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From YouTube: Oklahoma City Employee Retirement System - May 14, 2020
Description
The regular monthly meeting of the Oklahoma City Employee Retirement System, via video conference, of May 14, 2020.
C
A
C
A
A
B
A
D
D
E
Not
believe
that
will
need
to
go
into
executive
session
on
this
item.
I
tried
to
visit
would
be
to
the
trustees
separately
and
independently
to
go
over
the
medical
reports
that
we've
received
on
these
individuals
and
based
on
that,
my
review
and
Renee's
review
of
the
medical
records
and
the
disability
that
they're
claiming
in
the
case
of
Kevin
Jones.
We
believe
that
the
board
should
approve
the.
E
Mr.
chairman,
again,
this
is
why
the
Williams
deputy
city
attorney
and
we
will
not
need
an
executive
session
on
this
item
either
as
I
advised
each
of
you
independently.
The
medical
record
support
that
mr.
slim
is
100%
disabled
from
the
injuries
he
sustained
and
it
isn't
more
than
likely
routes.
The
board
makes
the
decision,
but
it's
our
recommendation
that
he
has
a
disability,
not
in
the
line
of
duty
and
it's
entitled
to
the
be
awarded
that.
A
F
You
may
recall
we
began
to
go
down
the
path
of
identifying
a
what
we
describe
as
a
liquid
absolute
term
bond
replacement
for
Pam
Co,
which
is
a
diversified,
absolute
return,
hedge
fund
of
funds
that
you've
been
in.
We
intended
to
interview
candidate
managers
at
the
March
meeting.
We've
we've
put
that
on
hold
for
now,
however,
we
intend
to
proceed
with
this
or
we,
our
recommendation
would
be
to
continue
to
proceed
with
this
transition
in
the
portfolio
pant.
F
Further,
it's
going
to
take
some
time
they're
not
going
to
because
of
the
less
liquid
nature
of
the
the
strategies
in
which
they're
invested.
All
of
the
money
will
not
come
back
the
end
of
September.
It
will
likely
take
several
months
for
that
to
fully
liquidate,
so
we're
going
to
have
plenty
of
time
to
identify
the
the
replacement
manager.
So
really,
this
is
a
ministry
of
operational
issue
that
just
felt
that
needed
to
be
addressed
to
further
what
was
was
planned
with
the
replacement
for
for
Pam
Koh.
A
F
So
as
we
embark
I
guess
on
our
our
second
remote
meeting,
you
know
things
I,
don't
probably
mentioned
this
last
time,
but
we're
all
recognizing
how
well
our
business
continuity
plans
and
remote
working
from
home
plans
have
been
executed.
Really,
we
continue
to
see
no
no
hiccups
and
our
ability
to
monitor
client
portfolios
communicate
with
with
managers
and
get
client
reports
out
to
you
all.
Certainly
the
the
most
challenging
thing
is
not
being
able
to
meet
in
person
is
something
that
we're
certainly
looking
forward
to
doing
sooner.
A
F
F
You
made
up
quite
a
bit
of
ground
from
where
you
were
in
March
just
to
reset
in
terms
of
values
where
we
are
2019
was
a
outstanding
year
in
the
equity
markets
in
your
portfolio,
I
think
the
the
overall
portfolio
at
the
end
of
the
calendar
year
2019,
was
at
an
all-time
high
and
just
a
little
under
800
million
at
794
million.
It's
important.
We
go
back
and
just
look
at
where
you
were
at
the
end
of
18
December
of
18
was
the
calendar
year.
2018
was
a
somewhat
of
a
challenging
period
portfolio.
F
F
At
the
end
of
April,
with
the
bounce-back
in
equities
and
some
fixed
income
sectors
high-yield
and
non-us,
the
portfolio
stood
at
730
million
in
market
value,
taking
out
the
approximately
31
million
that
was
used
for
benefit
payments
and
operations
on
a
return
basis
down
slightly
down
about
20
million
from
the
peak
from
where
you
were
at
the
end
of
2019,
but
up
significantly
from
the
end
of
2018.
That's
not
to
say
that
things
are
in
good
shape.
F
Today,
at
least
prior
to
this
week,
our
outlook
for
most
equity
asset
classes
was
that
they
were
overvalued
relative
to
the
more
recent
historical
average
values,
as
we
saw
valuations
run
up
significantly
in
the
month
of
April,
was
still
quite
a
bit
of
uncertainty
around
earnings.
So
while
prices
were
up
that
the
denominator
in
that
equation,
the
p/e
equation
the
earnings,
a
lot
of
uncertainty
around
that
tied
to
where
we
are
in
terms
of
the
economy
opening
up.
F
So
that
said,
we
continue
to
want
to
be
cautious
and
how
portfolios
are
deployed
really
getting
to
targets
where
we
can
at
rear
asking
to
equity
targets,
but
not
over
weighting,
equities,
necessarily
and
also
being
thoughtful
about
ongoing
cash
needs.
