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tv   [untitled]    March 16, 2015 5:00am-5:31am PDT

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>> i would like to call the meeting to order. >> commissioner makras commissioner cohen pr
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commissioner bridges pr commissioner driscoll marry commissioner melberger commissioner paskin-jordan commissioner stansbury we have quorum quorum is presented. >> please join me in the of allegiance and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all couple of announcements item none 17 approval of the minutes for the retreat will be pulled and brought to the next meeting item number 5 will be staff presentation open important public comment i'll continue the
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vote on that item because the agenda did not properly identify the potential investment of a interesting amount i want that to be perfectly clear to the members of the public know what we're acting upon before the meeting takes place. >> excuse me. i'd like to acknowledging that supervisor avalos has joined us. >> number one public comment will be taking 3 minutes for public speakers today. >> good afternoon. i'm patrick commissioner paskin-jordan 2010 annual form one hundred ending 2010 lists an april 2009 investment
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and to a qualified hedge fund within 12 months it mysteriously vanished from her form seven hundred for 2011 ending in 2011 without indicating the date she disposed of that investment documented on the open up for public comment convict corporation write i didn't website includes a diagram a relationship between the qualified partners and another outfit called the capital partners fbi investigated that capital partners for fraud she lost they are investment in data qualified partner and was unable to have a hedge fund manager urging her personal fund
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sf pr s pensions beneficiaries have a damn good reason to worry about her ability to quote have a good hedge fund using our pension funds you shouldn't be involved in choosing hedge funds for the investment. >> mr. cooper is distributing copies of the article to the commissioners regarding the board of supervisors ash jefferson county underwriter failure to oppose commissioner paskin-jordan appointment we are conflict of interest should have disqualified her why should she think on the board while an investigations she appears to potentially used her position to
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finally benefit here on behalf of the project sponsor or her clients who oversight will dispose of allegations against her the board of supervisors the in relation this retiring you, you 0 - on that board a reasonable person would conduct their own investigation why have
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not you moved to protect our own >> thank you. next speaker, please. >> with them. >> i'm going to read this really fast i spoke last week i'm john first i'll reiterate two key points i tried to make at last meeting hedge funds are two risky with two many fees all the other stuff is secondary and second out of an allocation the hedge funds are one 20th of the risks in a allegation hedge fund is no the big risk the basic fact of the investment lies could i no simple solutions fear the bond rates their driven so
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low by banks around the world this is the source of income they don't serve either the 7.5 percent they've over valued and the math is very simple and daunting not only is it difficult to get to the target find ru7b9d but the event of another market is extremely bad in the crashing 09 bear market - >> crashing 2007, 09 market starred the offer 9 percent so the allocation for the purpose of diversely the equality risks who knows if it will go down warren buffett no one knows the chartered assets looks like
5:08 am chart in the tech bubble no one knows how it will turn out the banks uses up their ammunition and the debt has not been reduced this hive risky investment we should protect our portfolio i'll say that sf r a s tried to hedge it's hedge fund of the assets using the options i don't know if this feasible i suggest they go to experts and black rock down the block and . >> 30 seconds. >> no shortage of interprets tried to figure out this and why not have sf rb and you couldn't
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ask them then by traveling into hedge funds the hedge fund proposal is is an honest effect not to increase the risk your experts should be working with you sf tried to explain to the pension clients. >> time. >> it faces setting realistic things for stakeholders is as important as managing the assets. >> thank you, john>> thank you. next speaker, please. >> hello, i'm kay walker and this title hedge fund the philosophy and the mayor liable philosophy we're ruined by i hope quote from an expert
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on politics and philosophy this is the quote dearism as a philosophy in which the operation of a market are valeted in themselves operate isn't production of growth and services and without any attempt to justify them in terms of their effect on the production of goods and services where the operation of a market and market like structure is seen action a ethnic in itself capita of acting for all human actions and substituting so for all previously existing ethic california beliefs some of the key points of the philosophy is a turnover of folks a lot of hiring and conversion of actions until the market - into market
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interactions and the artifical act of stress when it comes to the hedge funds a good example i am recommending that everyone looks at those million dollar dollar traders by luke van dam an youtube probably some of you have heard of him he donated a million dollars to train traders and managers in hedge fund investing and this is a great shows how he actively we're going to, hiring manages that shows how he decided to hire people and trained them the actual appointees that did well in hedge fund i've read this a
