Transcripts For SFGTV Retirement Board 3916 20160412

I believe is here commissioner stansbury a quorum is present thank you well start with the announcement first of all, we will go into closed session be our first item for the day any members of the public here okay. Good on the ground well go into Public Session after the closed session any members of the public will be letting you know well go into closed session so the chair will entertain a motion to go into closed session commissioner confirm Public Comment. With any members of the public like to comment to into closed session to discuss the matters hearing none. Public comment is closed. A vote is not required okay. So well go into executive sessions any members of the public your excused we will reconvene what w when were done if youre session. Okay good afternoon, Everyone Welcome back mr. Clerk can you tell me what item. On item 4 general Public Comment oh, yes general Public Comment how could i forgot mr. Roth man, i have a card for you were going to go into general Public Comment a reminder we have 2 minutes 3 minutes everyone 3 minutes. Thank you. Good afternoon. Im richard roth man rertsd city worker and 3 items one is when i was coming her i recommended i called the it department a month ago to ask for help about south my password and realized none returned my call maybe the board wants to find out about the it and the hedge funds how come i read negative articles an article yesterday in the chronicle about hedge funds and their returns are not better than the average returns so you know hedge funds are so good why not good articles again hedge funds and the final item yes. The chronicle yesterday. An now dead piece. Anyone can write and submit. It hazard to be approved by somebody i dont know what the chronicles standards are and the other item will i dont know just really bortsd me to my left is the city has agreed to attorneyss that worker or work for the spreadsheets city and good on to the justins judges will change the formula when they do reciprocal agreements i have a been around the retirement issues i thought everybody what is everything was a city Charter Amendment i thought everything has to go through a city chapter to change anything about retirement issues and the other things a matter of equality it is ironic those attorneyss will get an increase in their retirement or change the base to get more retirement yet the city wont drop the lawsuit and pay the 396 retiree theres no reason why this board you know they wrote a letter saying there is money in the funds for the attorneys so why cant they write a letter to the city savoring there is money the fund for the pre96 retirees, you know, i find out some of the pre96 retirees pension is 18,000 a year it seems to me ironic the city can take care of the attorneys or was advertising take care of themselves yet not the pre96 retirees something is not right thank you. Thank you before we go further in Public Comment i want to announce well continue our closed session at the end of the agenda so we can stick the clerk will take the roll what is published and go vote not to disclose at the ends of todays agenda members of the public that want to take a step back in general Public Comment now is your time john. No, hes not john fur land. Herbert wiener mr. Wiener why not you speak youre the closest. Yeah. Herbert wiener i like to support what the previous person stated it is unfair the pre96 people are cheated out of their cloolz their coworkers and you know so many people that come to mind when i think about 2 they shouldnt be cheated the hedge funds you can losses our shirts if there is places that went bankrupt all of those bulbus securities they are not regulated their semi regulated and thifrldz i didnt get any retirement packet today hopefully that is an exception to the rule i normally get one thank you. John fur land i believe next. Yeah, he got to speak on 3 items 3 things just briefly touch on the first two this hedge funds you guys are still dont get did hedge funds are not an asset class only a way to invest in good portfolio assets if you find portfolios manages with to be honest the hiring the ultimate have felt guys quotas a cue because he knows what the good funds hedge funds out there and has person reps with them so you just hes wrong as for a second item ive talked about scheduling a lot i hope with the hiring of ms. Burr necessarily she seriously be looked at the dont get complacent things are wed the japanese bond ill not beat this would the third with only i have not yielded discussed the idea of momentum and it is funny people focus on hedge funds your losing money in International Things their dramatically under professionalism up 2 percent over the last 5 years okay over the last 5 years thats 26 and 22 percent of assets together ill argue that that that performance was forecastable 4 or 6 years europe was in a huge mess starting in early 2010 and two or three years ago china was transitioning that is difficult for emerging markets you can read this any day of the week the momentum and the relative strength i favor has been heavy researched and now the factors they like to talk about ill suggest that ms. Burr necessarily when she gets a chance to look at this is the 7 anniversary of the beginning of the bull market i dont know if beer in a bull market but my