HomeMy WebLinkAbout2022-09-22-RB-minMinutes of the September 22, 2022 Retirement Board meeting:
Present: Robert Cunha, Joseph Foley, Alan Fields, Carolyn Kosnoff, Marguerite Olive and Jim Condon
Absent: Frederick Weiss
The Lexington Retirement Board met remotely through Zoom tele-conferencing. The Town
Clerks Office posted the meeting, which included the information for any interested party to
join the call. Chairman Robert Cunha called the meeting to order at 8:30 am.
The Board accepted the 093022 Warrant and the September payroll. The August minutes and
July financials were reviewed and approved.
Robert Cunha reviewed the September agenda with all Board members and staff in attendance.
Marguerite Oliva, Board Administrator, announced she will retire on November 29, 2022
It was noted there was a Monroe Capital distribution for $44,333.00 on August 25, 2022.
The Board was notified Joseph O’Leary Jr. is yet to contact the Retirement Office regarding his
remaining accumulated deductions on file.
The Robert Magarian matter is still in a holding pattern. Marguerite Oliva sent out information
to Chris Collins for review. The Retirement Office is waiting to hear back from Mr. Collins.
Joseph Foley, Board member, requested to speak with the other Board members regarding the
local option legislation for the 5% COLA. This bill, which remains before the State Senate,
would allow local retirement boards to increase the current COLA from 3% to 5% for fiscal year
2023. Mr. Foley gave his thoughts on this pending legislation and was in f avor of Lexington
adopting the increase, if enacted. Our retirees in Lexington, as well as most retirees around the
Commonwealth could benefit during these difficult times of rising costs and the potential for a
recession. The Board will further discuss at the next meeting.
Henry Jaung and Steve MacLellan presented the Meketa update at 8:45 am. The portfolio
balance as of August 31, 2022 was $195,783,576.00, down $4.1m from the July report. As of
this meeting, the Federal Reserve has raised the interest rate another .75%. Flat to negative
growth in the markets is now on the horizon. The Dow Jones has been trending in a downward
pace these recent days. The portfolio was down in most sectors last month. However, our Real
Estate and Private debt holdings are stable. Unallocated assets, which make up 35% of
portfolio are holding up well. For the most part, the portfolio is structured as it should be and
had been performing well. However, it was mentioned by Board member Alan Fields that we
have too much exposure in International Equity Assets. The way the world and markets are
going lately, holding at 17.3% of our portfolio is too risky. International Equities have been
suffering for the past year. He feels it is time for the Board to consider loweri ng our holdings
from 17.3% to roughly 8-10% and invest more in US Equities and Bonds. Stay within the small
to mid-cap markets. It was decided to have Meketa research some strategies within the US
markets and report back at the October Board meeting. Meketa wrapped up the presentation
at 9:15 am.
Ruth Gitlin and Drew Guyette presented the Angelo Gordon update at 9:16 am. Ruth began
with a brief overview of the firm. AG currently has $52b in Assets Under Management with
over 600 employees globally. They focus on Credit and Real Estate strategies. AG will invest in
inefficient markets to generate consistent returns. A prudent use of leverage is the goal to
protect their capital, as well as extensive research. Healthcare is Angelo Gordon’s main
exposure, holding 23% of their industry exposure. Business services is next at 13%. AG will
avoid involvement with any volatile sectors, such as energy, oil, or even restaurants. Ruth
wrapped up the presentation at 9:30 am.
Paul Ahrens and Jon Bianchi presented the White Oak Summit update at 9:30 am. Paul gave a
brief update on the firm. As of June 30, 2022, White Oak has a net asset value of $638m with a
gross IRR of 5.3%. Most of their exposure is in the Industry sector, as well as Information
Technology. He did mention Lexington had a net goal of an 8% return, but now the expectation
is around 6%. The broad sell off in Q2 2022 has affected the portfolio quite a bit, and the
spreads are widening, which is causing pressure on the portfolio. All theirs loa ns are floating
rates, which means when rates rise, their borrowers are then passing the cost on to customers
via price increases. Within the energy industry, there is volatility which will be of concern in the
next few months. Certain assets will benefit in the near term, but not too positive in the long
run. White Oak concluded its review at 9:50 am.
Robert Cunha made a motion to adjourn the meeting at 9:55 am, which was seconded by
Joseph Foley, and unanimously approved by Carolyn Kosnoff and Alan Fields.
The next Retirement Board meeting will be held via Zoom at 8:30 am on Thursday, October 27,
2022
PRIT & KAR will attend for annual review.
_____________________________
Robert Cunha, Chairman Alan Fields, Appointed Member
Carolyn Kosnoff, Ex Officio Member Joseph Foley, Elected Member
** ABSENT **
Frederick Weiss, Appointed Member