Statement of Investment Principles
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for theInforma Final Salary Scheme
Effective from 31 March 2023
1.

Introduction

This Statement of Investment Principles (“SIP”) sets out the policy of Trustee of the Informa Final Salary
Scheme (“the Trustee”) on various matters governing decisions about the investments of theInforma Final Salary Scheme (“the Scheme”), a Defined Benefit (“DB”) Scheme. This SIP replaces theprevious SIP dated August 2019.
The SIP is designed to meet the requirements of Section 35 (as amended) of the Pensions Act 1995(“the Act”), and the Occupational Pension Schemes (Investment) Regulations 2005 (as amended) and
the Pension Regulator’s guidance for defined benefit pension schemes (issued March 2017, as
amended).
This SIP has been prepared after obtaining and considering written professional advice from Lane Clark& Peacock LLP (“LCP”), the Scheme’s investment adviser, whom the Trustee believes to be suitably
qualified and experienced to provide such advice. The advice takes into account the suitability ofinvestments including the need for diversification, given the circumstances of the Scheme, and theprinciples contained in this SIP. The Trustee has consulted with the relevant employer in producing thisSIP.
The Trustee will review this SIP from time to time and, with the help of its advisers, will amend it asappropriate. These reviews will take place as soon as practicable after any significant change ininvestment policy and at least once every three years.
▪

Appendix 1 sets out details of the Scheme’s investment governance structure, including key
responsibilities of the Trustee, investment advisers and investment managers. It also contains a
description of the basis of remuneration of the investment adviser and the investment managers.

▪

Appendix 2 sets out the Trustee’s policy towards risk appetite, capacity, measurement andmanagement.

2.

Investment objectives

The Trustee’s primary objectives are that:▪

the Scheme should be able to meet benefit payments as they fall due; and▪

that the Scheme’s funding position (ie the value of its assets relative to the assessed value of its
liabilities) should remain at an appropriate level. The Trustee is aware that there are various
measures of funding, and have given due weight to those considered most relevant to the
Scheme.

3.

Investment strategy

The Trustee, with the help of its advisers and in consultation with the employer, reviews the Scheme’s
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investment strategy from time to time, taking into account the objectives described in Section 2 above.
Following a review, the Trustee has agreed that the investment strategy of the Scheme should bebased on the allocation below.
Asset class

Strategic allocation(%)

Equities

12.5

Diversified Growth

12.5

UK Property

10.0

Buy and Maintain Credit

25.0

LDI and Liquidity

40.0

Total

100.0

The Trustee monitors the asset allocation from time to time. If material deviations from the strategic
allocation occur, the Trustee will consider with their advisers whether it is appropriate to rebalance theassets, taking into account factors such as market conditions and anticipated future cash flows.
4.

Considerations made in setting the investment arrangements

When deciding how to invest the Scheme’s assets, the Trustee considers a number of risks, including,but not limited to, those set out in Appendix 2. Some of these risks are more quantifiable than others,
but the Trustee has tried to allow for the relative importance and magnitude of each risk.
The Trustee considered a wide range of asset classes for investment, and the expected returns andrisks associated with those asset classes.
In setting the strategy the Trustee considered:▪

the Scheme’s investment objectives;▪

the best interests of members and beneficiaries;▪

the circumstances of the Scheme, including the profile of the benefit cash flows, the funding level,
and the strength of the employer covenant;▪

the risks, rewards and suitability of a number of possible asset classes and investment strategies
and whether the return expected for taking any given investment risk is considered sufficient given
the risk being taken;▪

the need for appropriate diversification between different asset classes to ensure that both the
Scheme’s overall level of investment risk and the balance of individual asset risks are appropriate;and▪

the Trustee’s investment beliefs about how investment markets work, and which factors are most
likely to impact investment outcomes.

