Yeah, we're gonna myself.

I didn't see it.

I know we need that and Cindy's gonna be working with this.

Oh, yeah, look at that.

Everybody's getting a turn.

Oh, you're writing in it.

Oh, they are it'll focus on anyone speaking.

Oh, okay.

We have everybody.

All right.

Okay.

It's 1203.

I'll call the March 26th meeting of the Board of Investment Commissioners to order who's asked first year roll call.

Chairman Mayor Smiley.

Vice Chair Women Silveria present.

Mr.

Husband.

Present.

Councilwoman Ryan.

Present.

Mr.

Costello is absent.

Mr.

Hirsch is also absent.

Mr.

Winkleman.

Here.

Great.

Hi.

Presently have a quorum.

Wonderful.

Welcome everybody.

We're joined again by our advisors for Siegel.

They have both monthly reports, but because we didn't have a meeting last month due to special circumstances, we also have a little bit of year-end summary to go through.

And then we pending the will of the commissioners, we will have a potential vote in item three with respect to a small rebalancing decision.

So we're joined by order Joe and Peter Sullivan, and we'll turn it over then for item one investment performance analysis takeaway.

Thank you very much.

So within the investment performance analysis agenda item, Rose and I anticipate going over the quarterly performance as of the uh end of uh last year.

Um focus on the quarter and the year, a little bit of um uh analysis of performance on a peer group basis.

Um after that we will go over the performance of uh the ERS uh as of the end of February and end of um a discussion of uh the trust performance.

Uh we do have a uh very small kind of perform uh uh recommendation uh to make uh for the IRS that shouldn't take very long.

Uh and I'll start with uh the City of Providence Board of Investment Commissioners.

Um if you could flip to in lower right hand corner there's page 23.

Uh again, this is our attempt to uh synthesize a couple hundred pages of um analyses uh and then easy to hand up and out.

Um so um on page 23 you should see total plan, all public DV plans in the upper left-hand corner.

Um so what we want to do is focus on the total plan return as of the end of the fourth quarter.

Uh we had a 1.3% return for that quarter, uh and we had a 13.6% return uh for the one year.

Um if you look at the 1231 numbers, we're looking at the performance of the total plan, net of all fees, and comparing it uh to other defined benefit plans in the public space.

Um in the parentheses you'll actually see your peer group ranking.

So the lower the number in the peer group uh parentheses, the higher or better we are done relative to peers.

Um and so um, you know, taking a snapshot, focusing on kind of the uh year-end uh one year.

Um I'd highlight that we did have some um strong returns from an absolute standpoint.

Um year is 13.6 percent, uh which is ranked uh uh just around median uh for the year.

Uh 13.6% is a strong absolute return.

I just recall that we're looking for uh the pension based on this asset allocation uh to offer somewhere between uh a 6.8 and uh 7.5% return uh in any given year.

Uh so we have very strong results um on a one, three, and five, seven, and ten years, which uh really exceed um our expectations for the portfolio performance and just very absolute returns uh in absolute terms.

Um for this last year, um again we have like a median life return uh relative to the peer group, uh but I would highlight on a three and a five-year basis, uh you're outperforming about 90% of public defined benefit plans measured uh by return.

Uh that's uh a very good outcome.

Uh on a seven and ten year basis, um you're uh around me, uh, which is not a bad outcome.

It is highly influenced by the performance of the portfolio on the next page on uh where we look at calendar year numbers, uh 2020.

Uh it was a very difficult year historically for the portfolio.

I don't know, but there was a lot going on in 2020, I think recall.

Yes.

Um, so uh just keep in mind where your rankings kind of move from extraordinarily high to median, it's largely influenced by that one year 2020.

And if we look at the portfolio's performance versus its benchmark, you know, um a little bit of underperformance on a one-year basis, but you know, we're we're benefiting from some strong consistent outperformance versus your policy benchmark on in four at the last five years.

And you can look at the bottom of that page, you can see the population.