You
may
recall
the
commodities
allocation
was
eliminated
prior
to
all
of
this,
from
a
strategic
from
your
strategic
allocation.
That
money
came
back
about
20
million
and,
at
the
end
of
February,
its
earmarked
in
the
strategic
allocation
to
be
reallocated
to
real
estate,
your
core
and
opportunistic
real
estate.
F
A
small
amount
of
that
was
called
about
two
and
a
half
million
of
the
ten
million
of
the
nine
million
committed
to
Morgan
Stanley
prime
property
fund
was
called,
but
there's
it's
going
to
take
some
time
for
those
real
estate
funds
to
call
that
capital
down
as
as
opportunities
for
them
to
put
capital
to
work
right
now
or
are
pretty
limited
and
they're
being
fairly
cautious.
So,
as
you
look
at
the
the
April
30
report,
overall,
the
allocation
to
equities
is
much
on
target.
Your
about
a
half,
a
percent
above
the
overall
target
weight.
F
Most
of
the
overweight
is
with
within
large-cap
us,
which
continues
to
outperform
other
asset
classes.
Your
small
cap,
us
is
slightly
overweight,
long/short
equity,
which
has
been
a
real
positive
in
this
period,
protecting
quite
a
bit
in
the
month
of
February
and
March,
and
so
on
on
a
trailing
one-year
basis
has
been
very
additive
to
the
overall
portfolio
right
at
targets:
private
equity.
Now
because
the
valuation
hasn't
adjusted
like
public
markets
you're
at
your
target,
they're
a
little
bit
underway
to
international
and
emerging
markets
is
effectively
at
your
target.
Weight.
F
Fixed
income
overall
is
slightly
overweight.
The
big
underweight
is
in
real
estate
or
real
assets,
and
that's
it's
just
going
to
take
some
time
and
coming
into
this,
you
were
underweight
real
assets.
We
took
money
from
commodities
and
we're
still
trying
to
get
that
to
work.
That
said,
we're
comfortable
with
how
your
position
you'll
note,
there's
there's
a
fairly
large
cash
position
of
thirteen
point:
six
million
we
talked
about
this
last
month.
This
is
that
money
that
came
back
from
commodities
there's
still
about
seven
and
a
half
million
of
that.
F
So
at
this
point,
we're
rather
than
having
to
put
it
to
work
and
then
sell
to
raise
money
for
your
operating
needs,
we're
comfortable
just
holding
that
in
cash
and
being
a
little
bit
more
cautious
and
conservative
and
allocating
it's
still
less
than
two
percent
of
your
overall
assets
so
comfortable
with
where
things
are
allocated
today.
Just
looking
at
the
performance
for
the
month
as
I
mentioned,
acid
values
were
up
that
equated
to
about
a
little
over
a
six
and
a
half
percent
return
for
the
month
of
April
year-to-date.
F
Overall,
your
equity
strategies
have
protected
for
the
most
part
small
cap
on
a
year-to-date
basis,
while
down
it's
protected
by
about
6%
down
6%
less
than
the
overall
small
cap
market,
longsword
equity,
as
I
mentioned,
that
the
hedged
equity,
the
Mauna
Kea
platform,
really
providing
pretty
significant
protection
down
less
than
3%
versus
the
global
equity
benchmark,
which
is
down
almost
13%
for
the
year.
Your
international
develop
manage
errs,
harding,
leavener
and
Lazard
down
about
16%,
that's
less
than
the
international
markets.
F
Parting
leavener
on
the
growth
side
has
as
protected
quite
a
bit
a
little
bit
more
challenging
for
Lazard
value.
Orientation.
Value
has
really
struggled
the
value
strategies
and
the
value
sectors
dominated
by
energy
and
financials
has
been
a
pretty
big
head.
Wind
wouldn't
consider
Lazard
to
be
a
deep
value
manager,
more
relative
value,
but
certainly
lagged
a
bit
in
this
period,
just
to
put
that
how
dramatic
that
is
on
a
one
year
basis
through
yesterday.
The
difference
between
lark
in
it
domestically
between
growth
and
value
is
about
30
percent
differential.
F
E
F
Certainly
not
capitulating
on
value.
We've
seen
this
before
in
the
late
90s,
and
and
saw
what
happened
following
that,
but
certainly
the
sustained
low
rates
have
been
an
impact
on
the
small
cap
side,
your
manager,
earnest
Partners,
which
has
a
value
orientation
they've
done
very
well
because
they
well,
while
they
do
focus
on
value,
they
do
have
a
quality
innings
component
to
them.
That
has
allowed
them
to
fare
fairly
well,
while
the
equities
have
have
done
very
well
relative
to
the
long,
only
benchmarks,
fixed
income,
just
how
your
position
I
know.
F
We
talked
about
this
quite
a
bit,
but
it's
important
to
know
the
fixed
income
relative
to
what
we're
comparing
to
has
struggled
on
a
mark-to-market
basis.
