HomeMy WebLinkAbout2020-04-30-RB-min Minutes of the April 30, 2020 Retirement Board meeting:
Present: Robert Cunha, Joseph Foley, Alan Fields, Fred Weiss, Carolyn Kosnoff and James Condon
NEW MEMBERS: None
RETIREMENTS: None
DEATHS: (7) George D. Anderson, Detective LPD, 03/27/2020; Katherine Leone, Survivor of Michael
Leone, 3/30/2020; Sandra Hart,Payroll Clerk, 04/11/2020; Charles Harvey, Firefighter, 04/12/2020;
Lucille Aquaro, Survivor of Michael Aquaro, 04/09/2020; John L. Fradette, Firefighter; 4/13/2020;
Charles E. Jefferson, DPW manager, 4/24/2020
The Lexington Retirement Board met through the Zoom telephone conferencing network due to the
ongoing Covid-19 pandemic. All Board members were present for the meeting. The Office of the Clerk
Meeting posting included the dial in requirements for any interested party.
The Board accepted the 043020 Warrant and the April payroll. The March minutes were reviewed and
approved.
Bob Cunha reviewed the April agenda with the Board members and staff in attendance. There is no new
information regarding Mr.Joseph O'Leary and Mr. Ryan Bugler. Mr. Donald LaConte was provided a
second informational packet regarding his ADR Benefits. Once the paperwork is returned, our office will
move forward with converting his current SA pension to the ADR pension.
Board members were reminded of Q2 online trainings via PERAC website for educational credits.
Ken Baumgartner and Scott Chandler presented the Wellington Opportunistic and Enduring Assets
funds. The Enduring Investment fund has a balance of$21.5 million as of 3/31/20. The fund is down
15.6%YTD due to the global pandemic. Despite the figures, data infrastructure was very beneficial in
holding the fund from further downslide. Broad equities were down about 10%. Toll roads and airports
have taken a major hit during the past two months. The pandemic has led to flights being grounded and
many people working from home. The market is now losing major growth from companies. Conducting
business has been interrupted over the past 7 weeks. The Opportunistic Fund stands at$12.7 million on
3/31/20. This fund works on three drivers for total return. Strategic, market neutral, and tactical
themes. Unfortunately,the funds had dropped 20%over a three (3) month period in 2020. 65% in
equity and 35% in fixed income. This has pushed the benchmark down 12.7%. March encountered its
biggest losses. Scott spoke briefly about key positioning details such as Dislocated Contrarian Value and
Activist Governments. It regarded strong balance sheets and attractive valuations that could leave EAFE
value stocks to outperform in the future. With government, inflation rates are expected to rise and
some populist governments are already promising higher fiscal spending.
BlackRock Global Renewable Power III is presented by Trey Smith and Catherine Campbell at 9:30 am.
This is a climate infrastructure fund that BlackRock is introducing to Lexington. It is a stable growth and
recurring income fund over the long-term. It focuses on solar,wind and renewables; onshore wind
being the major component. BlackRock currently has over$6 billion invested in 250+wind and solar
projects. They are spread out over 11 countries. As oil and gas are getting hit hard, BlackRock is in a
reset mode to obtain investors and jumpstart this fund. They see many opportunities on the rise over
the next 5-7 years. BlackRock feels this fund will have 10% returns, such as Funds 1 and 2. They have
much more capitol coming to them. Half of their cash yield comes from pre-construction and
construction of facilities.
Henry Jaung and Steve McLellan presented the Meketa update. It began with some skepticism over
BlackRock. Fred is concerned about the exit strategy. For instance, if we want to exit in 7 years,what
does the market even look like? Alan feels the same. The term of the fund is 12 years. The issue getting
into this fund is the return, not so much the success of it. What would be the rate of return 7-10 years
from now? The IRR exit doesn't appear to fit well with Lexington's portfolio.
The portfolio balance as of March 31, 2020 was$157,636,670.00. YTD portfolio is down -14.2%. The
global pandemic continues to send global markets downwards. All equity asset classes are down -18%,
and real estate is down -4.5%. There are no real surprises in the figures reported. Henry noted we have
great managers out there working to get the numbers to turn in the second quarter. Total U.S market is
down close to 20%as of April 29, 2020. Our total fund aggregate net through April 24th was projected at
-10.68%.
Henry Jaung introduced a potential new investment for the Lexington Retirement Board portfolio. TALF
2.0,Term Asset-Backed Securities Loan Facility. This is a program designed to have private investments
in asset backed securities by providing federal government loans to investors through the NY Federal
Reserve. It is designed to help stabilize capital markets and generate strong returns for its investors. The
program entails a three (3)year lock in period. Meketa has identified Wellington and Payden as two
dedicated TALF eligible asset vehicles for this investment. Both are highly rate and are projected to
generate 7%- 10% return.
Bob Cunha made a motion to transfer$8m from the Real Estate fund to Cash. The motion was
seconded by Fred Weiss, and approved by Joe Foley and Alan Fields.
Fossil Fuel exposure is 2.8%. It is 1.3% lower than the December 2019 figure.
Bob Cunha motioned to adjourn the meeting at 11:00 am,which was seconded by Joe Foley and
approved by Alan fields and Fred Weiss.
The next Retirement Board meeting will be held on Thursday, May 28, 2020 at 8:30 am. The meeting
will be held via Zoom tele-conference. Fidelity Investments and Fiduciary Management have been
invited to present.
Robert Cunha, Chairman Alan Fields, Appointed Member
Carolyn Kosnoff, Ex Officio Member Joseph Foley, Elected Member
Frederick Weiss, Appointed Member