message dont get complainant the longer 24 goes on the banks play their ridiculous games especially in japan and europe the bishtd or bigger the risk the hedge funds allocation gets by adjoining june of 2011 that is 3 years after that was first proposed you guys have to act more quickly. Thank you. Any other members Public Comment is closed. Mr. Clerk, call item 5. Item 5 age action approval of the minutes. The february 10th rent Board Meeting a motion to accept the minutes. Move we adopt the minutes take Public Comment seeing none, Public Comment is closed on item 5 well take that without objection. Well take that without objection. Mr. Clerk that that motion carries and item 6. Ax an action item with consent calendar. Thank you very much a motion to adopt the consent calendar or a discussion . So moved motion by by commissioner paskinjordan lets take Public Comment on consent calendar or the no comment on item 6 well take that without objection. If we can came back take this well take that without objection. That that motion carries call next item 7. I believe were going to item 8. Oh, excuse me. Im sorry it is actually 9. 9. Were going to 9. Yeah. Take a few things out of order. Negligent 9 discussion for the president Portfolio Update. Im looking to see in cambridge is on her way we have art very good commissioners this is our review as presented by primarily cambridge for first private quantity followed by the access. Thank you. Art a comments. Sure first up will be Portfolio Update for the project for the portfolio it is a longer standing Portfolio Performance were very, very proud of the recent performance is very strong our challenge will be to maintain the level of returns weve enjoyed historically this is a high evaluation with that, ill hand it off to the team to walk you through. Good afternoon, commissioners were here to present an update on the private program the three of us represent the team members from the private Equitable Team im the San Francisco and covered california is here weve opened that office this year but bans the Boston Office and youll see him regularly audry it here regularly but behind the scenes working hard on the program and were part of the dedicated private Equitable Team with cambridge and we have 15 strong across the office the San Francisco boston and london as well as other places in terms of relationship with the retirement system weve been working with you. Close to 2 and a half years on the private Equity Program in terms of slides that is in your packet well not be going through all of them but highlights on the portfolio snapshot of that and what weve accomplished are last year in some of the areas for the exposure for the year to come. Were thinking maybe 20 or thirty minutes for the presentation and the balance questions from the board does that work. It works for me. So can you just turn the page to 2 of over index the executive summary quicken through that art mentioned the program has performed well on a relative basis investing in private Equity Program for thirty years and 2014 was a very productive year that was 8 hundred and 50 millions in candidates in 2014 was as productive yet the program condominium close to a billion dollars and 20 managers of the 20 managers 11 were new and those new managers developed those relationships in cultivating those was a lot of harrods across the staff and our team the program today f is building towards 18 percent allocation for last year and it currently at 13 percent so similar was presented to you at 11 percent for continuing to build there and continuing to enjoy the real strong distributions that is particularly from the buy out investments from last year funding raising environment was competitive and you know youve seen weve brought into the recommendations a lot of assess managers or ones that were getting allocation cutbacks but the ones were working on developing that relationship early and fast as well as cambridge were working well and collaboratively making individual introductions so we are choosing the landscape its great were getting ideas from our team and staff and vice versa former biweekly polls and schedule strategy sessions but were in time on a daily basis with any member of the team on the investing does the approve comboikts market we continue to prioritize where pockets of value we see in that mathematic and where to make the recommendations looking at page 3 this is a quick at some point of the program thirty years plus the 2 youve invested and currental 12. 7 percent and the years committed 7. 8 billion and through that has generate in terms of value 3. 3 billion in value if i can move to page 4 a quick at some point of the performance of the program youll see the bar charts that is down the middle there were comparing the performance for your private Equity Program in various periods with the last 10 years and 5 years and 3 in one year those are the returns for the periods San Francisco net i r r the blue bar as you can see in every period compared with the s p were a more global index as that moves that direction and compared to the n n f i and in both the long term and short time period of the program it has outperformed with the public entities. S p plus 5 hundred and why are you seeing our benchmarks. So you can add on top of that weve got since intercepts yes, i did. 8 hundred plus with the s p and our calculation as as an npr b with the apples to apples calculation in the 10 year period yes, i did. 4 hundred plus over the s p do you think that is appropriated plus 5 we think that is a high bar today, i also s p plus 3 is probably you know what we would guide to in terms of whether youre taking more reflexes there are lock ups youre feeling 3 percent is here on behalf of the appellant. Yeah. Thats annualized this is compounded. Thats the money art and i have had conversations about a year nature with cambridge we need to bring it down to 250 or three hundred easily. So the class is much more competitive than it used to be evaluations are higher and 11. 