The Trustee’s key investment beliefs, which influenced the setting of the investment arrangements, areas follows:▪

asset allocation is the primary driver of long-term returns;▪

risk-taking is necessary to achieve return, but not all risks are rewarded;▪

risks that are typically not rewarded should generally be avoided, hedged or diversified;▪

investment markets are not always efficient and there may be opportunities for good active

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managers to add value;▪

investment managers who can consistently spot and profitably exploit market opportunities are
difficult to find and therefore passive management, where available, can be better value;▪

environmental, social and governance (ESG) factors, including but not limited to climate-related
factors, are likely to be one area of market inefficiency and so managers may be able to improverisk-adjusted returns by taking account of ESG factors;▪

long-term environmental, social and economic sustainability, including the implications of climatechange, is one factor that the Trustee should consider when making investment decisions; and▪

costs have a significant impact on long-term performance.

5.

Implementation of the investment arrangements

Before investing in any manner, the Trustee obtains and considers proper written advice from its
investment adviser on the question of whether the investment is satisfactory, having regard to the needfor suitable and appropriately diversified investments.
Details of the investment managers, their objectives, investment guidelines, and custody arrangements
are set out in the separate Investment Policy Implementation Document (“IPID”).
The Trustee has signed agreements with the investment managers and platform provider setting out indetail the terms on which the portfolios are managed. The investment managers’ primary role is the
day-to-day investment management of the Scheme’s investments. The managers are authorised under
the Financial Services and Markets Act 2000 (as amended) to carry out such activities.
The Trustee and investment managers to whom discretion has been delegated exercise their powers togiving effect to the principles in this Statement of Investment Principles, so far as is reasonably
practicable.
The Trustee has limited influence over managers’ investment practices because all the Scheme’s
assets are held in pooled funds, but it encourages its managers to improve their practices whereappropriate.
The Trustee‘s view is that the fees paid to the investment managers, and the possibility of their mandate
being terminated, ensure they are incentivised to provide a high quality service that meets the statedobjectives, guidelines and restrictions of the fund. However, in practice managers cannot fully aligntheir strategy and decisions to the (potentially conflicting) policies of all their pooled fund investors in
relation to strategy, long-term performance of debt/equity issuers, engagement and portfolio turnover.
It is the Trustee’s responsibility to ensure that the managers’ investment approaches are consistent with
its policies before any new appointment, and to monitor and to consider terminating any existingarrangements that appear to be investing contrary to those policies. The Trustee expects investment
managers, where appropriate, to make decisions based on assessments of the longer term financial

and non-financial performance of debt/equity issuers, and to engage with issuers to improve theirperformance. It assesses this when selecting and monitoring managers.
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The Trustee evaluates investment manager performance by considering performance over both shorterand longer-term periods as available. Except in closed-ended funds where the duration of theinvestment is determined by the fund’s terms, the duration of a manager’s appointment will depend on
strategic considerations and the outlook for future performance. Generally, the Trustee would be
unlikely to terminate a mandate on short-term performance grounds alone.
The Trustee’s policy is to evaluate each of its investment managers by reference to the manager’s
individual performance as well the role it plays in helping the Scheme meet its overall long-term
objectives, taking account of risk, the need for diversification and liquidity. Each manager’s
remuneration, and the value for money it provides, is assessed in light of these considerations.
The Trustee recognises that portfolio turnover and associated transaction costs are a necessary part ofinvestment management and that the impact of portfolio turnover costs is reflected in performance
figures provided by the investment managers. The Trustee expects its investment consultant toincorporate portfolio turnover and resulting transaction costs as appropriate in its advice on the
Scheme’s investment mandates.
6.

Realisation of investments

The investment managers have discretion over the timing of realisation of investments of the Schemewithin the portfolios that they manage and in considerations relating to the liquidity of investments.
When appropriate, the Trustee, on the administrators’ recommendation, decides on the amount of cash
required for benefit payments and other outgoings and informs the investment managers of any liquidity
requirements.
7.

