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HomeMy WebLinkAbout01-18-2008 Special Session Minutes Minutes of the Special Session of the CITY OF OCOEE GENERAL EMPLOYEES’ PENSION BOARD Held on January 18, 2008 At 150 N. Lakeshore Drive Ocoee, FL 34761 AGENDA ITEM I. CALL TO ORDER – Vice Chairman Reed A.Vice Chairman Terry Reed called the meeting to order at 8:40 a.m. in the Commission Chambers in City Hall. The roll was called and a quorum declared present. Present were Trustees Terry Reed, Jean Grafton, Tom Hendrix and Wendy West. Trustee/Chairman Russ Wagner arrived at 8:48 a.m. Also present were H. Lee Dehner, Attorney; Joe Bogdahn and Mike Welker, Bogdahn Consulting, LLC. B.Approval of Minutes from Special Session dated September 25, 2007 Trustee Reed called for review of the Minutes as stated. There being no additions or corrections, on motion made by Trustee Grafton, seconded by Trustee Hendrix, unanimously it was, RESOLVED that the Minutes of the Special Session of the Board of Trustees of the General Employees’ Pension Board of September 25, 2007, be and are hereby approved. AGENDA ITEM II. NEW BUSINESS A.Money Manager Recommendations/Presentations - Bogdahn Consulting, LLC. Mike Welker started by bringing in the first Money Manager, Baring Asset Management, and introducing Eric Maskalunas. Mr. Maskalunas thanked the Board for giving him and Baring this opportunity. Eric Maskalunas stated he knows this is an important decision for the Board and that they take it very seriously. He said Baring also takes it seriously in terms of managing international money and said they have been doing this for well over 100 years. Eric Maskalunas thanked Bogdahn for their due diligence in the selection process and giving Baring this opportunity. Mr. Maskalunas then began the presentation. He said there were three things that would really summarize how Baring works as an organization in managing international portfolios and went on to explain. Eric Maskalunas continued and said their expertise was as a global and international manager. He said the most important thing about Baring was their local presence and briefly explained. (Chairman Russ Wagner arrived at 8:48 a.m.) Mr. Maskalunas continued with the presentation. He concluded by asking the Board to think about diversity. Mike Welker asked if the Board had any questions. Chairman Wagner apologized for being late to the meeting and then Mr. Welker asked some questions about performance, to which Eric Maskalunas responded. Attorney Dehner advised he had questions to ask Eric Maskalunas for contract purposes, to which Mr. Maskalunas answered and then thanked the Board again. General Employees Pension Board Special Session Meeting, January 18, 2008 Page 2 of 5 Mike Welker spoke briefly about commingling international funds. Attorney Dehner stated an Ordinance amendment to the investment section of the plan was pending and would have to be passed by the City before the Board could participate in commingled funds. Mr. Welker said in the interim they would get exposure through an index fund. Mike Welker then introduced Curtis Spears with Fifth Third Bank for the All Cap Value product. Curtis Spears thanked the Board and began his presentation. He gave a brief overview of the firm and said the three main points that differentiate Fifth Third from their competitors is their experienced team, their process that is rigorous and continuous, and their performance, which has been excellent long term. Mr. Spears said Fifth Third is headquartered in Cincinnati, Ohio and he went over their organizational structure. He then continued with the presentation. He concluded by asking if the Board had any questions. After some discussion, Attorney Dehner asked questions for contract purposes, to which Curtis Spears answered. Mr. Spears then thanked the Board again for their time. Mike Welker concluded by speaking briefly about Fifth Third’s performance. Joe Bogdahn introduced Gary Williams with DG Capital Management and said as Mike mentioned they have more of the growth orientation here in capitalization styles and would be a compliment to Fifth Third on the value side. Mr. Williams introduced himself briefly and said he was here to talk about DG Capital and a strategy they manage called opportunistic growth. He then began the presentation. Gary Williams said their value statement to clients is to provide them broad diversification but to be very flexible in the way they run portfolios and at the end of the day the thing they do the most is think a lot about capital preservation in terms of risk, which is very different for Growth Managers. He went on to explain. Mr. Williams spoke about DG Capital and their structure. He spoke about their objective in managing All Cap portfolios and capital preservation. He continued with the presentation and finished by asking if there were any questions. Mike Welker asked questions, to which Gary Williams answered. Mr. Welker mentioned the separate account minimums being increased