So there's over a thousand um public plans here.

Obviously, it fluctuates over the years.

So you're looking at other public pension plans to compare yourself to.

So this is a great universe.

You're not gonna always be, you know, top death style every year, it's gonna fluctuate, but you've done extremely well in this portfolio.

Uh there are lots of ways to measure the performance of the plan, there's multiple kinds.

And again, I'm highlighting the most important ones, absolute versus your expectations of we have a good performance track record here.

And again, inline are much better than peers.

Um, if we go one bar page, I'll just draw your attention uh to the left scatter file analysis.

It's a three years annualized return versus annualized standard deviation.

So, in simple terms, we've highlighted that your returns are very good relative to this peer group of public plans.

There's over a thousand, it's indicated by each one of those little dots.

Um, to the extent we're above the horizontal line in that cross here, it means we're outperforming the median public plan.

Um, what I want you to highlight here is vertically.

Uh, you'll note what we're measuring is the risk in your portfolio, right?

How much um uh for every uh bit of return, how much risk are we facing?

Are we incurring?

It's a cost benefit type analysis.

And what I want to highlight here is you're outperforming peers by having risk that's very much in line with a public DB plan.

Uh it's a little bit higher than the typical median plan uh median fund, uh, but you're you're being well served with an additional better performance.

And it also tells us that we're right over our skies and the amount of risk that we're taking in the portfolio.

Really good to look at at least once a year, which is why I'm spending time on that.

Okay.

Um I'm gonna I'm gonna skip, if you wouldn't mind, uh two pages in the lower right-hand corner, please, you'll see page 46.

Okay.

Um, and what I'm endeavoring to do, kind of like in this annual quarterly kind of recap and update on performances, I want to highlight the performance of your active managers uh in the pension plan.

And then broadly, uh Rose and I were talking about it this morning again.

Uh, what what is um remarkable about your performance is the consistency of your active managers' returns since inception, they've been positive.

We've had consistently good performance relative to benchmarks.

There's been a good contribution where you take active risk.

And um I'm just gonna spend a couple more minutes just highlighting what that means relative to peers.

Um, so on page 46, we're looking at Rubico, which is Boston Partners Mid Cap Value.

Um, you know, interestingly enough, we have outperformance uh for this manager across one, three, five, seven, and ten years.

Great, nice to have.

We don't expect that to always be the case, but you'll notice in the parentheses that we have relatively small numbers between 15 and 20.

Uh, and what that is measuring is that um if you uh it means that this manager's outperformed 80% of big cap value peers in the active space, which means your our decision to select this manager and retain it has proven to be a very good one over this past year and over the long term.

Uh the next page we're looking at our other um active manager, which is Google VIPA, Boston Partners, small cap value.

And I want to highlight that Boston Partners in Small Cap Value did underperform its benchmark, the Russell 2000 value index over this last year by about four or five percent, mostly coming in the third and part of the fourth quarter.

Notice that I'm highlighting underperformance, yet the performance of Boston Partners relative to other small cap value managers, of which there's 145 that we're tracking, is well above median on a one-year basis, uh, around or better than median on a three, five, seven, and ten year basis.

Uh, what is that telling us?

It's telling us that active management was challenged over this period.

Matter of fact, 80% of active managers underperformed.

And with Webico, you have a manager that's done better than average and is quite quite honest, it's offered a very competitive performance profile.

Um I'm gonna move along a little bit.

Um, if you advance one page, we look at Brandis, uh, but I I want to stop maybe on page 67, which is Luma Sales, right?

Um, active fixed income manager, uh, and we're comparing it against a very robust peer group of other managers and funds that you could have made investments in over this last 10 years.

Uh, and again, I want to give credit to the active management uh in fixed income as well as um active.

Uh if you look at the performance lumus sales in this particular strategy, is outperform 90% of active funds, and in doing so, it's also uh outperformed.

It's peers and the benchmark.

