HomeMy WebLinkAbout2009-05-29-RB-minMINUTES OF THE MAY 29, 2009 RETIREMENT MEETING
Present: Robert Cunha, Joseph Foley, Alan Fields, Michael McNabb, Rob Addelson,
Marguerite Oliva
Bob Cunha called the meeting to order at 8:00.
The Board accepted and signed the 052909 warrant and the May payroll.
The Board noted 2 new members: Heidi Seiger, SPED Financial Operations Manager;
Aura Nocivelli, Instructional Assistant
John Haggerty and LouAnn Eisenhut from Meketa attended the meeting along with
representatives Joe Gill and Craig Bergstrom from Corbin Capital Partners for hedge fund
manager interview.
Corbin is a private partnership established in 1984 with 35 professionals headquartered in
New York. Senior managers are equity owners. The product name is Pinehurst Partners.
Managers are:
• Bottom up investors with high conviction ideas
• Return oriented managers
Flexible and opportunistic managers
o Substantial co- investment by the risk - takers in fund
® Investing in funds with acceptable liquidity profile
The investment process includes operational due diligence test, risk management test and
manager research conviction test.
The Pinehurst Fund has mostly institutional investors with less then 10% of high private
investors. The retirement board asked that a list of investors be forwarded to the board.
Mr. Gill and Mr. Bergstrom left the meeting at 9:00. The report is on file in the
retirement office.
John Haggerty presented Meketa's review of Corbin Capital. John first commented on
hedge fund investing noting that "despite additional fees, fund of funds offer many
advantages, including 1) diversification, 2) portfolio construction, 3) due diligence and 4)
liquidity."
In December 2008, the retirement board voted to conduct a hedge fund of funds manager
search. Meketa issued an RFP and 23 firms responded. Meketa reduced the number to
four finalists based on those they felt would fit within the system's current portfolio, on-
site due diligence and reference calls. The report is on file in the retirement office
Mike discussed the unique opportunity with hedge funds and mentioned he believes in
credit opportunities. He also feels we need inflation protection in the portfolio. Looking
at the credit market, Mike mentioned that inflation is around the corner.
It was mentioned that the board should not invest in hedge funds just because permission
has been received from PERAC for the investment. The board needs to look at what
investing in hedge funds will add to the portfolio. Alan's conviction is for flexibility by
mandate. Not a strong proponent of having hedge fund vehicles as managing the rest of
the portfolio. Alan believes we should have hedged asset class.
Mike questioned if we should stay with the managers we already have. John Haggerty
mentioned going into fixed income has risks right now.
Given the constraints, the board needs to decide to either invest in hedge funds as much
as allowed or not at all. PERAC regulations require the investment for fund of fund
managers be split between two managers. Mike wondered how important it would be to
add two more managers.
Alan in reviewing the report noted that 40% of the portfolio is held by Wellington and
PIMCO. The board hedges by diversification. The big bet is on global economic
productivity. Equities are the driver of returns.
John Haggerty mentioned rather then adding hedge funds, add one more manager similar
to Wellington and PIMCO.
Mike mentioned finding credit focused fund of fund managers and Alan said most of
fund of fund managers have a bias toward credit opportunities.
John Haggerty noted that the RFP for credit opportunities brought in 12 responses. They
will forward information on the global tactical managers they have interviewed at
Meketa. The hedge fund search will be placed on hold for now and they will focus on
the 40% held by PIMCO and Wellington. Alan wondered about the value in diversifying
the 40% held by the two managers. Leave hedge fund and credit search out for now. If
the long run is inflation he would like to look at credit tactical opportunities now. Bob
restated that there is now a hold on the credit and fund of fund search.
To try to shorten the meetings, prior to each meeting Mike would like to see a snapshot of
where we are and would like a short review of what was discussed and see if there is any
needed action. State Street will be contacted to see if they can forward information prior
to meetings.
For the next meeting, the board would like to review Earnest Partners and would like to
have Meketa present their current thinking about Earnest Partners.
The Board wants to continue with PAC Rim search and acknowledged the funding would
come from Earnest Partners holdings.
An Ordinary Disability request was presented from Robert Staples, a Water /Sewer
Laborer and truck driver. The Board reviewed the request. Bob Cunha made a motion to
accept the application, Joe Foley seconded and it was accepted unanimously.
Pauline Burke, DPW Office Administrator, has made a request to buyback service from
November 10, 1986 — June 30, 1989 when she was employed by Lexpress. The Board
unanimously agreed to the buyback.
Marguerite was notified by Frank Zecha from the Brookline Retirement System, that the
3(8)(c) billing for Bernard Belcastro has been in error since 1993. The latest letter from
PERAC from 1993that is on file in the Lexington Retirement office indicates that
Lexington must pay Brookline $5,523.64. Frank Zecha has forwarded a letter he has
from PERAC from 1997 that shows the amount should be $11,270.81. John Ryan
addressed this issue back in 1993 and is no letter was ever received in Lexington from
PERAC in 1997.indicating the change. All information on file has been forwarded to
Frank Zecha and he was told he would have to provide documentation as to the reason for
the change and, if Lexington is billed, it will be appealed.
A 3(8)(c) billing was received from MTRS for a former tutor. Noting the discrepancy
between the salary earned as tutor and the salary at which she retired as a teacher, the
board noted these 3(8)(c)'s for former tutors will have to be challenged.
Rob wanted to confirm that the FY' 11 assessment that is specified on the FY' 10 PERAC
appropriation letter will remain the same when the new actuarial valuation is done on
111 /10. He needs the information for the Selectmen and a Task Force. Bob Cunha
confirmed the FY' 11 assessment will remain as already indicated.
The MACRS Conference in Hyannis will be attended by Bob Cunha, Joe Foley, Mike
McNabb and Marguerite Oliva from June 7 — June lo th .
A motion was made, seconded and approved unanimously to adjourn the meeting at
11:10 AM. The next meeting will be held June 25, 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