and said he thought the minimums were a little bit lower when they first spoke. Mike Welker then deferred to Attorney Dehner. Attorney Dehner asked further questions of Mr. Williams and then went over the questions he asks for contract purposes, to which Gary Williams answered. Mike Welker thanked Gary Williams for coming. Mr. Welker then gave a brief recap and spoke about DG Capital’s performance. Joe Bogdahn introduced Andy Holtgrieve with Rockwood Capital. Mr. Holtgrieve said it was a pleasure to be here and began the presentation. He spoke briefly about Rockwood and their team. Andy Holtgrieve said what he is going to describe to the Board over the next few minutes is an extremely disciplined opportunistic and successful All Cap Equity style that hopefully will impress them. He talked briefly about preserving capital and Rockwood’s philosophy. Mr. Holtgrieve continued with the presentation. He spoke about stock ratings, what Rockwood looks for, and their process. Andy Holtgrieve continued with the presentation and explained why they slightly underperformed in 2006 but said they outperformed the benchmark by roughly 6% in 2007. He concluded the presentation and asked if there were any questions. Mike Welker asked questions about theme changes, to which Mr. Holtgrieve answered. Attorney Dehner then went over the questions he asks for contract purposes, to which Mr. Holtgrieve responded. Discussion ensued. Joe Bogdahn advised if there were no further questions they were ready to move on to the next company and so Andy Holtgrieve thanked the Board. General Employees Pension Board Special Session Meeting, January 18, 2008 Page 3 of 5 Mike Welker spoke briefly and then introduced Steve Stack with ICC Capital Management. Mr. Stack thanked the Board for having him here and went on to introduce the firm stating that many of their clients were in the state of Florida and therefore ICC Capital understands what the Board was going through. Steve Stack began the presentation and spoke a little more about the company. He spoke about what a Multi Cap Equity product means. He explained their process and investment focus. Mr. Stack continued with the presentation and talked about strategy. Attorney Dehner asked questions for contract purposes, to which Mr. Stack answered. Joe Bogdahn then thanked Steve Stack for coming. Joe Bogdahn talked briefly about the different approaches of Rockwood and ICC Capital. Mike Welker asked the Board if there were any groups that stood out to them. After some comments and discussions, Mr. Welker spoke about the Board’s options. He said both managers, Rockwood and ICC Capital, have been top performers and went on to explain. Chairman Wagner asked if the Board was looking for a partnership of two out of the four managers. Mike Welker stated yes but said that there is one more very important thing to talk about and that is the cost. Mr. Welker stated the most negotiating power they have is with Rockwood and ICC and went on to explain. Brief discussion ensued and then Mike Welker continued. After further discussion, Chairman Wagner asked if this change meant they would sell the Mutual Funds and take everything out of Trusco. Mr. Welker answered yes. Trustee Grafton asked if making these changes meant Fifth Third would handle all of the funds. Mr. Welker answered yes and said Fifth Third would handle it all but the only difference retirees would see is Fifth Third on their check instead of SunTrust. He said the biggest thing on the Trustees side is that there will be three or four accounts within Fifth Third where the plan will own the individual securities and Bogdahn will work with them to make sure any money gets posted to a receipts and disbursements account and then gets allocated to each of the Managers based on the Policy On a motion made by Trustee Grafton, seconded Statement set. Further discussion ensued. by Trustee Reed, unanimously RESOLVED to have Attorney Dehner draw up contracts with ICC Capital Management and Rockwood Capital as new All Cap Money Managers for the General Employees’ Pension Fund contingent upon successful negotiations of the contract. After further discussion, the meeting broke briefly for lunch (11:20 a.m. to 11:40 a.m.). Joe Bogdahn introduced Mike Spencer with Voyageur Asset Management. Mr. Spencer thanked the Board and said he was here to talk about the Voyageur International Equity Fund, which is a commingled vehicle where you join in with other investors to have the money managed in the international arena. Mr. Spencer then began the presentation. He spoke briefly about Polaris Capital Management and their track record. He spoke about investment philosophy and cash flow. Mike Spencer continued with the presentation and concluded by asking if there were any questions. Mike Welker said Mr. Spencer did a good job of answering all of the questions he had about expectation and performance. Mr. Welker asked if the Board had any investment questions. Chairman Wagner asked if they talked directly about the