We
don't
believe,
there's
significant
permanent
impairment
in
these
portfolios,
but
we're
comparing
all
of
your
fixed
income
allocation
to
a
benchmark
that
is
predominantly
US
Treasurys
and
agencies,
which
is
highly
sensitive
to
the
direction
and
rates.
So
it's
not
just
been
calendar
year
2020,
where
we've
seen
Treasury
yields
plummet
to
about
ten
year.
Treasury
today
is
at
about
sixty
five
basis
points
really
2019.
F
We
saw
Treasury
yields
go
down
dramatically
from
about
three
percent
at
the
begin
of
eighteen
to
one
and
a
half
percent,
or
so
at
the
end
of
2019.
As
those
rates
came
down,
the
value
of
core
bonds
or
the
aggregate
index
went
up
other
fixed
income
sectors,
high-yield
emerging
market
debt
and
some
of
the
things
that
you
have
within
your
fixed
income
portfolio,
particularly
the
Brandywine
non-us
and
the
panco
strategy,
not
nearly
the
sensitivity
to
interest
rates
going
forward.
F
The
the
rationale
for
how
your
fixed
income
portfolio
has
been
positioned
as
a
investor
with
long
term
liabilities
where
you
need
and
I
know,
you've
been
recognizing
the
expectation
for
muted
returns.
By
lowering
your
return
assumption,
you
still
have
a
long-term
return
assumption
in
the
7%
range.
If
we
look
at
fixed
income
and
US
investment
grade
bonds,
particularly
Treasuries
and
agencies,
now,
with
a
yield
of
less
than
1%,
makes
it
pretty
challenging
to
have
a
significant
allocation
to
bonds
and
with
a
long-term
expectation
of
getting
that
7%
short
of
just
taking
on
equity
market
risk.
F
We
think
it's
important
to
maintain
bonds
in
your
portfolio,
the
high-yield
non-us
sovereign
debt
within
Brandywine
and
and
what
we're
looking
to
add
as
a
replacement
to
Pam
Koh
and
the
liquid
absolute
return
sectors
just
provide
strategies
with
more
dynamic
ability
to
navigate
fixed
income
markets.
The
case
for
that
is
even
more
compelling
today
from
a
return
standpoint
in
terms
of
the
opportunity
going
forward
to
invest
in
securities
that
have
a
higher
yield
going
forward,
particularly
yields
at
50
basis
points.
So
the
dispersion
relative
to
your
policy
index
while
pronounced
it's
not
unexpected.
F
Fortunately,
the
equities
really
provided
a
lot
of
protection
in
this
period,
so
going
forward.
I
think
where
we
are
today.
We
want
to
push
ahead
and
I
know
the
the
environment.
We're
in
that
meeting
personally
does
have
some
impediments
to
that,
but
we
do
want
to
push
ahead
with
things
that
were
on
the
agenda,
particularly
the
liquid
absolute
return,
as
I
think
I
mentioned
last
month.
F
We
think
the
activity
is
going
to
be
picking
up
in
these,
as
prices
have
come
down
dramatically.
We
were
looking
carefully
right
now
at
some
new
opportunities
within
the
distressed
distressed
space.
This
is
an
area
that
you'd
made
fairly
significant
commitments
to
in
2009
your
early
private
equity.
Your
earliest
private
equity
commitments
were
to
some
distressed
strategies
that
really
perform
very
well.
The
singular
Guf
distressed
opportunities
fund
that
you
committed
to
in
2009
has
delivered
about
for
every
dollar.
F
Forward
to
getting
back
to
seeing
you
in
person,
I
know
they're
in
Oklahoma
you're
a
little
bit
further
ahead
of
us.
While
Missouri
had
the
state
the
go.
Our
governor
has
lifted
stay
at
home
orders,
st.
Louis
County
in
st.
Louis
City,
where
our
offices
are
are
still
under
the
pretty
significant
stay
at
home
restrictions,
so
not
sure
where
we
are
with
respected.
F
F
So
you
have
a
5%
target
to
private
equity
and
your
your
just
a
little
bit
under
that
in
terms
of
invested
value,
but
we
know
that
money
is
gonna
continue
to
come
back
over
time.
So
you
have
to
continue
to
make
commitments
will
be
thoughtful
in
that
pacing
of
what
can
be
put
to
work
as
you
have
today.
F
You
have
35
million
in
invested
value
and
roughly
the
same
amount
in
unfunded
commitments,
some
of
which
some
of
that
unfunded
commitment
is
going
back
to
the
earliest
funds
from
onine
that
that
probably
won't
be
called
so
maybe
about
34
million
and
unfunded
commitments,
which
we
would
expect
to
be
put
to
work
over
the
next
three
to
five
years.
So
you
really
need
to
continue
to
put
capital
make
commitments
to
be
invested
over
that
we're.
Looking
those
commitments
are
really
to
fund
investments
over
the
next
three
to
five
years.