MINUTES OF THE INVESTMENT MANAGERS MEETING. City of Aurora General Employees' Retirement Board

Transcription

1 MINUTES OF THE INVESTMENT MANAGERS MEETING 1) 8:00 AM- Meeting Called to Order Roll Call City of Aurora General Employees' Retirement Board East Iliff Avenue, Suite 108 Aurora, CO Chairperson John Lichtner Legislative Members Rebecca Bryant-Haight Michelle Reding Helen DiBartolomeo Dawn Jewell David McConico Sue Sandstrom Nonvoting Members Janice Napper (for Skip Noe, City Manager) Ted Frost (for Jason Batchelor, Finance) Dan Quillen (Human Resources) Stacie Harding (City Attorney) Staff Thomas Connell Aaron Kahn 2) Third Quarter 2014 Investment Performance Report Bryan Summers - Callan Associates Bryan Summers noted that Northern Trust had taken over from State Street Bank & Trust as the Plan s custodian in August. Also in the quarter, the Morgan Stanley Prime Property Fund was selected to replace the BlackRock Granite Property Fund, and the Cadence Capital Management small cap growth account was terminated. Those assets were transferred to Smith Graham & Company, whose U.S. equity mandate was expanded to include both small and midcap stocks. PIMCO announced in late September that Bill Gross, its CIO and co-founder, had resigned and was replaced by Daniel Ivascyn. An experienced three-person team has assumed management of the Total Return Fund. GERP s portfolio lost 0.30% in the 3 rd quarter but gained 11.75% for the year ending September 30, ) Dodge & Cox International Stock Fund Matt Beck Matt Beck noted the stability of Dodge & Cox s process, approach and management team. Dodge & Cox s investment strategy uses value-oriented fundamental analysis, with a focus on high

2 Minutes of the Investment Managers Meeting Page 2 conviction stocks which leads to very low turnover. Global industry analysts bring their best ideas to sector committee teams. Dodge & Cox s emerging markets exposure, especially in the financial and telecommunications sectors, significantly contributed to results. The underweight to Japan had a positive impact, as did the overweight to information technology. Detractors to performance included European financial holdings, the health care sector and underweight to utilities. Mr. Beck noted that the fund currently has hedges against the euro. In the past they have hedged against the yen. The International Stock Fund returned 13.19% for the year ending September 30, 2014 and had an annualized return of 9.38% for the latest five year period. During the same period the MSCI EAFE index returned 6.56%. 4) American Funds EuroPacific Growth Michael Bowman, Mario DeVito American Funds is part of Capital Group which was founded in 1931 by Jonathan Bell Lovelace. Capital s system enables investment professionals to act on their highest convictions. Each portfolio is divided into portions that are managed independently by investment professionals with diverse backgrounds, ages and investment approaches. American Funds EuroPacific Growth had a loss of 4.21% for the 3 rd quarter and a return of 7.37% for the year ending September 30, ) American Century Non-US Small Cap Chat Cowherd, Laura Granger American Century Investments was founded in 1958 by James Stowers, Jr. In 1994 James and Virginia Stowers, both cancer survivors, founded the Stowers Institute for Medical Research, which holds a 40% stake in American Century Investments. The American Century investment philosophy takes advantage of market inefficiencies at inflection points with buy and sell strategies that focus on periods of accelerating or decelerating growth. Investment professionals use quantitative screens and fundamental analysis to identify catalysts for change in growth and to verify that the change is genuine and sustainable. American Century Non-US Small Cap Trust had a loss of 8.15% for the 3 rd quarter and a return of 4.40% for the year ending September 30, 2014.

3 Minutes of the Investment Managers Meeting Page 3 6) Board Discussion on Investment Performance Bryan Summers, Callan Associates Callan Associates recommends that GERP put PIMCO on watch due to organizational changes and Board members agreed. Helen DiBartolomeo moved and Michelle Reding seconded a motion to place PIMCO on the watch list. The motion passed unanimously. David McConico asked how the Board could better assess the performance of its investment consultant, including setting goals and creating greater accountability. Bryan Summers noted the difficulty in attributing performance to the consultant when the Board has final say on all investment decisions. David McConico moved and Rebecca Bryant-Haight seconded a motion to adjourn. The motion passed unanimously. Meeting Adjourned at 10:36 AM Minutes Submitted by Aaron D. Kahn Minutes Approved John M. Lichtner 1/15/15 Chairperson of the Board Date

4 MINUTES OF THE REGULAR MEETING City of Aurora General Employees' Retirement Board Held Thursday, December 11, East Iliff Avenue, Suite 108 Aurora, CO ) 8:00 AM - Meeting Called to Order by David McConico, Vice Chairperson Roll Call Chairperson John Lichtner Legislative Members Rebecca Bryant-Haight Helen DiBartolomeo Dawn Jewell David McConico Michelle Reding Sue Sandstrom Nonvoting Members Janice Napper (for Skip Noe, City Manager) Ted Frost (for Jason Batchelor, Finance) Dan Quillen (Human Resources) Stacie Harding (City Attorney) Staff Thomas Connell Aaron Kahn 2) Approval of the Minutes Sue Sandstrom moved and Dawn Jewell seconded a motion to approve the minutes of the regular meeting held on November 20, The motion was passed unanimously. 3) Treasurer s Report Tom Connell reviewed the investment performance for September. As of December 9, 2014, the fund was valued at approximately $405.5 million. 4) Review of Lump Sum Distributions for November Seven participants received lump sum payments totaling $164, ) Approval of Retirement Benefits Aaron Kahn presented the retirement calculations. Michelle Reding moved and Dawn Jewell seconded a motion to approve retirement benefits for Gerald J. King, Tillman O. Petty, Ronald Shiarla and Stephen J. Wathen. The motion passed unanimously.

5 Minutes of the Regular Meeting Held Thursday, December 11, 2014 Page 2 6) Old Business There was no old business. 7) New Business A) 2015 Interest Rate for Employee Contributions Tom presented data on the interest crediting rate used by GERP since City Council gave the Board the discretion to set the rate at the start of each year, provided it is no less than 3%. Dawn Jewell moved and Michelle Reding seconded a motion to leave the interest rate credited to employee contributions at the current rate of 4%, compounded biweekly. The motion passed unanimously. B) Investment consultant work plan and goals Tom reviewed Callan Associates work plan for Callan has suggested a review of the fixed income structure along with an educational presentation on alternative strategies. David McConico suggested that they also provide education on emerging managers. Public Comments There were no public comments. 8) Staff Report Tom stated that approximately 180 attendees are expected this evening at GERP s Holiday Reception. Tom noted that on January 1, GERP staff s health insurance will be switching from Humana to Colorado HealthOP, a non-profit health insurance provider. Helen DiBartolomeo expressed her interest in attending HarbourVest s annual meeting in May Dawn Jewell moved and Sue Sandstrom seconded a motion to adjourn. The motion passed unanimously. Meeting Adjourned 8:45 AM Minutes Submitted by Aaron D. Kahn Minutes Approved David L. McConico 1/15/15 Vice Chairperson of the Board Date