders.

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The Fund has a fiduciary duty to act in the best, long-term, interests of the Fund’s employers and scheme members. The Fund believes that in order to fulfil this duty, it must have a clear policy on how it invests in a responsible manner.

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Responsible Investment is a fundamental part of the Fund’s overarching investment strategy as set out in the Investment Strategy Statement. That is, to maximise returns subject to an acceptable level of risk whilst increasing certainty of cost for employers, and minimising the long term cost of the scheme.

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The Fund believes that consideration of Environmental, Social and Corporate Governance (“ESG”) factors are fundamental to this, particularly where they are likely to impact on the overarching investment objective.

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The Fund’s approach aims to ensure that consideration of ESG factors is embedded in the investment process, utilising the various tools available to manage ESG risks and to harness opportunities presented by ESG factors.

What is our policy on Responsible Investment?

The Fund’s core principles of responsible investment are:

  • We will apply long-term thinking to deliver long-term sustainable returns.

  • We will seek sustainable returns from well-governed assets.

  • We will apply use an evidence-based long term investment appraisal to inform decision-making in the implementation of RI principles and consider the costs of RI decisions consistent with our fiduciary duties.

See link below to the previous version of our Responsible Investment Policy document.

UK Stewardship Code 2020

The UK Stewardship Code (“the Code”) is a voluntary set of principles that sets high expectations for how investors, and those that support them, invest and manage money on behalf of UK savers and pensioners, and how this leads to sustainable benefits for the economy, the environment and society. There are 12 principles for asset owners and asset managers. These principles cover the policies, processes, activities, and outcomes of effective stewardship.

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The principles are supported by reporting expectations which indicate the information that organisations should publicly report to become a signatory. The Code has four main sections:

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  1. Purpose and Governance

  2. Investment Approach

  3. Engagement

  4. Exercising Rights and Responsibilities

The Cheshire Pension Fund 2023 Stewardship Report was approved by the Financial Reporting Council in July 2024 and the Fund is now officially a signatory of the Code.

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This achievement demonstrates the Fund’s commitment to the highest standards of governance within our investments and demonstrates our commitment to considering Environmental, Social and Governance (ESG) issues in our investment decisions.

Climate Change

Climate Change Risk

The Cheshire Pension Fund (the Fund) recognises that, in addition to the wider impacts of climate change, owning investment assets with a high carbon footprint, poses a potential investment risk.

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The Fund wishes to actively manage this risk and has therefore committed to annually commissioning an independent assessment of all its publicly listed investment assets to determine the Fund’s overall carbon footprint and assess potential climate change impacts and opportunities.

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In 2020 the Fund first published the results of this assessment in its brand-new Climate Risk Management report, using the framework recommended by the Task Force on Climate Related Financial Disclosures (TCFD).  The Fund has continued to publish its Climate Risk report each year, providing an update on the Fund’s progress against its climate change targets as well as describing the broader steps the Fund is taking to manage climate-related risks and incorporate climate risk management into its investment processes.

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We’re pleased to announce that the sixth Climate Risk report, for 2025, is now available. This again demonstrates our commitment to making positive progress in addressing the impact of climate change on the Fund’s investments.

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The report highlights the positive progress the Fund is making in delivering its new short-term climate change targets and its pathway to net zero.  This includes:

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  • A 42.6% reduction in the carbon footprint of the Fund’s equity portfolio (scope 1 and 2 emissions) – achieving its target of a 42% reduction by 2025 and well on track to achieve its target of a 50% reduction by 2030.

  • As of 2025, 33.5% of the Fund’s total investments are in low carbon and sustainable portfolios. This is ahead of the target to achieve 25% by 2026.

Climate Change Strategy

The publication of a stand-alone Climate Strategy document recognises the importance of the issue and draws together all of the Fund’s climate related policies, statements and targets into one consolidated document. The Climate Strategy was endorsed by the Cheshire Pension Fund Committee on 19 July 2024 and a link is provided below:

See link below to the previous version of our Climate Change Strategy document.

Company engagement

Cheshire Pension Fund is committed to promoting the highest standards of corporate governance. The Fund adopts a policy of positive engagement with the companies in which it invests and believes that the greatest impact on company behaviour can be achieved when working together with others.

The Fund is an active member of the Local Authority Pension Fund Forum (LAPFF) which exists to promote the investment interests of local authority pension funds and to maximise their influence as shareholders. LAPFF promotes corporate social responsibility and high standards of corporate governance amongst the companies in which they invest.

Further information on the work undertaken by LAPFF is provided in quarterly engagement reports and on the LAPFF website.

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