2 that is a priori peek since 2008 way above the 6. 3 in 2000 observing liquidity premium is justified but the 5 hundred would have been applicable so because i want to think about this the 5 years how many years looking ahead can you provide a bulletin point we should be looking were the s p plus 3 and the reasons why they are that way. Sure. Sure. Okay. We vafrnt officially changed our benchmarking weve the the long percent we if i think about shorter percent it is a high bar. 250 and three hundred is the amortization. Moving to the next page page 5 this is breaks out the program returns by your sub classes and as you can see weve compared it to the cambridge benchmark in the middle section of this table here as well as again, the public indexes for the s p ill highlight the capital buy outs have done well with the cambridge benchmark for the beverage or Growth Equity or buy out funds and the manager has been better than our index and looking at page 6 we show the total vail for the private program both for the last 12 months and september 30th on the lefthand side and since inception on guess right side a quick highlight the venture had a very strong run and has generated most of the value creations close to 60 percent as you can see a lot of those are paper marked some of the investments with companies that are invested via managers are hoover and snapshot chat and others a Biotech Company so those are a sampling of the some of the names but highlighting that weve had a strong run in the last year. On page 7 i wanted to show a break out of the program in terms of endorse and were where the dollars are the ground on the lefthand side as represent by n a v across the different assets and you can see here that weve broken o as you can see t got near peeks distributions very strong distributions the last several years a lot of that is the orange which is represented in via the buy out the buy out managers on page 8 theyve distributed in 2015 and 2014 probably somewhere around two or three to 1 versus capital calls via the wine graph shows the net cash flow for the program we fit onto the negative cash flow in 2015 and as we expected there was a strong increase in candidates no 2014 as well as 2015 so as those candidates started to call down that it is slightly negative new quickly to page 9 another view of the endorses for the program by geography in terms of you know the pilot across the goals and within the u. S. On the righthand side that top portion that split lets say the highlights here made progress in expanding exposure to asia that is 10 percent now and up from 6 percent last year and then within the u. S. Via a large bias towards the u. S. West coast this is likely due to having the program having a good exposure to the Venture Capital best class in most of the manages within the Venture Capital class are focused on Silicon Valley and the west section so weve been adding to and we added last year to extra Silicon Valley venture i can move quickly to the portfolio observations on page 11 so ill move through this quickly i highlighted a few already but we did add 11 new managers in 2015 and we under wrote 9 managers not automatic yes you know strict underwriting those manager candidates and passed think 6 that had existing managers that came back to market in terms of areas we added to highlighted here in emerging market and focus and mid market and early stages and health care as well as turn around and in terms of fundraising environment weve been working hard to get access to the managers within the 20 managers that we committed to we did get cut back in terms of allocations and for casing think page 12 we continue to recommend a near term of 850 million for per year to 18 percent reach the the fact of the matter and revisit this on an annual basis and serves as a guide obviously the opportunities the market will be guiding the actual commitment case and in terms of the the premium of 5 hundreds base points. For a total management relationship in our program narrowly down to 64 that are active with the current relationships that weve continued to that maintain as well as religious freedom under review we on the right number for the program is about 45 to 65 testify managers that may you sounds like a lot but San Francisco has a really great Venture Capital Improvement Plan and given how small some of the funds or how you know focused those groups are an asset that number may im going to turn it over to scott. Why not cut back. That sorry that was cut back by 11 managers we have 20 candidates for 2015 and thats 11 new and 9 existing and 11 of the 20 did cut back from the original app we lose what is our status. Existing