3575217 Investment Policy Implementation Document

Page 1 of 5 for the Focus Section of the Northern Ireland Electricity Pension Scheme

1. Introduction

This Investment Policy Implementation Document (“IPID”) for the Northern Ireland Electricity Pension Scheme (the “Scheme”) sets out details of the Focus Section’s investment arrangements, based on the principles set out in the Scheme’s Statement of Investment Principles (“SIP”) dated June 2021.

This IPID should be read in conjunction with the SIP.

This IPID has been prepared by the Trustees of the Scheme, and the Trustees are responsible for ensuring it reflects the current investment arrangements.

Details of the investment managers, their objectives, investment guidelines and custody arrangements are set out below.

1. Equities

The Trustees have decided to diversify the equity allocation between UK equities and overseas equities. While there is no formal strategic allocation between UK and global equities, the current split is broadly 35% UK equities / 65% overseas equities and the Trustees will monitor this from time to time.

1.1. Schroders Limited (“Schroders”)

The Trustees have selected Schroders to manage an active UK equity mandate on a segregated basis. The Scheme’s initial investment in this mandate was in September 2008.

Schroders’ objective is to outperform the total return of the FTSE All-Share Index by 1.5% pa before the deduction of investment management fees over rolling three-year periods.

1.2. Legal & General Investment Management (“Legal & General”)

The Trustees have selected Legal & General to manage a passive overseas equity mandate with the overseas currency exposure hedged back to Sterling. The Scheme’s assets are invested in the Legal & General World (ex-UK) Equity (GBP Hedged), a unit linked compartment of Legal & General’s insurance policy. The compartment is priced weekly. The compartment is open ended, subject to customary restrictions. The Scheme’s initial investment in this mandate was in April 2011.

Legal & General’s objective is to track the total return of the FTSE All-World (ex-UK) Index (GBP Hedged) within +/- 0.5% pa for two years in three before the deduction of investment management fees.

3575217 2. Absolute return

The Trustees have decided to diversify the absolute return allocation between four absolute return Page 2 of 5 managers. The Trustees will monitor the allocations over time and rebalance when deemed appropriate.

2.1. Baillie Gifford Life Limited (“Baillie Gifford”)

The Trustees have selected Baillie Gifford to manage a diversified growth mandate, with the assets invested in the Baillie Gifford Diversified Growth Fund. The fund is priced daily. The fund is open ended, subject to customary restrictions. The Scheme’s initial investment in this mandate was in June 2013.

The objective of this fund is to outperform the UK base rate by at least 3.5% pa (after fees) with an annualised volatility of less than 10% over rolling five year periods.

2.2. Blackstone Alternative Solutions LLC (“Blackstone”)

The Trustees have selected Blackstone to manage an unconstrained absolute return mandate. The Scheme’s assets are invested in the Blackstone Strategic Opportunities (the “BSOF”). The fund is priced monthly. The fund is open ended with limited liquidity and is unlisted. The Scheme’s initial investment in this mandate was in March 2015.

Blackstone’s overall objective is to produce attractive, long term, risk-adjusted returns.

The Scheme invests in the BSOF via a USD-denominated share class. The Trustees have implemented a separate derivative contract with BMO Global (“BMO”), see below, to broadly hedge this exposure back to Sterling.

2.3. Ruffer LLP (“Ruffer”)

The Trustees have selected Ruffer to manage a diversified growth mandate on a segregated basis. Ruffer has complete discretion to invest across a full range of investments including equities and bonds, as well as underlying collective funds as they deem appropriate. In doing this, Ruffer will aim to diversify the portfolio in a manner consistent with the objectives of the mandate. The Scheme’s initial investment in this mandate was in April 2010.

Ruffer’s overall objective is to:

• preserve capital over rolling twelve-month periods; and

• to grow the assets at a higher rate (after fees) than could reasonably be expected from the alternative of depositing the cash value of the assets in a reputable UK bank.

2.4. Aberdeen Standard Investments (“Aberdeen Standard”)

The Trustees have selected Aberdeen Standard to manage a diversified growth mandate, with the assets invested in Aberdeen Standard’s Global Absolute Return Strategies (“GARS”) Fund, a unit linked compartment of Aberdeen Standard’s insurance policy. The compartment

3575217 is priced daily. The compartment is open ended, subject to customary restrictions. The Scheme’s initial investment in this mandate was in April 2010. Page 3 of 5 The objective for the GARS Fund is to outperform cash (defined as six-month UK LIBOR) by 5% pa before the deduction of investment management fees over rolling three-year periods.

