BOARD OF RETIREMENT
FRESNO COUNTY EMPLOYEES’ RETIREMENT ASSOCIATION
“Our mission is to administer the retirement benefits for the members and beneficiaries in a prudent,
accurate, timely and cost-effective manner, while administering fund assets in a manner that achieves
investment and funding objectives within prudent levels of risk”
August 6, 2014
REGULAR MEETING AGENDA MINUTES
Trustees Present:
Marion Austin
Dr. Rod Coburn, III
Steven J. Jolly
Laura P. Basua
Vicki Crow
Judith Case McNairy
Robert Dowell
Trustees Absent:
Eulalio Gomez
Others Present:
Jeffrey MacLean, Wurts & Associates
Jack McIntyre, CFA, Portfolio Manager - Brandywine Global Investment Management
John Ford, CFA, Director of Marketing - Brandywine Global Investment Management
Scott Thiel, CIO of Fundamental Fixed Income - BlackRock
Jeremy Watt, Client Relationship Manager - BlackRock
Dale Hydeman, Board of Supervisor Assistant - District 4
Dean Stuckenschmidt, Deputy County Counsel
Becky Van Wyk, Interim Retirement Administrator
Kelly Prinz, Retirement Benefits Manager
Conor Hinds, Supervising Accountant
Elizabeth Avalos, Administrative Services Assistant
1.
Call to Order
Chair Coburn called the meeting to order at 8:35 AM.
2.
Pledge of Allegiance
Recited.
3.
Public Presentations
Trustee Case McNairy introduced and welcomed her new Assistant, Dale Hydeman.
Consent Agenda/Opportunity for Public Comment
A motion was made by Trustee Jolly, seconded by Trustee Basua, to accept Consent Items 417 as presented. VOTE: Unanimous (Absent – Gomez)
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*4.
July 16, 2014 Retirement Board Regular Meeting Minutes
RECEIVED AND FILED; APPROVED
*5.
Retirements
RECEIVED AND FILED; APPROVED
*6.
Name
Department
Jennifer A. Brennan
Jack David Cannon
Leo Ford
Helen Guzman
Michael C. Horsley
Timothy Jon Jacoby
Nancy P. Kelly
Trygve Larson
Emily M. Oliver
Charlotte F. Thompson
Virginia R. Tingle
Community Health
Dept of Social Services
Dept of Social Services, Deferred
Probation
Dept of Social Services
Library, Deferred
Public Defender, Deferred
ITSD, Deferred
Community Health, Deferred
Probation
Community Health
Yrs of Svs
20.32
41.71
9.39
20.03
11.99
18.88
13.57
5.38
5.41
24.51
25.76
Disability Retirements
RECEIVED AND FILED; APPROVED
*7.
Name
Department
Richard Cole
Steven Fox
Conni L. Washington
Internal Services
Sheriff
Behavioral Health
Yrs of Svs
8.24
5.29
1.74
Educational Reading Materials
RECEIVED AND FILED


*8.
July 15, 2014 Reuters article – Old-style U.S. public pensions weather cost-cutting storm
June 2014 Benefits Magazine – Red Flags for Trustees: Detecting Weak Points in Your
Fiduciary Armor
Public Records Requests and/or Retirement Related Correspondence from Mary
Johanna Aguilar Terminez, Thomson Reuters
RECEIVED AND FILED
*9.
Budget Status for the quarter ended June 30, 2014
RECEIVED AND FILED
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*10.
Berman DeValerio Second Quarter 2014 Reports
RECEIVED AND FILED
*11.
Update on SACRS Ad Hoc Committee’s Progress
RECEIVED AND FILED
*12.
Travel Report from Chair Coburn on his attendance at the International Investing and
Markets course at Wharton Campus on July 28-30, 2014 in San Francisco, CA
RECEIVED AND FILED
*13.
FCERA Cash Flow position as of April 2014
RECEIVED AND FILED
*14.
Most recent investment returns, performance summaries and general investment
information from investment managers
RECEIVED AND FILED
*15
PIMCO Firm and Total Return Update
RECEIVED AND FILED
*16.
Wellington Management Company Structure Change and Succession Planning Update
RECEIVED AND FILED
*17.
Invesco Core Real Estate USA – Personnel Change Update
RECEIVED AND FILED
18.
Discussion and appropriate action on Colony Distressed Credit and Special Situations
Fund III
Jeffrey MacLean, Wurts & Associates (Wurts), opened discussions by noting that Colony
Capital is in the final stages of raising their third distressed real estate debt fund since 2008.
Colony Distressed Credit and Special Situations Fund III (CDCF III) will likely have its final
close at the end of September with a target raise of $1 billion that will likely reach its hard cap
of $1.2 billion. They currently have firm commitments of $700 million with another $200 million
soft circled. Wurts & Associates is recommending FCERA make a $20 million commitment,
subject to availability (Colony anticipates being oversubscribed to this Fund).
Detailed discussions ensued regarding the firms background and investment strategy.