Financially material considerations and non-financial matters

The Trustee has considered how environmental, social, and governance (“ESG”) and ethical factors
should be taken into account in the selection, retention and realisation of investments, given the time
horizon of the Scheme and its members.
The Trustee expects its investment managers (where appropriate) to take account of financially material
considerations (including climate change and other ESG considerations) when making investment
decisions. The Trustee seeks to appoint managers that have appropriate skills and processes to do
this, and may consider investing in funds (where appropriate) that demonstrate the incorporation of
ESG factors, including climate-related factors, into the investment process. The Trustee will, from time
to time, reviews how its managers are taking account of these issues in practice.
The Trustee has limited influence over managers’ investment practices where assets are held in pooled
funds, but it encourages its managers to improve their practices where appropriate.
The Trustee has considered whether to take into account any non-financial matters (ie matters relating
to the ethical and other views of members and beneficiaries and the principal employer, rather thanconsiderations of financial risk and return) in the selection, retention and realisation of investments, andhas decided not to such matters into account.

8.

Voting and engagement

The Trustee recognises its responsibilities as owners of capital, and believes that good stewardship
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practices, including monitoring and engaging with investee companies, and exercising voting rights
attaching to investments, protect and enhance the long-term value of investments. The Trustee hasdelegated to its investment managers the exercise of rights attaching to investments, including voting
rights, and engagement with issuers of debt and equity and other relevant persons about relevant
matters such as performance, strategy, risks and ESG considerations.
The Trustee does not monitor or engage directly with issuers or other holders of debt or equity. It
expects the investment managers to exercise ownership rights and undertake monitoring andengagement in line with the managers’ general policies on stewardship, as provided to the Trustee fromtime to time, considering the long-term financial interests of the beneficiaries.
The Trustee monitors managers’ activities in relation to ESG factors, voting and engagement on aregular basis and discusses this subject with managers at regular Trustee meetings. It seeks tounderstand how the managers are implementing their stewardship policies in practice to confirm that
their stewardship is effective and aligned with its expectations.
The Trustee has selected Climate Change as its key ESG priority to provide a focus for its monitoring ofinvestment managers’ voting and engagement activities. The Trustee reviews its ESG priorities
regularly and updates them if appropriate. It communicates these stewardship priorities to its managers
and also confirms its more general expectations in relation to ESG factors, voting and engagement.
If the Trustee’s monitoring identifies areas of concern, it will engage with the relevant manager toencourage improvements.
The Trustee seeks to appoint managers that have strong stewardship policies and processes, reflecting
where relevant the recommendations of the UK Stewardship Code issued by the Financial Reporting
Council, and from time to time the Trustee reviews how these are implemented in practice.

Responsibilities, decision-making and fees
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Appendix 1

The Trustee has decided on the following division of responsibilities and decision-making for the
Scheme. This division is based upon the Trustee’s understanding of the various legal requirements
placed upon it, and its view that this division allows for efficient operation of the Scheme overall, withaccess to an appropriate level of expert advice and service. The Trustee’s investment powers are set
out within the Scheme’s governing documentation.
1.

TrusteeIn broad terms, the Trustee is responsible in respect of investment matters for:▪

setting the investment strategy, in consultation with the employer and after receiving advice fromits advisers;▪

developing a mutual understanding of investment and risk issues with the employer;▪

reviewing the investment policy following the results of each valuation, and / or after any review ofinvestment strategy (eg any asset liability modelling exercise);▪

appointing, monitoring, reviewing and dismissing investment managers, custodians, investment
advisers, actuary and other advisers;▪

monitoring the exercise of the investment powers that they have delegated to the investment
managers and monitoring compliance with Section 36 of the Act;▪

formulating a policy in relation to financially material considerations, such as those relating to ESG
considerations (including but not limited to climate change);▪

setting a policy on the exercise of rights (including voting rights) and undertaking engagement
activities in respect of the investments;▪

communicating with members as appropriate on investment matters, such as the Trustee’s
assessment of its effectiveness as a decision-making body, the policies regarding responsible
ownership and how such responsibilities have been discharged;▪

putting effective governance arrangements in place and documenting these arrangements in asuitable form, including setting the policy for rebalancing between asset classes;▪

reviewing the content of this SIP from time to time and modifying it if deemed appropriate; and▪

consulting with the employer when reviewing the SIP.

2.

Platform provider

The investment platform provider will be responsible for:▪

providing access to a range of funds managed by various investment managers; and▪

providing the Trustee with regular information concerning the management and performance of
the assets.

3.