managers were looking to change the share of the partnership we ask for more than they can provide; right . So are we saying that our percentage of the funds what about directing value did we lose anything on the directing value. It is rising and the good news were being ambitious were asking for a large pie he when i was here our average ticket size what was lower 20 now it is 56 even though our plan assets from 17 to 19 so even relative to the different scale were more than doubling the ticket size rights were being ambitious and asking for more than that but were cut back in other situations has there been scenarios on a dollar basis we end up with less than before the prior funds they raised it and we end up with 15. If there was it was our choice. Okay. Cool. Anything we can do to help with this to avoid those help us with grabbing a and we were in position to do that we think because of our effort is our ticket size is going up teller. Were playing above the rim versus plans that are larger than this because of you are relationships weve been noousht the longstanding nature over 3 decades being in the class and frankly the proximity to the managers helps quite a bit we certainly have from a time asked others commissioners to help with the conversations. Well continue to do that throughout. But a positive on the whole. Yes. Okay. Thank you. Wraech out to the commissioner how many times do you think to do that in 12 months. Several two. Is that several i think that is much less. I think that is something we dont will well, im exploring. I actually on the opposite im resistant to have the challenge to use the contacts and the wherewith all. The board can want to participate more than the team asks you guys to participate that is true i dont know. But on your end can you check many making sure we know how many times we know who weve reached out. Ill not write a memo and not count the times but ill say several in a last year. Are you able to get us a concrete number how many times the commissioners were asked. I would say theyll have to i think there is a reluctance on staffs part i dont know the exact number no reluctance ive said weve reached out on several occasions thats true exactly how many i dont know commissioner we have to be sensitive how we ask our managers to use their time were even sensitive with tonya and cambridge when im traveling whether or not it is the right time for me to meet with managers when im traefl we try to be thuft how we use our managers time. Forgive i suggests youre not proper the future. All right. Are we able to continue moving forward. Just quickly page 13 mentioned that we have a fantastic performer with the incredible performance the benchmark is a part of the portfolio so it is 8 percent pickup in a year it is totally noticeable when we think about this good balance between merging and established managers we continue to be selective and call the relationships and add new managers this the sector of the motivation but new emerging managers trying to tackle the position for those managers at the right time and audry will talk about europe later europe is tougher in a lot of ways we have lower exposure to europe being that some of the European Ventures are uncomfortable to there has been a lot of innovation and more of a proves to me, you can be a model and want to over the pursue the venture will kind of show the vulnerability and starting to see layoffs and the bubble is burst but some kind of Interesting Times the venture market Growth Equity is im sorry on page 14 the reason this is a focus area were looking at to renovate, upgrade managers there is a bit of beefgs where a lot of the managers are move forward up and managers that are raising smaller funds they dont have a preference but it creates a situation where spurs cant get the amount they want so toovn i cant and justin are building relationships with a number of those firms for the next time around arrest future funds they grow but Growth Equity is going we know we need to renovate, upgrade the managers and given the sources underweight as mentioned the private equity portfolio is established that is the most valuable of time i think across that weve told us this spurs is a desirable manager you know theyre excited and interested and that might have put them on the map and the private equity you have the ability to go up and down so you can do smallerdates and stretch to the larger positions that the team has skillfully weve added smaller managers and the specialists this is information and we may are used this before they out perform generally so it is a verse if i had roster that are responsible and then finally some of the venture we want to add nor European Private Equity and a team member from london as well as to facilitate and introduce new ideas quickly. Special situations this is this should get more toxic voluntary outlet and situations that are something we want to pursue this has not been as attractive but the very well outlet in europe has innovate been there so we have shown something to eunice after it didnt necessarily hit arts team, if you will, is youll see more of these as this election and voluntaatility that increases from 6 to 10 percent in asian much of the exposure is still in asian there is exposure in latin america and Global Growth managers generally, we are pleased with the