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It was noted that Wurts & Associates supports the idea of inviting Colony to the September 3,
2014 Regular meeting to review the existing CDCF I investment as well as the proposed
investment in CDCF III. In addition, and given the time constraints of the final close, Wurts
recommended a tentative approval so [legal] council would have sufficient time to review the
subscription documents.
A motion was made by Trustee Jolly, seconded by Trustee Austin, to tentatively
approve the CDCF III mandate pending further discussion at the September, 3, 2014
Regular meeting and to authorize Foster Pepper to begin the review of the subscription
documents. VOTE: Unanimous (Absent – Gomez)
RECEIVED AND FILED; APPROVED
19.
Discussion and appropriate action on selection of Global Bond Mandate
The Board heard presentations from and engaged in discussion with Jeffrey MacLean, Wurts
& Associates, and representatives from Brandywine Global Investment Management and
BlackRock on the Global Bond mandate. Each reviewed their organizational structures,
investment strategies and processes, and fee structures.
A motion was made by Trustee Jolly, seconded by Trustee Austin, to begin contract
negotiations with Brandywine. VOTE: Unanimous (Absent – Gomez)
RECEIVED AND FILED; APPROVED
20.
Discussion and appropriate action on Investment Manger Agreements
Jeffrey MacLean, Wurts & Associates (Wurts), opened discussions by reminding the Board
that, as a result of the recently approved asset allocation, FCERA has contemplated
restructuring several existing fixed income strategies and in other cases sought new managers
to fill certain mandates. Mr. MacLean gave a brief update on the status of these agreements
and provided recommendations for next steps, where applicable.
The Board engaged in detailed discussions regarding the implementation considerations
noting that, as part of the Rebalance Implementation Plan that was discussed in April, the
current core plus fixed income strategies will serve as the funding source for the new fixed
income allocations.
In addition, it was noted that in cases where the manager is transitioning the portfolio to a new
mandate, they will generally do so opportunistically as the markets allow, and over a period no
longer than one month. Wurts will work with the underlying managers and FCERA staff to
ensure that all transaction costs are minimized while providing a consistent full exposure to the
fixed income markets.
Eaton Vance Management
A motion was made by Trustee Crow, seconded by Trustee Jolly, to approve the
agreement with Eaton Vance Management as presented and authorize the Chair to
execute appropriate documents. VOTE: Unanimous (Absent –Gomez)
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Loomis Sayles & Company
A motion was made by Trustee Jolly, seconded by Trustee Austin, to approve the
agreement with Loomis Sayles & Company as presented and authorize the Chair to
execute appropriate documents. VOTE: Unanimous (Absent –Gomez)
Western Asset Management Company
A motion was made by Trustee Austin, seconded by Trustee Basua, to approve the
agreement with Western Asset Management Company as presented and authorize the
Chair to execute appropriate documents. VOTE: Unanimous (Absent –Gomez)
Mr. MacLean recommended that the Board authorize Wurts to work with Administration to
prudently implement the rebalance transactions accordingly.
A motion was made by Trustee Jolly, seconded by Trustee Case McNairy, to approve
the recommendation to rebalance as recommended. VOTE: Unanimous (Absent –
Gomez)
RECEIVED AND FILED; APPROVED
21.
Closed Session:
A. Conference with Legal Counsel – Significant Exposure to Litigation – pursuant to G.C.
§54956.9(d)(2):
B. Disability Retirement Applications – Personnel Exception – pursuant to G.C. §54957:
1. Linda O’Dell
22.
Report from Closed Session
21.A. Nothing to report.
21.B.1. O’Dell – Decision – Grant a non-service connected disability retirement to the Applicant
without requiring a medical records review by an Independent Medical Examiner. M –
Crow. S – Basua. VOTE: Unanimous (Absent – Gomez)
23.
Report from FCERA Administration
Becky Van Wyk, Interim Retirement Administrator, reported on the following:
1. The Audit Committee will meet August 11, 2014 at 2:00 PM.
2. The Personnel Committee will meet August 12, 2014 at 2:00 PM.
3. Personnel changes at Waddell and Reed.
4. An update on the request to the Board of Supervisors to add the Account Clerk and
Retirement Coordinator positions.
5. An update on the General Member Special Election. Nominations will close at the end of the
day.
6. A reminder that the Auditors will be in the office next week.
7. Ms. Van Wyk’s vacation schedule.
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24.
Report from County Counsel
County Counsel had nothing to report.
25.
Board/Committee Member Announcements or Reports
Chair Coburn reported on the following:
1. His recent attendance at the International & Emerging Markets Course at the Wharton
School in San Francisco, CA.
2. A recent meeting with representatives of PIMCO. Becky Van Wyk, Interim Retirement
Administrator was present.
There being no further business, the meeting adjourned at 12:00 PM.
Becky Van Wyk
Interim Retirement Administrator/Secretary to the Board
08/06/14 Regular Meeting Minutes