3. Private markets

3.1. M&G Investments (“M&G”)

The Trustees have selected M&G to manage a multi-asset credit mandate, with the Scheme’s assets invested between the M&G Inflation Opportunities Fund and the M&G Illiquid Credit Opportunities Fund.

The Inflation Opportunities Fund is priced monthly, open ended with limited liquidity and unlisted. The Scheme’s initial investment in this mandate was in June 2015.

The Illiquid Credit Opportunities Fund is priced quarterly, open ended (but with very limited liquidity including a three year “lock up”) and unlisted. The Scheme’s initial investment in this mandate was in May 2015.

The investment objective of the M&G Inflation Opportunities Fund is to achieve a total return of RPI + 2.5% pa after the deduction of manager fees. The investment objective of the M&G Illiquid Credit Opportunities Fund is to achieve a total return of UK 3 month LIBOR + 5% pa after the deduction of manager fees.

3.2. Partners Group (UK) Limited (“Partners”)

The Trustees have selected Partners to manage private multi-asset credit mandates via bespoke funds. The funds are not priced on a regular basis. The funds are closed ended (7 year term) and unlisted. The Scheme’s initial investment in the first of these mandates was in June 2015.

Partner’s objective is to outperform LIBOR by 4 to 6% pa, after the deduction of manager fees, over the life of the mandates.

3.3. Beach Point Capital Management (“Beach Point”)

The Trustees have selected Beach Point to manage an opportunistic credit mandate, with the Scheme’s assets invested in the Beach Point Opportunities Offshore Feeder Fund IV. The fund is not priced on a regular basis. The fund is closed ended (6 year term from April 2021) and unlisted. The Scheme’s initial investment in this mandate was in May 2020.

Beach Point targets an annualised internal rate of return informally described as “in the teens”, after the deduction of all fees and expenses, with a target income yield of c10% pa.

The Scheme invests in the fund via a USD-denominated share class. The Trustees have implemented a separate derivatives contract with BMO Global Asset Management (“BMO”), see below, to broadly hedge this exposure back to Sterling.

3575217 3.4. BentallGreenOak Real Estate Advisors LLP (“BentallGreenOak”)

The Trustees have selected BentallGreenOak to manage an illiquid credit mandate, with the Page 4 of 5 Scheme’s assets invested in the BentallGreenOak UK Secured Lending Fund II. The fund is not priced on a regular basis. The fund is closed ended (7 year term) and unlisted. The Scheme’s initial investment in this mandate was in April 2021.

BentallGreenOak’s investment objective is to achieve an (net of all fees) annualised internal rate of return of 7-9% pa (in Sterling) by, primarily, providing capital for middle-market loans secured against commercial UK real estate projects.

4. LDI

4.1. BMO LDI

The Trustees have selected BMO to manage a segregated LDI portfolio.

The objective of the portfolio is to hedge a proportion of the Scheme’s liabilities against changes in interest rates and inflation expectations. The relevant proportion of interest rate and inflation risk to be hedged is represented by a Liability Benchmark such that the objective of the portfolio is to outperform the change in the present value of the Liability Benchmark over the long term. The Scheme’s initial investment in this mandate was in September 2013.

The Liability Benchmark will be updated when new liability cash flows are produced by the Scheme Actuary or if adjustments are required to better reflect the status of the Scheme’s investments at that time.

4.2. BMO short duration credit

The Trustees have selected BMO to manage a segregated short duration credit mandate. The Scheme’s initial investment in this mandate was in December 2019.

The objective of the mandate is to achieve a return of 1% pa in excess of a portfolio of UK government bonds of equivalent maturity.

5. Custodians

The role of a custodian is to ensure the safe keeping and reconciliation of assets, facilitate all transactions, and administer income and tax payments in respect of the portfolios for which it provides custody.

For the Focus Section, the Trustees have appointed JP Morgan Chase Bank N.A (“JP Morgan”) as the global custodian for the assets managed in segregated portfolios by Schroders, Ruffer and BMO. The Trustees are not required to select a custodian for the assets invested in the pooled funds or life policies managed by Baillie Gifford, Blackstone, Legal & General, M&G, Standard Life, Beach Point, BentallGreenOak and the bespoke funds managed by Partners Group.

6. Additional Voluntary Contributions

Additional Voluntary Contributions are invested in a life policy issued by Scottish Equitable plc (branded as “Aegon”), the Scheme’s DC provider for the Options Section.

3575217 For and on behalf of the Trustees of the Scheme:

Page 5 of 5 Dated: 14 June 2021