process we should see that exposure grow over time as the more recent candidates but the portfolio the merging market is young but there is indicative platform we view that is a Growth Market we think that has the opportunity to provide long term for the potential but a volatile but in general it is for the difference indicativers a few observations about first portfolios merging market generally, you will agree making candidates to asia in 2015 two more this year in 2016 and youll see a couple of more throughout the years those candidates are made to both existing and new managers and been critical in evaluating it is a portfolio as it grows youll see exposure to different strategies evolve and generally ace is a Growth Equity mark but more to venture and the special situations and buy outs so, so the composition of the portfolio estimate is over time is evolves and reflective of the market just showing you and touching of toughing touching on the relationship it is established and compelling managers those in health care and technology weve were seeing in asian same as the u. S. The evaluations in venture is expensive today and investing were constructive and we can climate the existing Portfolio Health care in asian is something that is interesting giving me the demographics and just the infrastructure that needs to be built up that is a area well be working with staff and in terms of the buy out through the portfolio of the local country managers and more managers that have the fleblthd to invest across the sectors well be looking for venture that compliment larger managers so again looking at the specialist and smaller managers and then the portfolio was a little bit happened early and the opportunity in asian that is an interesting area and greekt is tighter lentz conditions and thoughts the right gp to structure that so the portfolio has early exposure and that continues to play out the situation in terms of macro investments so generally, weve seeing the meeting market but staff has built you will ive up this is a distance to ace it has a strong reputation amongst the asian gp and meeting on the ground with their relationships ahead of time and several assess and constraints gp in asian and investors are looking to be successful in entertaining those allocations and building those reps will be important Going Forward. I just want to spend a few more minutes highlighting the material that is tab 3 so starting brief well page 19 that is what we create a balanced appreciative but why we will want to consider some emerging managers package 19 on the left and there is significant outperform as you move towards the right there is less than percentages of outcomes you want balanced on the right you want to see those clawed for the managers on the left that is where we get the highest returns turn to page 21. Quick yes. Yes. If you modeled out but number of opportunities for the smaller size versus the larger for the allocations of returns where do we get more bank for the buck is that large allocations or more allocations more candidates to the smaller high returns i mean i mean for you, you do have to have a problematic approach but generally, we reach a more contained portfolio. So 55 managers. Exactly so to do 10 duo to do a hundred candidates. 10 million to one hundred manager is too much diversity and not get the returns. So not a meaningful return by one investments. Thats our opinion. We on the pass of 20 managers we committing to say about right 4 to 65 relationship so generally a 3 year fundraising cycle that 20 times 3 is the 60. Youll not get better returns because youre taking more funds because their smaller . Or because youre just the work your spread i take it amongst too many funds why there is two main reasons with an for outperform moves the needle for the retirement system 10 million he versus one Million Dollar but more meaningful at the larger commitment and deludicrous the managers if you do one hundred not one hundred top core managers. Not top core managers. I think that is typical to identify that and assess that; right . Potential return is larger and the dispersion but the down see with worse the yellow the medium line no differences the sizes but the orange line there is it is difficult to view on a consistent basis and if you dont do it correctly use the time and attention look at the core lines and thats where we suffer very few can do that well, maybe yale chief amongst them were not a 2 million plan were not a 2 billion plan either there is Capital Requirements and this is the institutions 90 in sacramento but some of that were trying to be a little bit more ballads as opposed to saying were george one end of the market. Ill quickly on page 21 what this shows you is that the blue line the green line is the multiples and the blue like that is i n r the negative corelation between this chart the highest higher to the market well skip that and the final thing and commissioners this is to your point on page 23 this is the colors we focused on theres a lot of new funds of developing funds theyre in the top best performers the ventureiers not the industry you know where the best few minutes are the ones we have to focus on manager selections but obviously good relationships with the established managers you cant rest on your laurels you needed to underwrite the market and the