Investment managers

In broad terms, the investment managers will be responsible for:▪

managing the portfolios of assets according to their stated objectives, and within the

Appendix 1 (cont)guidelines and restrictions set out in their respective investment manager agreements
and/or other relevant governing documentation;

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taking account of financially material considerations (including climate change and other ESG
considerations) as appropriate when managing the portfolios of assets;▪

exercising rights (including voting rights) attaching to investments and undertaking engagement
activities in respect of investments;▪

providing the Trustee with regular information concerning the management and performance of
their respective portfolios; and▪

having regard to the provisions of Section 36 of the Act insofar as it is necessary to do so.

4.

Investment adviser

In broad terms, the investment adviser will be responsible, in respect of investment matters, as
requested by the Trustee, for:▪

advising on how material changes within the Scheme’s benefits, membership, and funding
position may affect the manner in which the assets should be invested and the asset allocation
policy;▪

advising on the selection, and review, of the investment managers, incorporating its assessmentof the nature and effectiveness of the managers’ approaches to financially material considerations(including climate change and other ESG considerations); and▪

participating with the Trustee in reviews of this SIP.

5.

Fee structures

The Trustee recognises that the provision of investment management and advisory services to the
Scheme results in a range of charges to be met, directly or indirectly, by deduction from the Scheme’s
assets.
The Trustee has agreed Terms of Business with the Scheme’s investment advisers, under which work
undertaken is charged for by an agreed fixed fee or on a “time-cost” basis.
The investment managers and platform provider receive fees calculated by reference to the market
value of assets under management. The fee rates are believed to be consistent with the managers’
general terms for institutional clients and are considered by the Trustee to be reasonable whencompared with those of other similar providers.
The fee structure used in each case has been selected with regard to existing custom and practice, andthe Trustee’s view as to the most appropriate arrangements for the Scheme. However, the Trustee willconsider revising any given structure if and when it is considered appropriate to do so.
6.

Performance assessment

The Trustee is satisfied, taking into account the external expertise available, that there are sufficient
resources to support its investment responsibilities. The Trustee believes that it has sufficient expertiseand appropriate training to carry out its role effectively.

It is the Trustee’s policy to assess the performance of the Scheme’s investments, investment

Appendix 1 (cont)providers and professional advisers from time to time. The Trustee will also carry out
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periodically an assessment of its own effectiveness as a decision-making body and will decide
how this may then be reported to members.
7.

Working with the Scheme’s employer

When reviewing matters regarding the Scheme’s investment arrangements, such as the SIP, theTrustee seeks to give due consideration to the employer’s perspective. While the requirement to
consult does not mean that the Trustee needs to reach agreement with the employer, the Trustee
believes that better outcomes will generally be achieved if the Trustee and employer work together
collaboratively.

Policy towards risk

Appendix 2

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1.

Risk appetite and risk capacity

Risk appetite is a measure of how much risk the Trustee is willing to bear within the Scheme in order tomeet its investment objectives. Taking more risk is expected to mean that those objectives can beachieved more quickly, but it also means that there is a greater likelihood that the objectives are
missed, in the absence of remedial action. Risk capacity is a measure of the extent to which theTrustee can tolerate deviation from its long-term objectives before attainment of those objectives isseriously impaired. The Trustee aims to strike the right balance between risk appetite and risk capacity.
When assessing the risk appetite and risk capacity, the Trustee considered a range of qualitative andquantitative factors, including:▪

the strength of the employer’s covenant and how this may change in the near/medium future;▪

the agreed journey plan and employer contributions;▪

the Scheme’s funding target;▪

the Scheme’s liability profile, its interest rate and inflation sensitivities, and the extent to whichthese are hedged;▪

the Scheme’s cash flow and target return requirements; and▪

the level of expected return and expected level of risk (as measured by Value at Risk (“VaR”).

2.

Approach to managing and monitoring investment risks

The Trustee considers that there are several different types of investment risk that are important for the
Scheme. These include, but are not limited to:
2.1.

Risk of inadequate returns
A key objective of the Trustee is that, over the long-term, the Scheme should have adequate
assets to meet its liabilities as they fall due. The Trustee therefore invests the assets of the
Scheme to produce a sufficient long-term return in excess of the liabilities. There is also a riskthat the performance of the Scheme’s assets and liabilities diverges in certain financial andeconomic conditions in the short term. This risk has been considered in setting the investment
strategy and is monitored by the Trustee on a regular basis.

