HomeMy WebLinkAbout2023-08-24-RB-minMinutes of the August 24, 2023 Retirement Board meeting:
Present: Robert Cunha, Joseph Foley, Alan Fields, Fred Weiss, Carolyn Kosnoff, Michelle Malone and Jim
Condon
Absent: None
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. Robert
Cunha, Joseph Foley, Alan Fields, Frederick Weiss, Carolyn Kosnoff, James Condon and Michelle Malone
were present for this meeting. Robert Cunha called the meeting to order at 8:30 am.
The Board accepted the 083123 Warrant and the August payroll. The July minutes were reviewed and
approved. The financials were not available at the time of meeting.
Robert Cunha reviewed the August agenda with all Board members and staff in attendance. The Board
then took a moment to address and reflect on the recent passing of long time Board Administrator,
Marguerite Oliva. Maggie worked for the Town of Lexington for more than 27 years and recently retired
back in January 2023.
It was noted a distribution of $50,966.00 from Angelo Gordon was received on 07/31/2023. Also, a
Golub Fund 14 distribution for $127,499.00 and a Golub Fund 9 distribution for $130,535.00 were
received on 07/31/2023 and 08/17/2023.
Stephen MacLellan and Henry Juang presented the Meketa update at 8:40 am. The portfolio balance as
of July 31, 2023 was $214,748,069.00, up $7.4m. This will put the portfolio up 11.8% for the year. The
markets are still in recovery mode, and the US Equity portfolio continues to lead the charge. We
continue to have strong success in the domestic equity market. It is up 23.5% for this year. Despite
interest rate hikes, fears of a recession are on the decline as of this meeting. The Russell 3000, Fidelity
Contrafund and Rhumbline are all performing well this year, each over 20% YTD. International equities
are average, yet showing some improvement over the past month. Matthews was up 6.3% last month
and now at 5% for the YTD. Driehaus posted a 4.4% for the month of July, and is now 10.6% YTD. The
overall view with China is still a bit sour. The economy continues to be less robust than analysts
expected. There is no timetable for a rebound in China. Manufacturing companies overseas, such as
Nike and Footlocker, are seeing major declines in production and shipping. Henry and Stephen then
mentioned a search for private debt management should take place soon. Robert Cunha made a motion
for the RFP search by Meketa, which was seconded by Joseph Foley, and unanimously approved by
Carolyn Kosnoff, Fred Weiss, and Alan Fields. Meketa will update the Board on the process. They did
provide an updated Pacing Study within their presentation.
Will Hickey and Rich Thies presented the Driehaus review at 9:05 am. They began by mentioning
Driehaus is outperforming the benchmark. On a relative basis, India, Mexico, Technology and Utilities
are the strong contributors to the strategy. Meanwhile, China, Communications, and Consumer
Discretionary are the key detractors to the fund. Big value stock companies remain low on investors
radar at this time. Consumer and corporate spending is extremely low. Folks overseas are going out
and spending, just not a great deal. An example is the restaurant industry. People are dining, but are
cutting back on the amount being spent at establishments. The Chinese government is starting to ease
up on their attacks on businesses, which was not good for consumer confidence. Rich noted that India is
working well for the portfolio. It is up around 14% YTD. Investments are coming into India from China.
The presentation wrapped up at 9:25 am.
Jason Pomatto presented the Kayne Anderson Rudnick (KAR) at 9:27 am. He presented the Small-Mid
Cap Core Portfolio update. He focused on the high quality business stocks and returns. This year has
seen a high return rate on investments. Their top 10 holdings have resulted in an 80% rate of return,
despite some risk in tech and beta stocks. He highlighted some of the top contributors from the
presentation deck, including companies such as Thor and Bentley Systems. Thor Industries is an
assembler of RV’s. Even as RV sales slow down, Thor reaps the benefits of free cash flow because they
are not the vertical manufacturer. The technology sector was KAR’s struggle. They had 5 companies in
the portfolio that were low contributors, Aspen Tech and Zebra Tech suffered the most. Both had issues
integrating recently acquired businesses, as well as the softening macro environment. This resulted in a
selloff in the stock. Jason concluded the meeting by mentioning KAR’s new venture in the market is
Choice Hotels. They see great value within this sector. He wrapped up the presentation at 9:55
Robert Cunha had to depart the meeting at 9:40 am.
Joseph Foley made a motion to adjourn the meeting at 9:57 am, which was seconded by Carolyn
Kosnoff, and unanimously approved by Alan Fields and Fred Weiss.
The next Retirement Board meeting will be held on Thursday, September 28, 2023 at 8:30 am on Zoom.
Matthews Asia will present, led by David Dali.
_____ __________________
Robert Cunha, Chairman Alan Fields, Appointed Member
Carolyn Kosnoff, Ex Officio Member Joseph Foley, Elected Member
Frederick Weiss, Appointed Member