AIFM Board Special Meeting: Investment Reports Review – September 17, 2020
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Administration, Investment & Fiscal Management Board (AIFM) Special Meeting – September 17, 2020
The Administration, Investment & Fiscal Management Board (AIFM) held a special teleconference meeting on September 17, 2020, at 1:30 p.m. due to the COVID-19 emergency. Chair started late, apologizing for misreading a cancellation notice. The board approved the consent calendar, received two quarterly investment reports from Segal Marco Advisors and SCERS, and unanimously accepted both reports. No public comments were made.
Consent Calendar
- Item 1: Approval of AIFM Meeting Minutes for June 25, 2020 – approved unanimously.
- Item 2: SCERS Monthly Investment Report for June 30, 2020 – accepted unanimously.
Public Comments & Testimony
- No callers for public comment on the consent calendar, discussion items, or matters not on the agenda.
Discussion Items
- Item 3: Segal Marco Advisors Quarterly Investment Performance Report (June 30, 2020) – Presented by Craig Chaikin (Vice President, Segal Marco Advisors). The S&P 500 returned +20.5% in Q2 2020, year-to-date down ~3% through June but positive ~5% by mid-September. A strong divergence between growth (up 9.8% YTD) and value (down 16.3% YTD) was noted, driven by tech giants (FANGs). Fixed income spreads narrowed after government action. The portfolio recovered to $265.6 million, up 14% for the quarter, fiscal year-to-date +3.25% (behind the 6.5% actuarial assumption but positive after a -9.4% low in March). Board member Jason Bader asked about sustainability of the 6.5% bogey given economic uncertainty; Chaikin responded that it is achievable but more challenging due to pandemic, political factors, and potential lack of stimulus.
- Item 4: SCERS Quarterly Investment Report (June 30, 2020) – Presented by Stacy Hussey (Chief Investment Officer). Noted that ending the fiscal year at +3.25% was a strong outcome (compared to CalPERS 4.7% and CalSTRS 3.9% unaudited). Fixed income is increasingly challenging due to low rates; $8 million in calls (over 10% of portfolio) were reinvested at lower rates. Hussey reported taking profits from overweight FANG positions to fund the operating account, now sufficient through December. Discussed upcoming Bartel report in late October to evaluate actuarial assumption and asset allocation changes, potentially lowering the 6.5% bogey. The portfolio benefited from buying in March and selling winners in Q2. Board member Bader asked about incremental impact reports; Hussey confirmed Bartel can model changes (e.g., 25–50 bps).
Key Outcomes
- Motion to approve Item 3 (Segal Marco Advisors report) – Moved by Jason Bader, seconded, passed unanimously (all three board members present: Jason Bader, Don Holm, Manny Leon).
- Motion to approve Item 4 (SCERS quarterly report) – Moved, seconded, passed unanimously.
- No further business; meeting adjourned. Next meeting expected near end of 2020.
Meeting Transcript
You may start when you're ready. Okay. Welcome everyone. My apologies. I I misread my emails, and I thought that there was a cancellation of this meeting, and so that is my fault. Bear with me as I try and open up the uh my agenda through one of my devices. Give me a second. Um, but I think I think off the top of my head, we need to uh uh call the meeting to order if I'm correct, and and uh uh do a quorum count, if I'm correct. Yes. Okay, go ahead. Will you please proceed with that as I open up this agenda in one of my devices, please? Okay, Jason Bader. Here uh John Povil is absent. Uh Don Holm. Here. Manny Leon. Here. Okay. All right. Okay, I think um over you again. I apologize. Um, I am opening this up. I don't see. Oh, geez. Um, you know what? I think we're Valerie. I'm having that same uh Adobe issue that we had with the update and the one that you use versus the one I use type of thing. Um you remember how we were talking about the signing and had a sign in a different way. Um, but I think at the top of my head, the consent calendar should be the next item if I'm correct. Yes, sir. All right. Uh I think I'll go online to see if I can pull it up online while we're toy the consent calendar, please. I'll make a motion to approve this consent calendar. Okay. Second? Yes. All right. Uh for the vote, Jason here. Yeah, yep. Yes. Um, Don. Yes. And Manny. Yes. Okay. The next item is Segal Mark Marco Advisors Quarterly Investment Performance Report for June 30th, 2020. Perfect. Okay. Uh, let's go on to that discussion item while I'm opening it up. It's crazy.
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