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month ago that hedge fund investment is a group of strategies. >> 30 seconds. >> not necessarily a fund you will find this entertaining as an real show but you'll learn something about inside traders. >> thank you. >> you're welcome. >> thank you good afternoon commissioners right now, i'm representing the s c i u capital fund papering that is a letter hot off the press i apologize we don't have copies for everyone they'll be sent and we'll having copies for commissioner makras i'll read the letter i'm writing and request of sciu who have retirements secured by the retirement system is already the
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prelims felt hedge funds prelims i'm sorry, i can't participate to provide my thoughts we continue to have grave concerns about the allocation to mitigate the risks associated with that the next steps that the staff and consultants take a critically important in my experience in working with the funds it is best to have the fund and the selection of managers ideally they'll ask and be answerable to the board and not staff to guide the board in a policy in direct approach i'll urge the board to include questions and the consultants rfp that will help the board to understand which consultants have the best qualifications to
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insure the lowest fees and transcript to mitigate the risks we provided a list of questions attached for your consideration in the selection process including the refrance from hiring manager that support the benefit retention and hiring the consultants that have the experience working with clients when factor environmental, social and governance issues into their decision-making process sincerely margaret and some of the questions are is your firm of pure consultantcy if you offer investment product are the real conflict of interests mitigated will you require all hedge fund managers considered to be fiduciaries describe our experience and track record working with public
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pension clients please provide a list of the managers. >> 30 seconds. >> you recommend and describe our experience and success in negotiating lower fees how do you factor in the government to do their due diligence and what's your position on hiring hedge fund managers that undermine the preparation at the state and municipal level and late describe our experience in the investment in their hedge fund portfolio who wish to mitigate your hedge funds risks. >> any other speakers new seeing none, i'll close public comment call item 2. >> item 2 am action approve the minutes of the february 11, 2015 board meeting. >> anybody have comments or changes if not i'll entertain a
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motion of adoption. >> is there a second. >> second. >> open up for public comment. >> thank you commissioner makras. >> welcome back go patrick and february 11th meeting this board approved a one hundred million dollars investment with the energy fund two limited partnerships during closed session on december 10thok 3 most to get around to the reporting that you have so in closed session reports energy fund two a a is a private entity firm that invests in smoul small to midsize oil and embarrass companies outside of north america oil and gas have not been
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declarified as fossil fuel why did the c r f investing in the energy fund and the board of supervisors has been pushing you to divest from follows i will fuels they need to explain why there was one hundred million dollars i should be divesting from the minutes does not report how the ex officio board member commissioner cohen voted on the issue since presumably she was appointed to represent the supervisors interests in the oversight of the retirement fund out of curiosity commissioner cohen how did you vote on that
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investment. >> any point speakers on item number 2. >> hello commissioners jed from follows i will free san francisco i did have to overcome my comments of not talking about the disposition of minutes to back up what mr. chavez was saying we did see there was one hundred misdemeanors of private investment into this company and certainly no one has been in the idea you've ceased the fossil fuel investments but i do think that a one hundred million dollars investment that will be locked up for hover long is
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nationally noted what we're president the board to do for our funds at risk obviously this investment has been taken and what is done is done we hope that the retirement board will think long-term with making those kinds of investment it is this is locked up for 10 or 15 years where's the energy market going to be then are those prudent investments if be making now we august no, that 3 i hope as the 3456shg9 a changing we're taking on this information maybe a precautionary principle with those kinds of investments going forward thank you. >> thank you. any other speakers? >> i don't know if this is the
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right slot maybe under divestment but packing well investment has 3 risk factors for 2015 only the u.s. dollar will most likely be at the plunge there are other key points but anyway i hope you don't use any hedge open oil i mean any investment of any kind would be bad that's my comment on prudent investing and oil i certainly wouldn't want the derivative like gasoline and oil either. >> seeing no other speakers squeal close public comment we
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have a motion to approve the minute all in favor, say i. >> it passes. >> item 3. >> the action item of the consent calendar. >> many anyone wants to pull something ought to be discussed now it is time to pull it out otherwise another motion for adoption. >> i'll move adoption of the consent calendar. >> open up for public comment on the consent calendar seeing no speakers public comment is closed. >> all in favor, say i. passes unanimously item 4. >> consideration and possible level two engagement of 2 hundred companies under the boards social policies. >> 42 thank you, norman i'll have you do s a quick walk