So again, I don't expect to go through this uh every week, uh, maybe four times a year, three times a year, two times a year in discussing the pluses and minuses of retaining an individual manager, but as a whole, um this focus on Q4 in 2025 is a is a good review.

And if you look on page 67, and this is on the other pages, and you look in the middle there where it shows you the risk summary statistics, and you look at the up capture and down capture.

Um this is exactly what you want from a manager is when the market is up, they capture more of the up, right?

So 103% of the up.

Um that's what that 103 means.

So when the market says up 10%, they're up more than the market, right?

They're up like 13%.

And then the down captures exactly what you want.

So when the market's negative, they're only capturing 86% of the down, right?

They're not capturing as much of the down.

So if the market was down 10%, they might only be down 8.6%, right?

So that's exactly what you want to see.

You want a manager that captures, you don't always get it, but you want a manager that captures more of the up and less of the down.

You have a good manager here doing that.

The risk reward is quite good for LUMIS.

Your portfolio, uh, particularly when markets are negative equity markets are down, Luna sales is that manager, uh, that part of your portfolio in the asset class that will step up and protect capital in a down or negative market.

All right.

Um, I think I will conclude my statements on Q4 in 2025.

And I'd welcome any questions.

See none of the period.

All right.

Um, so um, I'm sorry to make everybody read here.

Um, I don't have classes on with me.

Um so it says monthly lash.

Monthly flash uh city of provenance employee retired next system period and in February 20, 2026.

Rose, you want to um sure.

I'm just gonna do a quick market update, and then Peter's gonna go through your results for February.

Um, but you know, February we had, if you just remember back, we had um you know, jobs report.

Um that was a little, you know, not as strong.

Um, so we had some inflation expectations that were were um you know, were higher than folks had thought.

We had the um the tariffs, tariff issue that was in the news.

So it was really the first time in February we had seen the SP negative.

Um first time in nine months with um a negative SP 500 for the US market.

So you could see that there on the bottom.

Um, the international markets were still strong because of the depreciation of the dollar, the international markets have stayed strong as the dollar um continues to decline.

Um and you can see there was like a little bit of a reversal.

We had seen growth stocks really be outperforming value stocks.

We saw in this market um in February value stocks outperform the growth stocks.

Um we also saw small caps and mid-cap stocks outperform um large cap stocks.

So it's really set the landscape for you what you see in your portfolio.

So Peter, turn it over to you if you go to page um three of the report to get into how your portfolio is doing through February.

So uh we did not meet last quarter, so uh sorry, last month um to the weather.

Um generally we're kind of focused on the one month return um uh and the year-to-date return uh for the total plan.

And again, we endeavored to present this performance net of all fees.

Uh so uh for the month of February, we had a 1.3% return versus the uh policy index of 1.3 percent.

Uh we had um you know generally a flat performance uh in line uh uh with our uh policy benchmark.

Uh we are shown some underperformance uh on a year-to-date basis uh and on a one-year basis.

Um I would tell you uh a year-to-date and one year basis.

The honored performance is really uh driven um not by our asset allocation, how we manage uh our risk or position versus the targets um over this last year to date and one year.

Uh it has uh largely been associated with uh really two primary uh sources of of uh performance.

One is we've held a fair amount of cash throughout the year, right?

Um sometimes in excess of eight to ten percent.

Um we have reduced that throughout the trailing one year.

Uh if you have no uh cash in the portfolio um is uh really in good position of uh of around less than one percent, so if it has been higher, uh that that cash drag is very strong market.

Uh, where uh the portfolio policy benchmark has been up between 14 and 50 percent uh was a big in uh big impact.

Um the other source of underperformance, and again we've we we have been talking about uh this um you know over the second half of last year.

We touched upon it in um in June as well.

Uh is the underperformance of your hedge fund portfolio, um, which uh if you look on uh we reach five um uh has underperformed the composite index uh by about 10 percent.

