MINUTES OF THE
BOARD OF TRUSTEES MEETING OF THE
COLUMBUS GEORGIA EMPLOYEES' PENSION PLAN
June 6, 2007
A meeting of the Board of Trustees for the Columbus Georgia Employees? Pension
Plan was held June 6, 2007 at 2:00 P.M. in the Mayor?s Conference Room.
PRESIDING: Mayor Jim Wetherington, Chairman
PRESENT: David Arrington, Deputy City Manager; Pamela J. Hodge, Finance
Director, Omagene Holland, Trustee; Mary Strozier-Weaver, Trustee; Harvey
Milner, Trustee; Richard Swift and Henry Swift, (Smith Barney); Tom Barron,
Human Resources Director
ABSENT: Isaiah Hugley, City Manager; Morton Harris, Trustee; Col. R.
George Plummer, Trustee; Alan Rothschild, Trustee; Joe Smith, Trustee; Chief
Robert Futrell, Trustee;
GUESTS: Savonne Monell, Columbus Water Works
Mayor Jim Wetherington called the meeting to order. Ms. Julia Rasch, Recording
Secretary, recorded the attendance.
MINUTES OF THE PREVIOUS MEETING:
The minutes from the May 2, 2007 meeting were presented for approval. A motion
was made and seconded to accept the minutes as submitted. The vote was
unanimous.
INVESTMENT UPDATE: Interim Report (Mr. Richard Swift)
The first chart provided, the S&P 500, is to show what has happened in the
marketplace for the past three months, March 1, 2007 and through the end of May
2007. On 03/01/07 the S&P 500 was at 1403 and ending on 06/01/07 it was up to
1535, depicting the stock market had a nice run these last three months.
The second chart is what the bond market has done, in terms of the yield of the
Ten Year Treasury Bond. Over the last three months the bond market has risen
from 4.55% to 4.95%, indicating a weaker bond market.
Next is the performance of the managers. The fixed income managers, Synovus,
Tattersall and Madison went from a combined value of $81,776,000 to
$81,410,000, down slightly, 45 basis points for the period. Obviously, when
there is a rise in interest rates, it?s hard for the fixed managers to do whole
lot.
The Equity managers had a good period, starting with growth, Santa Barbara,
Rittenhouse and Trusco, they went from a combined $35,108,000 to $37,833,000,
up 7.76% for the period versus their benchmark, the Russell Growth being up
8.96%, so behind the benchmark but still absolutely a good period for the
growth managers.
In the value managers, Deutsche was replaced but their performance is still
incorporated through the end of May 2007 and Spears, Grisanti and Brown, the
combined values went from $35,219,000 to $38,708,000, up 9.91% for the period,
beating the Russell Value which was up 8.92%. The Russell 1000 Value has been
a tough benchmark to beat because it?s been running and it?s good to see some
solid out performance of that benchmark.
The Core managers, Knott and Madison; combined value of $31,019,000 to
$33,347,000, up 7.50% versus up slightly more than 9% for the S&P 500, so under
the benchmark there again, but still a good performance for the managers.
Last is the International manager, Lazard, who started the period at
$18,253,000 and went to $19,932,000, up 9.2% for the period versus the ACWI
which is the All Country World Index up 7.5%, so a good relative out
performance by the international manager. All in all, just a good period the
equities.
Although it was down 45 basis points, the combined equity was up 8.55% bringing
the total city account up 4.89%, which finished at $211,230,000 ?.up more than
$10 million dollars.
Again, there are going to be some managers that beat the benchmark and some
managers who are trailing, but all in all a good report for the past 90 days.
Mr. Henry Swift commented that it?s always interesting to him that if we go
back to 1987 when we first reconstructed the pension plan, we started out with
$38,000,000 and today we?re up to $211,000,000 today.
The Mayor commented that this was an excellent report.
FOR MORE DETAIL, PLEASE REFER TO THE REPORT PRESENTED BY MR. SWIFT.
A copy of the evaluation reports and the other information presented to the
board is retained in the Finance Director?s Office by the Board Secretary and
is available for review upon request.
PRESENTATION (S): Knott Capital (Pete Scofield)
Mr. Richard Swift introduced Mr. Pete Scofield to the board. He stated that
they?ve been managing money for us for just shy of 2 years. It?s been a tough
time while they?ve been managing money for the fund and Mr. Scofield will
address some of the issues in his report.
The following is an outline of his report:
Investment Process
Through the combination of top-down and bottom-up analysis, risk is assessed,
monitored and controlled at each step in their process
? Cycle Comparisons (chart)
? Mortgage Equity Withdrawal (in billions) (chart)
? GCP Growth: With and Without Mortgage Equity Withdrawal (chart)
? Real GDP Annual % Change (chart)
Key Economic Trends
? GDP slowing precipitously (Q1 preliminary = 0.6%)
? Personal Spending (+0.3%) now rising less than Personal Income (+0.7%) ?
Savings finally being rebuilt
? Growth Rate Slowing After Bull Market in Earnings
Beneficiaries of Increasing Volatility (chart)
Knott Capital Sector Weight Comparison (chart)
Q1 2007 Earnings Results by Market Capitalization
Knott Capital Holdings ? Q1 2007 Earnings Report
Mr. Scofield was thanked for his presentation and was dismissed from the
meeting.
OLD BUSINESS:
Meeting Calendar and Manager Schedule ? There was a change to the original
schedule that was submitted at the last meeting but without a voting quorum,
this item could not be voted on by the board members and was, therefore,
deferred to the next meeting on August1, 2007.
b. New Value Managers replacing Deutsche ? It was approved by the board to
accept the recommendation of the sub-committee that Deutsche be replaced by
Cambiar Investors and TCW Relative Value. The transfer of assets is in
transition.
NEW BUSINESS:
The recommendation was made that the Mayor appoint a new sub-committee to study
the asset allocation plan and bring back to the board their recommendation for
any changes/adjustments they deemed to be in the best interest of the plan.
With no further business for discussion, the meeting was adjourned.
The next regular meeting is scheduled for August 1, 2007 at 2:00 p.m. in the
Mayor?s Conference Room. The guest speaker(s) will be from Trusco.
______Julia A. Rasch ____
Julia A. Rasch
Recording Secretary
Attachments
No attachments for this document.