Columbus, Georgia

Georgia's First Consolidated Government

Post Office Box 1340
Columbus, Georgia, 31902-1340
(706) 653-4013
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Council Members

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

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