To school at berkley im not going to hold it against i. I want went through the Public Schools i have a passion. We balance them out. How about going onto the consulting process thank you i didnt i wasnt over elaborate but pages 13 and 14 our approach to consultant we believe passionately in building a disif i had portfolio to achieve the best possible return for clients at a risk level appropriate to that clients liability structure and the tolerance for risk i mentioned earlier we have clients Public Safety is an interesting one were any return above 9 percent goes to pay or half of the increment goes to pay a pb i to members thats a horrible design important a pension plan you dont want loot volatility if you eastern half it and leaks out that system is very, very tight in their risks a dive if i did they try to arena different plans are more tolerant to the equity so we try to build projects to meet the tolerance level for risk on the board as well as the liability structure of the plan we generally build as it says in the first disversified that he at the end to do our Market Forecast and update them on a 5 to 7 years upgrade the credit you had good assets held by weak owners that were willing to sell them at any price a plan with patience and expertise and capital were able to invest in our abilities and generate outside returns on that credible opportunity were not to say 37 and forget it we tend to look at every year xrooild opportunities for the clients to take advantage we had a long Term Forecast so we tend to balance risk and return opportunities across time and across asset class page 14 describes the stooldz we use a number of tools to determine and work with typically the staff and the board to develop a number of alternate assets mixes to look at in great depth with must not lens in terms of risk and return how does that work in terms of liability and is that a risk to hedge philosophically we believe in embraced the chance in allocation and take advantage of the opportunities as they become apparent are apparent and work for the highest possible return theres pages on the back that describes that in more detail the tutor actuary firms have a long term said it and forget it mentality thats not us i dont know if you want to add you were talking about research. The biggest thing is we tried to build a mostic there is issues with any types of allocation model and useful that his of information we want to draw those out from the model and build a more robust portfolio. Tim was going to tank you through quickly the Research Organization and support. Great on page a. Whether sharing our math views at the Committee Meetings having the researchers talking about the investment market or getting our markets sent out on a regular basis or coming to the working group weve talked about the allocations to use multiple model in a mosaic approach we try to be dynamic with the 7 years outlook to tilt the portfolio when we see outside risk investment we dont see those now but most markets are valued we try to be innovative overall organizational cultural we collaborate with managers and bring them ideas and build products products well not be academy but launching a product and having providence priorities in the founders class of benefit our clients longterm and in collaboration with our clients 0 work to customized solution once we get those ideas into the portfolios to make sure it is efficient in the portfolio and then ongoing monitoring of the managers as well on page 7 by 7 as you can see the Research Team i think the points are that there is coverage across everything every category you saw on the page the consultant also on there the growth and research over time this is research has been part of the mp c culture with the 39 team well continue to grow as we think about the next 5 years not in that fashion ether the last 10 years weve gotten everything covered because of the researchers and the clients e clients that is part of the Resource Management and needs to grow the team and another point the various backgrounds folks like the team here folks that came up through the organization and come from other consultants and folks that come from the Money Management side or other backgrounds and lastly the cross efforttion over the teams it make sense to have a management infrastructure where we have a dedicated asset team a manager Research Team and private market team for efficiency but we work across the categories to the extend e stent how to get the equity exposure and engage that the Research Team or Hedge Fund Team or our private market team to collaborate on a efficient way to implement within the eligibility. Page 18 and 19 to give you a sense of manager progress i know weve tubed the manager allocation for new ideas we have an approach that is will flexible we can work to build our own preferred lists and our Research Team it update those and having the managers we have the most conviction with scoring on the alpha getting rid of by the time to and looking at the consistency of returns over time and trying to identify investment that his where why we think this manager can outperform and his edge that is something we can turn back to if and when a manager begins to perform if we believe it we should expect that manager to out perform Going Forward if something is broken maybe time to look at that manager and our Due Diligence committee theyll meet every other week to talk about the strategies going through the pipeline and getting vested with the challenges they will get to make sure weve gone through everything we can to make sure the analysts is go robust and lastly only 19 side existing exposures an ongoing Due Diligence process were doing an annual review with every manager and strategy in our portfolio if theres an announcement some sort of event that is material we issue a client review we believe the investment time is changed and the it is time to get but of the essence a letter between 48 hours to clients summarizing the events and what action needs to be taken thats an on process you way. On a friday morning that bill gross left well get on top of that we had a partner on a monday morning we were the first consulting 0 company to meet with the new c i o any questions thats a brief organization any questions on the team or process. I have one your page 7 on your Research Team do you call out how many women are designated or in line for a principles position. We dont have any principals. If you look at anyone with a consulate title thats the pool well look. Or rather look at it from our gut. We have female principals not in research at this time any other questions. I have a question. What did you decide to do about bill gross we issued a client review letter saying this was a meaningful business event and that exposure should be reviewed across portfolios that said the areas where we thought that a review was critical was with the unconstrained bond fund where mr. Gross had a day to day responsibility so all assets and more focused strategies like credit and duration strategies review it from a business prospective but get comfortable with the total return we suggest you had a review of the landscape of competitors ill say our whether or not i see went 50 50 with the replacement