2023-05-25-RB-min - Laserfiche WebLink

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Debit Ceiling standoff going on in Washington. It is no secret that markets and portfolios worldwide will take a major hit if the matter is not resolved by June 1, 2023. Even if a deal is struck, markets will have a somewhat negative effect as it could still be too late to pay bills on time in Washington. He mentioned the Lexington portfolio is somewhat safe based on our holdings. However, no financial market or asset class will be immune to what is on the horizon if a deal is not struck. In general terms, our portfolio is set up fine, with no need to make any changes at this time. Domestic equities are up 8% YTD. Fidelity Contrafund has performed excellent this year, posting a 15.1%, while the S&P and Russell 1000 are both over 8.8%. International continue to lag. Matthews is a flat 0.3% YTD, even after posting a negative 3.9% in April. The Global Equity Assets are doing ok. Wellington Enduring and Opportunistic are both fine. Opportunistic fund is up 7.9% YTD. Stephen gave the Board an update on the GCP 9 Fund. The market value on this fund is $3.5m as of 04/30/23. Its inception to date net IRR through 03/31/23 was 9.5%. This fund is reaching the end of its term. The Board needs to decide whether to cash out the investment, to be paid in Q3 2023, or make a move to a new vehicle in the portfolio. PERAC has advised Meketa that a simple rollover into another existing private debt portfolio is not permissible under Chapter 32. Meketa will explore options and report back at the June 22, 2023 Board meeting to discuss possible RFP’s. The presentation wrapped up at 9:05 am. Melissa Moesman and Michael Hickey presented the Fidelity Contrafund review at 9:08 am. Melissa gave a brief overview of the strategy. She explained their philosophy of diversified domestic equity fund with large growth bias and the process of research. The goal is to seek firms with great business models that could maintain durable multiyear earnings growth. The main emphasis is on firms with high returns on capital, free cash flow, prudently managed balance sheets, and little economic sensitivity. She then turned the presentation over to Michael Hickey. He mentioned, as most clients, that 2022 was not the best year in the markets. However, 2023 has seen many nice returns as the economy works its way back to normalcy. Fidelity sector weights do not change too much. He admitted they are overweight in Tech and Financial markets, but it remains to do well. META Platforms Inc. is their largest weighted sector, holding the max of 10% in shares. It is the largest the Contrafund has ever held. Berkshire Hathaway, Microsoft, and Amazaon are also top heavy. All three (3) are robust at the time of this meeting. He concluded the portfolio is doing well in 2023 and sees no changes in the near future. The S&P 500 Index is up 18.60% over a three (3) year period. The presentation concluded at 9:35 am. Robert Cunha made a motion to adjourn the meeting at 9:40 am, which was seconded by Joseph Foley, and unanimously approved by Carolyn Kosnoff, Fred Weiss, and Alan Fields. The next Retirement Board meeting will be held on Thursday, June 22, 2023 at 8:30 am on Zoom. Angelo Gordon will be present for review at 9:00 am.