managers there. Sorry i see a number of funds and i see there is basically go different types new van ness established so within just using say lets use 2012 on the far right the first 4 managers the top 10 managers the top part theyre all new managers number 6 is the developing manager, 7 and 8 are established and then the com opponents of who is each make up the top 10 of the cosponsrtol and in the sorry thank you after 2000 the old wise tails you had to be with the best managers to may any returns or positive returns that has been destroyed and so we view this an, an incredibly powerful slide and powerful event because spurs which doesnt have access to certain managers that are the legend firms have not been negative but lose the diversion managers that operate the top 10 and are generating the fantastic returns for venture today lp are not necessary negative declaration negatively impacted. All right. Withegative declaration negatively impacted. All right. Withtive decla negatively impacted. All right. Wideclaration negatively impacted. All right. Wieclaration negatively impacted. All right. Withclaration negatively impacted. All right. Wilaration negatively impacted. All right. Wiaration negatively impacted. All right. Wiration negatively impacted. All right. Withn negatively impacted. All right. Winegatively impacted. All right. Withn negatively impacted. All right. Winegatively impacted. All right. Winegatively impacted. All right. Withegatively impacted. All right. Withnegatively impacted. All right. Withnegatively impacted. All right. With the. This shows for Venture Capital ill. That blue is the difference the first top cortol the green is the 90 percent. It really matters. It does but what kinking is saying that new managers are not occupying that top cortol there is always been new teams forming the firms. The penalties of the return a strong belief a higher return for private Equity Managers are you saying scott that is deciphered blown away or what. I think if you look at on. Not as high as we once thought for the capital firms. Okay. Thank you. I want to say can you distinguish between the arenas for Venture Capital on smaller candidates. Thats the earlier stage fund from 15 to 25 million but average 50 million is the larger buy out. Can you give a round numbers what is the commitment size. Wed like to get at least 25 to thirty because were not successful. Less than the average that will. Less than the average that is balanced by a larger commitment. We can get 75 maybe higher if we position ourselves correctly but the smaller funds are quite small i within followup questions in terms of city college will you categorize like the first funds is the new funds. Funds one and two. Funds one and two. In developing three and four to establish 5 and onward. Thank you very much. So there is a lot of good information theyve working hard and slides an you know relative segments and strategies but in the interest of time out of respect for us have been more than accommodating well wrap up and im going to turn it over to the team. Any other questions commissioners. Yes captain please. I want to ask about the liquidity premium but nodded about the concentration, however, the other things effecting our ability to concentrate two other major funds are already demanding to be able to concentrate their risk that is effecting you are ability weve been cut back and Retail Operations raising money for private equity that makes it more difficult to get these top funds authoritative do we have other alternatives we pursue more smaller few minutes or Business Risks or two we actually develop the capacity to pursue this we dont have that capacity weve done again, if we want the money in that area that jifz you are rate of return we must develop the capacity now sorry to give a statement youre saying we should lower the equity or versus the s p. Yeah. We believe that is pro tem of 5 hundred base points was appropriate 15 or 20 years ago now with the Asset Classes are much more competitive it is now a well discovered more mature asset class of 2 having or three hundred is better by you are peers if were going something less than the liquidity please tells us and two this other number that cambridge is putting the work is m s p 5 hundred you define the footnote im wondering if we should be looking for a premium over that number to justify this is a Different Number im not sure it is doable. Yeah. You know the number im talking about. The s p. Mp m. Yes. We also have the s p dr that probably has more used to seeing the annualized rate of return. Okay. Well anyway for explaining purposes if you suggest having a hurdle go ahead a spread less than the liquidity tells you today. We will tell you soon there is an s p 5 hundred market were investing more and more in asian so well huddle together. The best you can thank you. Victor. On page 41. We started our discussion with hedge funds and then our chief Financial Officer said move it over to a column so he was suggesting the absolute same thing why are me calling them out separate and whats the difference between the two. Not a hedge funds speciaommilist cioner but generally hedge funds are the directional long term and what we term more difference firs thats youre a global macro strategies verse the equity longterm managers thats the difference. Yeah. The footnote says the