PB 02/12/2019 Minutes - Laserfiche WebLink

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2. Dave West commented he would also review some core real estate managers for a possible allocation, as the plan was under target in the real estate portfolio. 3. Dave West briefly reviewed their firm's growth and experience. 4. Dave West gave a brief overview of the market environment during the quarter. Dave commented both international and domestic equity markets had considerable losses during the quarter. 5. Dave West reviewed the asset allocation and commented everything was in line with the Investment Policy Statement (IPS). Dave commented the overweight in equities really hurt the plan in the fourth quarter due to the market correction that occurred. 6. The market value of assets as of December 31, 2018, was $23,414,827. 7. The total fund gross returns as of December 31, 2018, were -9.50%, underperforming the benchmark of -7.64%. The 1, 3, 5, and 7 -year total fund gross trailing returns were -4.55%, 5.89%, 4.48% and 7.73% respectively, comparing to the benchmarks of -3.19%, 6.72%, 5.80%, and 8.35% for the same periods. Since inception (11/1/1998), the total fund gross returns were 5.75%, outperforming the benchmark of 5.56%. 8. Dave West reviewed the performance of each manager. Dave commented the real estate portfolio was not affected by the market and had a positive return for the quarter. Dave commented the real estate portfolio added stabilization to the portfolio. Dave did not recommend any manager changes. 9. Dave West reviewed the financial reconciliation and commented the plan depreciated $3,596,851 for the quarter. ii. Core Real Estate Manager Analysis. 1. Dave West commented the current real estate target is 10% and the plan currently has a 6.5% allocation. Dave commented the plan could either allocate additional funds to American Realty or diversify their real estate portfolio, or hire an additional real estate manager. 2. Dave West briefly reviewed Principal, American Realty, and PGIM Real Estate funds. Dave commented the PGIM fund was the most conservative manager. 3. Dave West reviewed the key differentiators between the three real estate managers. Dave commented that all three managers would lower their stated minimum to $1 million. Dave reviewed the queue for each manager, stating that American Realty had a 6-8 quarter queue, PGIM had no queue, and Principal had a 3 -quarter queue. 4. Dave West reviewed the target return for each manager. American Realty had an 11-13% net target return, PGIM had an 8-10% net target return, and Principal had an 11-13% net target return. Dave reviewed the comparative performance for each of the managers. 5. Dave West commented all three managers were good options, but that it would be up to the board to decide how far they wanted to step outside the current real estate philosophy. 6. The board discussed the queues for the managers. Dave confirmed the plan would not be able to get into American prior to their stated queue even though the plan already had an affiliation with them. 2