2.2.

Risk from lack of diversification
This is the risk that failure of a particular investment, or the general poor performance of agiven investment type, could materially adversely affect the Scheme’s assets. The Trustee
believes that the Scheme’s assets are adequately diversified between different asset classes
and within each asset class. This was key consideration when determining the Scheme’s
investment arrangements.

2.3.

Investment manager riskThis is the risk that an investment manager fails to meet its investment objectives. Prior toappointing an investment manager, the Trustee receives written advice from its advisors. The
Trustee monitors the investment managers on a regular basis.

2.4.

Liquidity/marketability risk

Appendix 2 (cont)This is the risk that the Scheme is unable to realise assets to meet benefit cash flows as they

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fall due. The Trustee is aware of the Scheme’s cash flow requirements and believes that thisrisk is managed by maintaining an appropriate degree of liquidity across the Scheme’s
investments.
2.5.

Credit riskThis is the risk that one party to a financial instrument will cause a financial loss for the otherparty by failing to discharge an obligation. The Scheme is subject to credit risk because it
invests in bonds and property via pooled funds. The Trustee manages its exposure to credit
risk by investing in pooled funds that have a diversified exposure to different credit issuers andcredit types.

2.6.

Currency risk
Whilst the majority of the currency exposure of the Scheme’s assets is to Sterling, the Scheme
is subject to currency risk because some of the Scheme’s investments are held in overseas
markets. The Trustee considers the overseas currency exposure in the context of the overall
investment strategy, and believes that the currency exposure that exists diversifies thestrategy and is appropriate.

2.7.

Interest rate and inflation risk
The Scheme’s assets are subject to interest rate and inflation risk because some of the
Scheme’s assets are held in bonds and swaps via pooled funds. However, the interest rateand inflation exposure of the Scheme’s assets hedges part of the corresponding risks
associated with the Scheme’s liabilities. The net effect will be to reduce the volatility of thefunding level, and so the Trustee believes that it is appropriate to have exposures to theserisks in this manner.

2.8.

Environmental, social and governance (ESG) risks
Environmental, social and corporate governance (ESG) factors are sources of risk to the
Scheme’s investments, some of which could be financially material, over both the short andlonger term. These potentially include risks relating to factors such as climate change,
unsustainable business practices, and unsound corporate governance. The Trustee seeks to
appoint investment managers who will manage these risks appropriately on their behalf andfrom time to time reviews how these risks are being managed in practice.

2.9.

Collateral adequacy risk
The Scheme is invested in leveraged Liability Driven Investment (“LDI”) arrangements toprovide protection (“hedging”) against adverse changes in interest rates and inflation
expectations. The LDI managers may from time to time call for additional cash to be paid tothe LDI funds in order to support a given level of leverage. Collateral adequacy risk is the riskthat the Trustee when requested to do so will not be able to post additional cash to the LDI
funds within the required timeframe. A potential consequence of this risk is that the Scheme’sinterest rate and inflation hedging could be reduced and that the Scheme’s funding level could
suffer subsequently as a result. In order to manage this risk, the Trustee ensures that the
Scheme has a sufficient allocation to cash and other highly liquid assets which can be readily
realised, so that cash can be posted to the LDI managers at short notice.

Appendix 2 (cont)
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2.10.

Other non-investment risks
The Trustee recognises that there are other, non-investment, risks faced by the Scheme, andtakes these into consideration as far as practical in setting the Scheme’s investment
arrangements.
Examples include:▪

longevity risk (the risk that members live, on average, longer than expected); and▪

sponsor covenant risk (the risk that, for whatever reason, the sponsoring employer isunable to support the Scheme as anticipated).

Together, the investment and non-investment risks give rise generally to funding risk. This is
the risk that the Scheme’s funding position falls below what is considered an appropriate level.
By understanding and considering the key risks that contribute to funding risk, the Trustee
believes that it has appropriately addressed and is positioned to manage this general risk.