Um thing to note about the one-month uh and year to date is the hedge fund portfolio has outperformed on a one-month basis, largely driven by a very strong return from uh a single manager renaissance institutional equities uh which outperformed with a very strong 5.1% return, which outperformed um uh peers uh in the hedge fund space um and in the launch short uh equity space.

Uh so if we go back to kind of the total fund line, um I would tell you that uh uh our domestic equity portfolio um you know was was uh very uh well positioned uh for um for the month before the degree uh we had a uh good performance versus the Russell 3000.

You can see that we actually outperformed the Russell 3,000, which is the broadest um uh market index that we use for benchmarking uh the US equity portfolio, so it's a strong performance there.

Uh we actually saw some um um good performance uh despite some challenges with uh revivo and the mid cap and small cap value uh part of the portfolio.

On the next page, uh your international equity portfolio um for the month um did very well, uh driven largely by the performance of grand partners, uh, but also um Fidelity Global X US Um that's that right mix um of active and passive uh with Brandus um offering um uh that strong active return when we when we need it as a result of our international equity portfolio uh outperformed uh its benchmarking treatment at the top um on page five um I um I'm sorry that's it's page four.

On page five, um I'm sorry, it's it's page four.

Page four, one back.

Okay.

My apologies.

Um of the things that um has been a general contributor to the performance of the fund has been your domestic fixed income portfolio, uh, which is benchmarked against the intermediate US government credit.

And I want to highlight a very strong performance from Luma's sales, right?

Um for for the month reporter outperforming um the the US gov credit.

That was actually a very difficult bogey uh to meet in this period where we've had a fair amount of uh decline and tightening spreads um impact in the credit space, so that's a very uh good outcome.

So I risk going wrong.

Um again, uh no real um no concerns about the portfolio uh with the managers uh in it right now.

Um we're always going to be evaluating whether we have the right mix of managers, are we combining them in the right way to serve the interests of the plan uh and in the city?

And that can that continues.

Um there are um no real recommendations that I would make today.

Um, however, when we do discuss rebalancing, um uh which we do uh every uh every month, uh we do have a small uh recommendation to make um to move monies between funds uh within your portfolio.

So any questions on performance.

And rebalancing is on the agenda thoroughly, so we were gonna wait for that unless you want to address it now.

Say hold on to this packet.

Yes, and hold on to page five of this packet, and we will come back to it when we get to item three.

Are there other questions on the performance or the report?

Hearing none, um, I'll take a motion to accept the report uh in item one that's basically that.

So moved.

Those in favor say aye.

Aye.

Any opposed, the ayes have it.

We move on to item two, which are our trust funds.

So the trust reports a uh city of providence trust fund, it's I think maybe the biggest packet that you have.

And I'm gonna be pretty brief with the trust.

Um, if you go to page three um of the trust report, you put this summary in you know, six months ago, several nine months ago.

Um, that just shows you all the trusts on one page, which is on page three.

Very helpful, thank you.

Um, and and so that just you know, you can see how well each trust is done.

Um and you can see the asset value at the end of February for each each trust.

Um, so again, page um three of the three of the book.

Um, the total fund, which includes all the trusts um circled up into one composite, um, was for the month of February 1.9% for the two-month period 4.6 percent, and for the trailing one-year period, 19%.

So just really strong returns um from the trusts.

And if you just go down the line there, you can see 14 million um in that board of investment commissioners bucket, the Charles Smith is five million, city councils 1.7, Arks and Rec.

Um, Dexter is uh 4.3, um Ebenezer, uh Knight, Dexter Trust is 5.7.

Um Edward Eli is 1.7 in Iker.

Hickley Bradford Trust is 3.1.

And again, all of them for the quarter-to-date period, the two-month period are up over 4%, and then you can look at the trailing returns that I'm not gonna go into more detail than that, um, just for the sake of time, unless you want me to go through um all of the pages with the market values contributions, distribution, but all that information is in here um for you to have uh for the plan, but again, they're doing well, the managers are doing well.

