HomeMy WebLinkAbout2018-06-28-RB-min Minutes of the June 28, 2018 Retirement Board meeting:
Present: Robert Cunha, Alan Fields, Carolyn Kosnoff, Marguerite Oliva and Jim Condon
Absent: Frederick Weiss and Joseph Foley
NEW MEMBERS: (10) Matthew Cunha, Kyle Pursell, Sean Sullivan, Jessiel Alfonzo, Police
Officers; Claudia Cromer, LHA Program Coordinator; Michelle Techler, Librarian; Emily
Lesch, Admin. Asst.; David McKenna, Custodian; Reid Warnock, Jonathan Kimball, Firefighters
DEATHS: (1) Lisa Vassallo, Survivor of John Vassallo, 04/04/2018
RETIREMENTS: (1) Jennifer Chen, School Aide, 6/30/2018
The Board accepted the 063018 Warrant and June payroll. The May 2018 minutes were
reviewed and approved, as well as the cashbooks for April 2018.
Bob reviewed the Board Agenda for this month and spoke briefly regarding the PERAC decision
on whether the retirement board should take retirement deductions for those on Workers'
Comp. This stems from a memo we received from Michael Sacco and Memo#17, which
supersedes Memo#12 from PERAC. The memo is in reference to the Vernava decision issued
by the SJC back on February 13, 2018 regarding vacation and sick time being considered regular
compensation in conjunction with Workers' Compensation benefits.
Bladen Burns from FMI Large Cap Fund began his conference call into the Board at 8:30 with his
update. He noted his presentation figures are based on performance through March 2018.
Since inception on May 3, 2012, with a portfolio value of 5m, the overall portfolio value as of
3/31/2018 is 5,532,908.00. They are struggling to get ahead of the S & P 500, which is up 2%
for 2018. He feels they are stuck in a "bear" market, with only a few of their holdings working
for them, and states there is not much value out there. However, FMI added four new
corporations to the portfolio. Quest Diagnostics Inc., Smith & Nephew PLC, Pepsi Co., and
Massco Inc. These were chosen to offset the reduced position they have within UnitedHealth
Group. Bladen went on to state technology stocks do not perform well within their portfolio,
and the need for a non-volatile market to operate well. Also, 40%, up to 50% of the portfolio is
in a defensive mode. He mentioned they recently sold Comcast/Fox shares for risk mitigation
purposes. Walt Disney had announced their intention to acquire a collection of 2111 Century
Fox content, which led to the FMI sell-off of shares. Bladen finished his presentation to the
Board at 8:55 AM.
Alan opens the conversation around the FMI presentation. He has issues in terms of the
management style. The current managers for FMI do not seem to be performing well like other
ones out there. They are taking no risks, and holding onto cash too long. Plus, they are not
executing well with some big names in the portfolio. It seems to be the same slow cycle as it
was last year. They need more exposure in the market and take risks. Alan feels they are
actually giving up returns for our portfolio based on the way it is being managed.
Henry Jaung and Tom Dunleavy presented the Meketa Update. Tom is filling in for Steven
McLellan this month. We recently received a distribution from Beacon Capitol for$48,000.00.
Henry presented the PRIT Fund performance chart. Our Equity holdings have outperformed
PRIT Core thru 5/31/2018. The portfolio balance as of 5/31/0218 is $171,356,325.00, up 2.4%
YTD. Last month's balance was $170,653,379.00. Fidelity Contafund is performing well in our
portfolio throughout the recent market turbulation. It is currently up 8.5%for the year, and
4.1%for May.
Henry mentioned we could take more cash out from Contrafund, but hold off until after the
mid-term elections are over. He stated emerging markets are going to struggle due to
turbulence in the currency markets overseas. We are overweight in US currency right now,
however, the US economy is very strong at this point. Also, the S & P 500 is expected to grow
up to 17% over the next 18 months. Henry also recommended we start looking for a Pure
Value Manager by the end of 2018.
Lastly, we were advised the search for a new Senior Direct Lending Manager has been
narrowed to four candidates. They are Golub, Monroe, Angelo Gordon/Twin Brook, and
Alcentra. Alcentra is a European firm which primarily lends to European businesses.
Bob Cunha motioned to adjourn the meeting at 9:40, which was seconded, and unanimously
approved.
The next Board Meeting will be held on Thursday July 26, 2018 at 8:00 AM in Cary Memorial
Li bra ry.
Matthews International will attend this meeting.
Robert Cunha, Chairman Alan Fields, Appointed Member
Carolyn Kosnoff, Ex Officio Member Joseph Foley, Elected Member
Frederick Weiss, Appointed Member