down side as far as numbers were concerned, to which Mr. Welker said yes, that Voyageur’s down side is very strong because of their cash flow and their process keeps them out of those areas in the momentum markets that eventually crash. Joe Bogdahn spoke briefly about Bogdahn Consulting having a number of accounts with Voyageur. Attorney Dehner then went over the questions he asks for contract General Employees Pension Board Special Session Meeting, January 18, 2008 Page 4 of 5 purposes, to which Mr. Spencer answered. After a brief discussion, Mike Spencer thanked the Board for their time. on a motion made by Mike Welker asked if there were any questions. Discussion ensued, and Trustee Grafton, seconded by Trustee Hendrix, unanimously RESOLVED to have Attorney Dehner draw up contracts with Baring Asset Management and Voyageur Asset Management as new International Money Managers for the General Employees’ Pension Fund contingent upon successful negotiations of the contract and upon adoption of the Ordinance amendment to the investment section of the Plan. A brief discussion ensued regarding the pending Ordinance. Joe Bogdahn stated if there was a hold up on anything concerning the Ordinance that needs to be explained from an investment perspective he would be happy to set up a workshop with the City Commission to answer any questions they have. Joe Bogdahn then introduced Carrie Callahan with Galliard Capital Management for the Bond side. Ms. Callahan introduced herself briefly and spoke about Galliard and their team. She said they had a great year last year and stated Fixed Income markets were the most challenging they had ever seen. She said they had a fantastic year in growth with new accounts coming on board and said they added six new positions in the firm. Carrie Callahan then began the presentation talking about how Galliard runs Fixed Income and their philosophy. She concluded the presentation talking about what the portfolio would look like and asked if Mike Welker had any questions. Joe Bogdahn asked some questions regarding their separate tips mandate, to which Carrie Callahan answered. After a brief discussion, Attorney Dehner asked questions for contract purposes, to which Ms. Callahan answered. Joe Bogdahn thanked Carrie Callahan for coming. Mike Welker briefly explained why he thinks it is important to have a separate account. Joe Bogdahn introduced Brad Coats with Agincourt Capital Management. Mr. Coats spoke briefly about himself and gave an overview of the firm. He began the presentation talking about Agincourt’s approach and performance. He talked about what the portfolio would look like and said they do a particularly good job in tough times. Brad Coats continued with the presentation. He stated he was proud to say that Agincourt did not and does not own any sub prime mortgages. He said they invest in very high quality mortgages and while those have been hurt a little this year they have suffered none of the pain the sub prime market has. He continued the presentation and concluded by going over their performance, fee schedule, and portfolio structure. Brad Coats said Agincourt would very much like to have the assignment and they appreciated the invitation to be here today. Joe Bogdahn asked if there were any questions. Attorney Dehner went over the questions he asks for contract purposes, to which Mr. Coats answered. Joe Bogdahn asked if there were any other questions and thanked Brad Coats for coming. On a motion made by Trustee After some discussion the Board decided to go with Agincourt. Grafton, seconded by Trustee West, unanimously General Employees Pension Board Special Session Meeting, January 18, 2008 Page 5 of 5 RESOLVED to have Attorney Dehner draw up contracts with Agincourt Capital Management as the new Money Manager on the Bond side for the General Employees’ Pension Fund contingent upon successful negotiations of the contract. Joe Bogdahn said Mike Welker will be working on the transition for these changes and will be in touch to see that it all comes together. Joe Bogdahn congratulated the Board and said they appreciated the business. Chairman Wagner thanked Bogdahn for the great job they did. AGENDA ITEM III. OTHER BUSINESS A. Payment of Invoices Invoices were included in the packet for the Board to approve. Trustee Grafton asked if the Board made a motion in the past to cover their education, trips to FPPTA Meetings, and for their certification. After brief discussion, Trustee Grafton asked that the motion include having the certification fee paid for by the Fund for any Board Member who wishes to become certified. On motion made by Trustee Grafton, seconded by Trustee Reed, unanimously RESOLVED to approve that the bills and other charges and fees be and are hereby approved for payment as presented. AGENDA ITEM IV. ADJOURN There being no other business, the meeting was adjourned at 1:07 p.m. Respectfully submitted by Approved by: Debbie Bertling ______________________________ HR Analyst Russell Wagner, Chairman