and city of chicago with our company we didnt want to box the clients in and say terminate by the way, we didnt think there was a run for the doors and plenty of liquidity to manage the challenges. Okay. I notice it doesnt count for liquidity so can you deal with that number one and number 2 crisis is a stated destruction a major summation. Theres not normally distributed theyre not we recognize the flaw that several of our tools not just me but risk budgeting and Scenario Analysis rely on price movements as the risk measure or the metric to derive risk and recognizing that blind spot we built a separate tool to perform the liquidity analysis well look at all the liquidity and stresses for liquidity to private markets programs in place any lock up you might have and in flows and out flows on a base case and stress test is it everything coming in slower or fast we throw out all the volatility matrix and focus we recognize were not focusing on the pail enough for the variance or the risk budgeting and allows us to get into the tails with an extreme recession we try to goss close those gaps with the separate tools and lastly the access that was mentioned your Research Staff is assessable so a board member has a question can we contact you directly whats the preferred procedures. You can go directly to Reach Research over time it more Effective Communication to throwing the community they can cooperate and make sure everyone is on the same page but make sure the consultant teem are in the loop no one is it missing anything. Thank you. We have no more more formal comments youve put out an rfp we didnt chose to pressure it but one we have known of bills activities and respect for your staff current and form and had the right resources on the team to support you and so we choose you to be our client and we think weve organized the right set of resources and the right people i go to beach blanket babylon i get teary eyed when they play i left my heart in San Francisco. Bill anything more communication. Thank you, bill take advantage one thing that allen mentioned theres real quick i believe in the past year that mp c passed on doesnt participate in more than hundred and 50 rfps theyve ripped replied to few allen indicated the hes inspired by the possibility of working for us and the city obviously is near and dear to my heart hes supported by an organization that has both great breath and deep depth of research and prudent their initiative and creativity we thought that was the right consultant for this board we believe this board is willing to be innovative and creativity and pioneers you know willing to be leaders out in front we believe this is the right consultant for this board. Thank you open up for Public Comment. Can i ask my question or do you want to do that afterward. Thank you commissioner makras im president of the United States of pacific shaw it was refreshing hearing his team talk the word transparency 20 years is a long time between changing general Investment Community and something didnt smell right when the e r s fiduciaries failed to put that concepts in the quarterly watch force between 2013 after the hedge fund e r s invested and lost key clients instead of angeles received a greater allocation 5 months later it was bankrupt it was failure of monitoring effects concepts it didnt smell respected right when the e r s staff didnt monitor it it explicit smell right when news broke the angeles investment apparently offered hedge fund im glad to hear we dont have a hedge fund and definitely didnt smell right when the news surfaced in 2008, jack rice the candidate and the City Attorney received political contributions from keypads that provided Investment Products to our plan 20 years is a long time the smell test is mall fixed up so badly lets hope the next 20 years in a new general consultant had smell better his team sound like the right team i want to circle back to the lady and the ethnics commissioner peter king a law professor noting commissioner cohen is a Good Government guide Means Nothing not a legal document and. 30 seconds. Commissioner will not allow the ethnic to rely on the basis for their admits behavior from this board you should mitigate going to lunch with the commissioner. Thank you. Next speaker, please. We cant do q and a only to comment i cant direct the questions. If you direct a question im sorry to say it will not be answered use your time appropriating appropriately. This board had anaconda tension meeting in january in terms of how the Pension Funds are invested ill be curious to see how you see them moving that allocation Going Forward ive also curious how youll see the returns on that category Going Forward more generally ill be interested in the views of in terms of Initiative Strategies how one deals with the two percent return Going Forward when those guys funded 96 percent after the equity market has tripled i was wondering in you have any consultant at the top of your alternative or any of the other categories for private equity or hedge fund do so what is of the background of the two top dogs in the allocation what that is mit professor and going back to the 50 50 you said you know what how do you see yourselves protecting the funds from i dont think youll have another 2007 or 9 anyway those are my questions. Great any other speakers great. I just like to say that im a san franciscan too i was born here and weve been go through a lot those days having to do with our housing crisis and also theres been a lot of attempts to do pension reform im a member of this system i retired from city and county what wear im looking for a member from the board and any Consulting Agency or organization is that on a honest and competent and honest and transparent we need honest city and integrity and openness thats what if ir7 on the board id like to ask you why do you want to be here why San Francisco why would you like us as a a client there are a lot of politics we want to see that exactly you know but it will be part of your environment so i cannot stress how doing our job you know having good work ethics but being open and honest thank you great seeing none ill Public Comment is closed. Ill do questions by commissioners commissioner driscoll. Yeah. I want to clarify some of the things in the materials you gave us on page 18 you say 10 thousand strategies who do you mean by strategies as used there. Investment products essential. We sent out different managers with different strategies. Okay on page 27 one of the graphs you have the phrase marginal risk what definition are you using there. Thats volatility. We dont we will use risk as well use volatility with certain models we dont think of risk and volatility to be clear. You mentioned several tools to the allocation thats why i ask staff to follow through your particular answer your matt haney any p t c it is clearly written in those materials how you find the allocation more important thing you talked about the word right facts not fact toys but im trying to understand you sent me this experience with your year 2018 and 2006 forecast theres no specific adequacy you have other years i can compare to it goes to the issue of facts and the degree of adequacy with this tool we follow. Quarter to build our assumptions for each