Um you know, you have a lot of indexing in here, um, which is just matching the benchmarks.

So and I know that Peter has done a lot of work um with your staff to get the trusts where they need to be.

Are there any questions procedural on the process?

See now, I'll take a motion to approve item to second by the second.

All those in favor say aye.

Aye.

So we'll move on to item three, which is discussion and possible relative to the rebalancing portfolio, and I'll refer you back to that previous package that I asked you to save the page of uh again.

This is City of Conference monthly last report, and we're on change five and turn it back to thank you very much.

Um when we rebalance, we have a rebalancing discussion.

You know, our goal with this discussion every month is to uh uh evaluate the portfolio's positioning relative to its asset allocation targets, it's long-term targets, right?

Um is an exercise in managing risk and return.

So to the extent we stay close to our targets, we will have a return in line with our long-term objectives.

Uh, when we depart from those those targets, um we uh generate some excess risk, which can be good if it leads to outperformance.

Uh it can be challenging if it leads to underperformance.

Um, and so each month we want to make sure that we're positioned uh the best way we can based on market environment, based on the needs of the city and the portfolio.

Um, and so um what I would tell you is that the portfolio is largely in line with its targets.

Um so um I would not suggest that we uh address a small overweight to equity versus fixed income uh at this meeting.

Um, I would tell you our exposure to US equity and international, um, our targets for fixed income are very much in line and consistent with where we think you should be positioned today uh and uh for the the immediate short.

Uh generally uh in if there is a need for cash, um we we would largely recommend uh that that come from uh equity, um uh, but fixed income potentially um uh depending on where uh the market goes in the this next year.

Uh so that leaves us with uh uh that risk uh management uh recommendation, right?

So um and on page five, um in the policy percentage column, uh you'll see four and four for black rock and renaissance.

Okay.

Um you'll notice that within the hedge fund portfolio, uh the majority of assets are with Renaissance and at 4.4 out of the 7.4.

Um, and uh um Renaissance is overweight its target by about 0.4 percent.

So um why are we doing this um right now?

And the recommendation is again a very simple regular performance one, which is to uh move 2.5 million out of Renaissance through a partial redemption and move it into BlackRock, Quello Strategic Partners.

All right, the reason for this is risk management.

Uh Renaissance is a long short equity manager, right?

Which is more exposed to the equity markets and it's generally higher octane or higher risk.

BlackRock invests in long short equity, but a bunch of other fixed income and hedge fund like exposures, it's more diversified.

Um, and as a result, it is um less risky um than long short equity and renaissance in particular.

So moving 2.5 million from Renaissance and putting it in BlackRock maintains our exposure to this asset class hedge funds, which are very important in a volatile market, uh, but it balances our exposure and our risk uh between our the high octane engine, which is Renaissance in the hedge fund portfolio and our kind of slow and steady core uh hedge fund manager in BlackRock.

I expect to do this you know for every manager in every part of your portfolio um every month.

Um but uh today uh hedge funds are on on the dock.

Uh and it makes sense uh given uh the volatility that Renaissance um just exhibits generally um so we're taking it from the 4.4 down to 4%.

So the 2.5 million represents the point four that it's over, and so the recommendation is just to move the 2.5 from Renaissance to black.

Do it increase the risk.

Yes, are there any questions from the commissioners on the recommendation?

Seeing none, I'll take a uh vote to approve the recommendation of CEO to rebalance within our hedge funds and authorize the movement of two and a half million dollars out of renaissance and into Qualis uh with the the execution left to left to see what to do uh time of manner is basically by the chairwoman to second second by Sarah.

Thank you.

All those in favor say aye.

Aye.

Any opposed?

Any abstentions motion to adjourn?

Cho moved.

Moved by second by chair moving aye.

All those in favor of adjournment say aye.

Aye.

Aye.

Any opposed?

Thank you all very much.

Thank you.

Thank you very much.

Very good work.

Thank you.