2019-04-25-RB-min - Laserfiche WebLink

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Recap of the April 25, 2019 Retirement Board meeting: The Board accepted the 043019 Warrant and the April payroll. The March 2019 minutes were reviewed and approved, as well as the cashbooks for February 2019. Bob Cunha reviewed the April agenda with all Board members and staff in attendance. The Board was informed that Attorney Michael Sacco submitted a Cross-Motion for Judgement regarding the ongoing Joseph O'Leary case vs. Lexington Retirement Board matter. It was noted there was a Monroe distribution of$48,801.00. Our Vanguard balance is up to $14,996,208.00. Board members were informed about PERAC Memo#15-2019 regarding the application for a waiver on educational restrictions. It pertains to credits during a Board members term that cannot be reached due to extenuating circumstances for a certain reason. Each Board member was advised of their duty to fulfill Board Training credits per PERAC's guidelines. More courses are now offered on PERAC's website for credit. Future Board meeting dates were announced. Thursday, May 30th,Thursday,June 27th,Thursday,July 27th and Thursday, August 291H The Board is seeking to hire a second equity manager for the Emerging Market sector of the portfolio. ARGA and Driehaus were the two highly advantageous firms that were selected for the interview process. Bruce Deutsch and Sujith Kumar presented for ARGA at 8:30 am. This firm is based in Stamford, CT and 100%employee owned. They manage global, international and emerging markets. With 45 Institutional Clients,they now manage close to $4.313 in AUM. They mainly invest in companies that are undervalued and stressed. The goal is buy and create investment opportunities for these companies in hopes of recovering valuations brought on by earlier financial setbacks. Patience is a must. This investment philosophy requires a 3-5 year recovery process. Volatility in the market is always a concern. ARGA uses a disciplined approach based on fundamental research and present value of a company before any purchases. To date, ARGA has no public pension holdings in Massachusetts. Samsung Electronics is the top holding for them at 4.8%.The EMEF sector exposure is at 27%for Info Technology and 26% in Financials. Utilities, Industrials, and Communication services bottom out at 3-5%exposure. Country exposure is high in China (20%), South Korea (18%) and India (14%). The percentage is high in China because of their high end gadget products such as washers and dryers. Consumers are in demand of such products that make life simple. Howard Schwab and William Hickey presented for Driehaus at 9:15 am. The firm is based in Chicago, IL and is 100%employee owned. They manage roughly$6.513 in assets within domestic, international, and alternative equity strategies. Their philosophy is growth oriented. Flexible in the emerging market field. They primary operated in the small/midcap market and have low volatility due to being so diversified in their investments. The investment process is unique, using a macroeconomic development strategy. Teams will evaluate business models of companies that they wish to acquire and will seek to develop an investment strategy for future growth. Howie did explain the four types of growth cycles that Driehaus uses for specific profiles. This process is key to how they make selections in Emerging Markets. Earnings