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HomeMy WebLinkAbout2021-06-24-RB-min Minutes of the June 24, 2021 Retirement Board meeting: Present: Robert Cunha,Joseph Foley,Alan Fields, Fred Weiss, Carolyn Kosnoff, Marguerite Oliva &Jim Condon Absent: None NEW MEMBERS: (5) Emma Patterson Ware, Library Tech; Gregory Coleman, Custodian; Bryan Snell, Laborer; Michael Bontempo, Mechanic; Jeffrey Wertheim, I.T. Support Tech RETIREMENTS: (3) James Barry, Detective, 6/19/21; Sandra O'Connor, Student Instr. Asst., 6/30/21; Stephen Martin, 8/01/2021, Custodian DEATHS:None The Lexington Retirement Board met remotely through Zoom tele-conferencing during the Covid-19 Pandemic. The Town Clerks Office posted the meeting,which included the information for any interested party to join the call. All Board members were present for this meeting. Chairman Robert Cunha called the meeting to order at 8:30 am. The Board accepted the 063021 Warrant and the June payroll. The May minutes and April financials were reviewed and approved. Robert Cunha reviewed the June agenda with all Board members and staff in attendance. It was noted a distribution was received by White Oak for$36,617.00 on 06/21/2021. There is no update to report regarding Joseph O'Leary. Once the court system is back up and running at full capacity,we should be notified of some action. After a brief discussion regarding in person Board meetings, it was decided the Board will continue with Zoom meetings until the fall. Cary Library is not set to open up meeting rooms just yet. Their Board of Trustees will be meeting to finalize proper reopening protocols in the coming weeks. Governor Baker recently extended the use of virtual town meetings as a means of operation. The Board sided with the recommendation by Attorney Michael Sacco to reject an offer proposed by Robert Magarian. Mr. Magarian submitted a proposal to return $750.00 per month for the next ten (10) years to the Retirement Board to satisfy his debt of more than $100,000.00. Robert Cunha,Joseph Foley,Alan Fields, Frederick Weiss, and Carolyn Kosnoff were in agreement to reject the proposal. Robert Magarian will retain his health and dental benefits throughout this process. The Board members were reminded of PERAC memo#14 regarding 2nd qtr. trainings. It appears in PROSPER, our Board members have achieved the necessary educational credits to date. Henry Jaung and Stephen MacLellan presented the Meketa portfolio update. The portfolio balance as of May 31, 2021 is$222,592,906.00, up$1.6m from the prior month. We continue to see strong returns as the Pandemic winds down. Each month in 2021, we have posted positive gains across the board. US equities continues to be the main driver within the portfolio, up 11.3%. International equities is posting a 9.4%YTD. Our Cash holding remains high, however the Board is set to discuss and vote to move cash into direct lending funds. Henry Jaung spoke of Monroe and Golub as the two Direct Lending managers we will be utilizing to make commitments. Based on the markets and future expectations, private debt could yield a target return to our portfolio in the area of 7-8%over time. A required vote to commit$10m was announced after the Board members felt that$5m be allocated to each Lender. Robert Cunha made a motion to allocate$5m to Monroe and $5m to Golub. The motion was seconded by Alan Fields, and unanimously approved by Fred Weiss, Carolyn Kosnoff, and Joseph Foley. The vote was 5-0 in favor of this allocation. William Cullinan and Francis Griffin presented the Angelo Gordon update 9:00 am. AG currently has $44b in Assets Under Management. Credit accounts for$29.5b, while Real Estate has$13.5b. They continue to invest in inefficient markets to generate consistent, absolute returns. Extensive research is what drives every investment decision. Francis mentioned Healthcare holdings are 31%of the entire holdings chart. He stated the Healthcare sector has many sectors with great exposure. Medical devices, dental practices, senior care, and dermatology to name a few. These sectors hardly default on any loans. Most did not even take the PPE Loans offered by the Federal Government. The other main holder is in Business services. They have 14%exposure rate in this industry, mostly in Logistics and Background screening. William Cullinan then concluded the review at 9:20 am. Paul Ahrens and Kyle Landau presented the White Oak update at 9:30 am. Paul briefed the Board on the firm. They currently have$7.3b in Assets Under Management utilizing a team of just over 465 professionals worldwide. Their net performance is estimated around 7%, slightly lower than expectations. White Oak was hoping for an 8% return to us. They have been slow in raising capital due to the Covid-19 Pandemic. Healthcare sector is where the firm is now focusing on heavily. Trying to stay away from Industrials. During the Pandemic,the use of oil and gas was slowed down. That sector had a tough stretch. One highlight mentioned was the acquisition of New Angus. It is a meat-packing plant that defaulted on loans and was taken over by White Oak. They focus on high-end cattle and sell products in 14+countries. Fifty percent of the company relies on retail sales,while the rest is comprised of food service industries and institutional settings. It has been a real asset to White Oak. Paul then concluded the review at 9:55 am. Fossil Fuel exposure at 2.4%. This remains the same from the last update on March 31, 2021. Robert Cunha motioned to adjourn the meeting at 10:00 am,which was seconded by Fred Weiss, and unanimously approved by Carolyn Kosnoff,Joseph Foley, and Alan Fields. The next Retirement Board meeting will be held via Zoom on Thursday,July 22, 2021 at 8:30 am. Robert Cunha,Chairman Alan Fields,Appointed Member Carolyn Kosnoff,Ex Officio Member Joseph Foley,Elected Member Frederick Weiss,Appointed Member