Columbus, Georgia

Georgia's First Consolidated Government

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Columbus, Georgia, 31902-1340
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Council Members

MINUTES OF THE

BOARD OF TRUSTEES MEETING OF THE

COLUMBUS GEORGIA EMPLOYEES' PENSION PLAN



September 12, 2007





A meeting of the Board of Trustees for the Columbus Georgia Employees? Pension

Plan was held September 12, 2007 at 2:00 P.M. in the Mayor?s Conference Room.





PRESIDING: Mr. Joe Smith, Co-Chairman



PRESENT: Isaiah Hugley, City Manager; Pamela Hodge, Finance Director

and Secretary/Treasurer; Morton Harris, Trustee; Omagene Holland, Trustee;

Mary Strozier-Weaver, Trustee; Col. R. George Plummer, Trustee; Harvey

Milner, Trustee



ABSENT: Mayor Jim Wetherington, and Alan Rothschild, Trustee



GUESTS: Denise Baxter, Investment Officer - Revenue Division; Tom

Barron, Human Resources Director; Richard Swift and Henry Swift (Smith

Barney);











Mr. Joe Smith, Co-Chairman called the meeting to order. Ms. Julia Rasch,

Recording Secretary, recorded the attendance.





MINUTES OF THE PREVIOUS MEETING:



The minutes from the August 1, 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)



First, let?s look at the stock market from June 1st to September 1, 2007. The

market has had a very choppy environment over the last rolling three months.

The market went down then peaked in mid July, dropped down in mid August and

then rallied back in September.



The yield on the Ten-Year Bond Market, started the period at 4.95%, peaked in

mid June and then since has been dropped to 4.54%, indicating a better bond

market. In reviewing the performance report you will see that the bonds have

done quite well and the equities have had a tough time.



The fixed managers, Synovus, Tattersal and Madison went from a combined $84,410

million to $87,037 million, up 3.11% vs. the LB Gov Credit (GVI) up 1.11%. Out

performance from the bond managers and that?s why there are bond managers, to

hold up when the market place is going through a tough period.



Growth Managers: Santa Barbara, Rittenhouse, and Trusco. Rittenhouse and

Trusco did quite well, down 57 basis points and down 15 basis points. Santa

Barbara had a tough time over the last three months, down 3.65%. The growth

space as a whole was down 1.52% vs. Russell Growth down 1.98%. This is a good

out performance from the growth managers.



Value Managers, this is a combination of Deutsche/TCW, Deutsche/Cambiar and

Spears. This group had a terrible time during this period. The combined value

was down 7.41% vs. the Russell Value, down 6.79%. Value, especially the

Russell Value, has been running pretty good, out performing all other asset

classes, and therefore has been the index to beat has finally dropped off and

had a pretty difficult period of time.



Core Managers, Knott out performed nicely, down 1.28%. Madison was basically

in line with the S&P, down 4.14%. The total core space was down 2.75% vs. the

S&P 500 down 4.04, a good out performance for the core managers as a whole.

Knott recently called to discuss their performance because they had been

dragging in their performance and needed better numbers.



Lazard, down 3.38% compared to the EAFE, down 3.85% again an out performance by

Lazard. Lazard has the opportunity to buy emerging, small international stock

and large international stock. They have had an exposure to small cap for a

long run but they feel like it now extended and done so well that they feel

like it?s over priced so they?re coming out of Small Cap completely.



The combined fixed was up 3.11%, the fixed index was up 1.11%, the combined

equity was down 3.88% vs. the S&P down 4.04% just for benchmarks.



The total city account was down 1.17% vs. 60/40 blends being down 1.98%. With

the market place as choppy as it has been, it?s good to see the managers out

performing the indexes because this is what they are hired to do.



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.





Mr. Swift stated that he had another topic to bring before the board and since

it was included in the booklet with the interim report he would continue at

this time. Last month this board approved the pension fund going into and

funding mid-cap, small-cap and also using the exchange trade fund for the index

as it relates to the large cap asset classes. That was voted and approved by

the board at the last meeting. At the last meeting, it was agreed that

specific recommendations and Step I Phase-In would be presented to the board

for approval to take action in this venture.

Referring to the second section in his report, Mr. Swift stated that what this

shows is from where the money will be taken, where it will be dispersed and how

the portfolio will look following the transfer of funds. Referring to the dark

gray shaded bars, those are the totals for the asset class, and what will

happen is 2 million dollars each will be pulled from fixed, growth and value

and 2 million dollars each will be added to international, mid-cap and

small-cap. Money will be also pulled from different managers to fund the

different indexes within the asset class. This will take place at the end of

the month.



Morton Harris asked that Mr. Swift go through the methodology using the growth

manager as an example to show how the money will be moved.



Looking at the growth space, we?re going to take $2 million from Santa Barbara,

Rittenhouse and Trusco each for a total of $6 million. $2 million is going to

go to a whole other asset classes, the other $4 million is going to fund the

Russell 1000 Growth.



There were a few minutes of discussion between Mr. Harris and Mr. Swift

regarding the methodology for funding these new asset classes and indexes.



For more detail, please refer to the handout presented by Mr. Joe Smith at the

board meeting.



Mr. Swift, addressing the board, stated that he?d like the board to think about

this change as we?ve carved out some money to give us some exposure in an asset

class that we didn?t have before and we?re only putting less than 1% in each

asset class for right.



Mr. Harris confirmed that he supports the recommendation of the committee and

he made the motion to accept the recommendation of the sub-committee and Col.

Plummer seconded the motion. The motion was voted upon and accepted by the

board.



PRESENTATION: Rittenhouse Asset Management (Suzanne M. Cunningham)



Portfolio Review as of 08/31/07



Annualized performance comparison report

Equity Diversification Analysis

Common Stock Positions

Quality Update

Leaders and Laggards

Significant Transactions



Philosophy and Process



Differentiating Characteristics

Investment Process

Fundamental Research ? What they look for

Disciplined Risk/Reward Analysis

Portfolio Construction Guidelines

Sell Discipline



Market Perspective and Outlook



Market Valuation Is Reasonable

Corporate Earnings Remain at Record Levels

Economic Growth Is Solid

Favorable Outlook For Large High Quality Growth



Portfolio Holdings





New Business: Mr. Milner announced that his term expired on June 30, 2007 and

this was his last meeting. Mr. Hugley stated that his office would be

appointing a replacement for Mr. Milner and thanked him for his dedicated

service to the Pension Board.







Old Business: None





With no further business for discussion, the meeting was adjourned.



The next regular meeting is scheduled for October 3, 2007 at 2:00 p.m. in the

Mayor?s Conference Room. The guest speaker(s) will be from Madison Fixed

Income and TCW.







______Julia A. Rasch ____

Julia A. Rasch

Recording Secretary

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