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through. >> jd. >> yeah. i should have let norman know at the special meeting in february of the retirement board unanimously approved an engagement at level one of the companies that the retirement system owned that were on the carbon tractorer through the 2014 proximate new that be season we have the proximate i didn't see related to climate risk this was calendared last year after the board of supervisors in april passed a resolution that was urging the retirement system to devest from the carbon tractor list of companies in 5 years what; right we have provided in the materials an update as to
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the end of february 2015 our holdings and those cooker tractor 2 hundred list companies you'll notice through since a year ago our holdings have decreased by nearly $80 million those are decisions by the investment managers we've been requested to provide a report on a recommendation to the board to engage the cooker tractor for 2 hundred level companies we've defined what engagement maples this is proactively in concert with other stakeholders to insure recognize of shared interested that the core policies and the activities with that policy my
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mean direct communicates with the companies or individually with stakeholder communication we've provide a section that provided to the board previously related to their fiduciary responsibility and the roll that they need to play the fiduciary role needs to play in addressing social and environment and gfrps issues under the boards policy and updated the activities since we've last spoken in february related to colleges and universities who have decided to divest from specifically the carbon risk companies and also public pension plans a special note at the loose investment committee we heard from cal spurs representative a senate bill that calls on california
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next year's to divest but a definition and this has been introduced and work its way through the states legislator and the state has taken an action from the deinvestment from the fossil fuel and the risks that are associated with holdings in relation to regulations both state as well as federal regulations and also provided as sort of a final written report to the board of our proxy voting records i'm sure you're aware of the climate risk resolutions reduced from 292013 to 25 in
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2014 we've basically provided the rational under the boards policy for the votes in all 45 of those resolutions and then we have provided alternates that sideboard consider should the board decide to gave me at level two including the joining of the investments groups on climate risks which is a project of seizure we've had public comment before the retirement board we believe this is a coalition that will be whoeshth joining it has more than a hundred members represents over $11 trillion in investment money we believe that your affiliation we just don't pay our dues but have to participate and will be
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calling on the commission as well as staff to at that particular time in the activities related to this we believe that this has been a very influential impactful organization we'll he definitely remote that should the board gave me as level it we'll join this organization we have the cooker risk initiative cooker at risk initiative started in december 2013 it is a group of 70 local investors managing $3 trillion and they've targeted 45 of the world's top gas and cool electrical companies to the effects of the cooker on their business plans those are the initiative and their asking to address how they intend to deal with the potential or the
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reality of assets from a business plan prospective how spurs and state of new york their members in the a group we'll consider in the board wanted to engage at level 2 we'll join with the coalition that targeted the carbon asset risk and then we have the united nations principles for responsible investment the pr i this is an international network of investors working together to put 6 promises for responsible investment into practice i've provided you copies with that and those principles their volunteer, however, when you become a significant for to supporting those principles there's an attached evaluation of how the public or plan has
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implemented those principles so there's obviously more than just signing occupying on but making sure we follow through with the related steps we've provided for the boards consideration when we call a complimentary or level two engagement we believe that we should as a staff we started looking at we believe that we should present and have the board consider an holistic approach to both environmental social and governance issues we know that many public plans have instituted and adapted what we call the e s g policies we would like to suggest as a compliment to a level 2 engagement that there be be instituted an ad hoc committee to work through to
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have the goal of bringing to the retirement board conceptual be start to finish of our business practice e f g policy for the boards consideration this is objective without direct staff recommendation because under the social investment policy that is a decision of the board however, we believe that if the board should decide inform engage at level two to take all the recommendations and we'll be willing to bring back a timeline to you if this is adopted and that we can go forward alters level 2 if that's the boards desire i'll be happy to answer any questions. >> okay. great open up for questions at this