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HomeMy WebLinkAbout2009-04-29-RB-minMINUTES OF THE APRIL 29, 2009 RETIREMENT MEETING Present: Robert Cunha, Joseph Foley, Alan Fields, Michael McNabb, Marguerite Oliva Bob Cunha called the meeting to order at 8:00. The Board accepted and signed the 043009 warrant and the April payroll. The Board noted 1 new member: Kathryn Melescius, METCO Secretary The Board noted two requests for retirement: Anne Seaquist, 5/1/09, School Admin. Assistant, Carolyn Griffith, 6/30/09, Adult Day Care Coordinator The Board noted four deceased retirees: Edward Stevens, School Custodian, Ordinary Disability C, 4/ 3/09; Catherine Nickerson, School Secretary., Opt B depleted, 3/29/09; Robert Sweeney, Dispatcher, ADR Opt. B, 4/9/09; Elizabeth Cross, Opt. B depleted, 4/17/09, Library Asst. Fran Peters from Meketa presented the first quarter review. The total funds were valued at $75.7 Million as of March 31, 2009. It was noted that the April returns to date have increased 4.5% and hopefully the trend will continue. Preliminary reports show the market value for 4/30/09 is $80.5 million. The current sectors are: 0 32% - fixed income and cash ® 53% - equities 0 15% - real return On March 31 St , $ 2,500,000 was transferred from Artio International Equity to Wellington AsiaPC ex Japan. $2,000,000 was transferred from Earnest Partners to Hartford and $600,000 from SSgA to Wellington Opportunistic Fund. Beacon Capital continues to lag. There was a 30% decline in the fourth quarter and the holdings are now approximately $2,500,000. There was a general discussion regarding the securities lending in the SSgA Passive Bond Market and the issues involved. Fran Peters recommended the board gradually decrease the fund and not increase the exposure. SSgA adopted revised investment guidelines for their collateral pools that will allow withdrawals of only 2% or 4% of the investment value total per month. SSgA will require five days notice prior to withdrawals. As of March 31, $5.4 million was invested with SSgA. Doug Thompson and Tim Baker presented the quarterly review for the Hartford Capital Appreciation Fund overseen by Saul Pannell. It was noted that Saul Pannell consistently outperformed the peer groups. Largest overweight is in health and consumer discretionary and the largest underweight is in utilities and consumer staples. The board questioned why there were holdings in Cisco. Tim Baker stated that information technology tends to be the sector that leads out of recession and Cisco is a higher quality company with the cleanest balance sheet. Tim Baker met with Saul Pannell in February and will meet again in May or June. He mentioned he could set up a meeting with Saul and the board at Wellington. Next Mike O'Connor and Gary Miller from Fidelity presented the quarterly review for Contrafund that is overseen by Will Danoff, who is an All Cap Manager with a Growth Basis. He tends to favor small and medium cap stocks and is flexible and opportunistic. There is an overweight in technology with Google and Apple holdings. There is also a slight overweight in health care and biotechnology which he is thinking of reducing. There were no Fannie Mae or Freddie Mac holdings in the financials. The largest underweight is energy. Reports for the quarterly reviews are in the retirement office. Fran Peters discussed the concerns Meketa has with the Wellington AsiaPC ex Japan fund. Three investment analysts left the team, leaving three other analysts. One that left was the team lead. One of the remaining recently joined Wellington. He then went on to discuss the search requested by the board for an alternative manager to replace the Wellington holding that are currently valued at $12.6 million. Seven firms responded to the search and based on the analysis performed by Meketa, the search was narrowed down to two finalists, Aberdeen Asset Management and Matthews International Capital Management. A proposal was made to move the funds from Wellington Asia PC ex Japan to one of these fiends. There was a brief discussion of whether the funds could be split between the two funds but it was decided after a comparison of the two funds that only one should be used. A motion was made to move the investment to Matthews International Capital Management. The motion was seconded and approved unanimously. Meketa will inform Matthews of the choice. It was noted that Matthews has daily liquidity but Wellington can only liquidate on the first of each month. The next discussion concerned the Hedge Fund of Funds manager search. The search was narrowed by Meketa to four finalists, Aetos Capital, Common Sense Investment Partners, Corbin Partners and SSARTS, Inc. The report contains the firm overviews and terms for the four firms. Alan asked if Lighthouse had responded and was told they had not because they are uncomfortable with the State and PERAC regulations which cap the investment to 5% maximum that would have to be split between two managers. Anything over 5% would have to be invested with PRIT. Mike noted he is not comfortable with any of the hedge fund managers yet and Alan that currently hedge funds are off but there would be no investment until June at the earliest. Timing wise, going through the exercise is important. The greatest importance is that the managers have a flexible mandate. It is important to have the conversation and the board must be thoughtful of how to make the decision. A decision was made to continue to research hedge funds. Alan asked that SSARIS be eliminated from the search. The board asked that Corbin and Aetos be asked to come in to the next meeting for interviews. The board decided not to make a decision until year —end. At 10:20 Rob Addelson had to leave the meeting. He noted that is in favor of granting the ADR for Norm Brule' that is later on the agenda. Alan and Mike discussed credit opportunities and asked the Meketa accelerate the search for managers. The discussed Loomis in general and asked that they be included in the search Meketa will begin the RFP process for Credit Opportunities and will set a response date for three weeks time. The Board accepted the Accidental Disability Retirement Application from Norman Brule' who is employed by the Lexington Water Department. PERAC will be notified and asked to set up three separate medical panels. A motion was made, seconded and approved unanimously to adjourn the meeting at 10:50 AM. The next meeting will be held May 28, 2009 at Cary Memorial Library. Robert W. Cunha, Chairman Michael McNabb, Appointed Member Robert Addelson, Ex Officio Member Joseph Foley, Elected Member Alan Fields, Appointed Member