font is tiny we apologize but the making it it is a multiple strategy and the hedge funds are the long buy components. Thank you it is more finely cut here and macro and longer shore and the hedge funds bucket that commissioner makras was talking about the macro. So this category argue justin but your excluding the other categories of hedge funds and credit hedge funds and. Sorry those are in the absence of the return bucket. Okay. Okay. No more questions. All right. Thank you. Is there room for Public Comment. Well make Public Comment. Public comment . laughter . Come on up john this is been a great area i want to thank art and cambridge and in the slides i didnt show a lot of overvalued you heard words and overvalued so thankful got 12 percent invested from last year that was 18 theres a adrenalin that is imposed that they call the funding my point is that private equity is volatile i cant quote the very close corelation first place to have 12 to 18 percent for the 50 percent in public equity you would only be invested 35 percent okay. But you cant do that you have to be fully invested by some sort of mandate so theyre basically hedged from theyre allocation because they are being slow and caution in investing the overvalued market since you cant kind of pull back from the 50 percent public evaluation our point you have to do something to helm so you have returns that are you know at least in the ball park to what they have first place to ask them right now force them to be 18 percent fully invests the returns over the next 5 years will be horrible the market are over valued but thats exactly what is going on with the 50 percent public Equity Investment weve for the to somehow hedge it by pushing the hedge fund forward much faster then youre doing or do that by using clicks but one way or another take your lead youre the best performers follow them and somehow get that big public equity allocation down to something more reasonable in this overvalued market thank you. Thank you is there anyone from the public that wishes to speak Public Comment is closed. Lets go to item number ten. Sorry. Just in case the lady has been be inaudible something it is gamechanging. No, this is always been a characteristic of private Investment Partnerships there is a lag it takes time to prepare a consistent amount of time they get to get the information to us some get it to us sufficiently other it takes time so this signifies that. What do we expect from them the investment. We expect open and transparent reporting; right . And reasonably northbound a this manner we try to stipulate the Partnership Agreement how much time we think consistent offer the last 3 years i dont know what we were doing before that t but a negotiation between the lps and the sponsor it takes time because it is a turn around times much quicker. How about number 31. By january thekt, thirty days after. Unaudited but not audited by the end of this month maybe but not all in prado they give us the numbers relatively quickly maybe what is accurate im trying to be practical why a lag youre calling out the lag last year, we didnt call but out the lag. It is always been there. In inspection how it works cambridge here on behalf of the appellant so close their books oftentimes thirty to 40 days to get that information sometimes faster it pe firms they close their books and question give the quarter be rectifying 8 hundred funds there as lag so the first is more update information but this is also why we have drag in our terms our performance it is on us but the benefit of 18 thousand relationships. So in fairness we may be getting it from the managers but reconcile it into a reportable form maybe a lag. Right. Is that normal business versus im looking it and saying our managers are delayed in giving us our data i think that is for the delay is a normal practice. First and foremost there is no problem we work hard to get the information for a variety of reasons. If theyre in the awe rears shouldnt there is a watch list. Yes. Thank you. All right. Now were ready for 10 item number ten. The portfolios urban design as you may know the bulk the portfolio in spurs has been is real estate portfolio more recently over the last 3 years weve bought it the definition of the Assets Program to include the Natural Resources private energy and harvested like timber and agriculture and the like it will it takes time to build out the assets weve done a good job over the last 3 years and the real assets is lower than private equity an income component so you know perhaps a less strategy than private equity at the same time, were taking here return real asset strategy the streams that are similar to private equity in their approach theres an operating focus and an emphasis from the managers to drive 0 out the returns above and beyond underlying the come dots on the real estate side were denuflg and adding investments you are managers are working hard it improve the assets and drive the operating income rather than relying think only income. Thank you art and thank you for inviting us here talking about your portfolio and the ability to work with you and your staff on that important allocation in the portfolio we promised to be efficient with our time and here to answer questions along the way if i have particular questions. Ill comment today on the historical returns as well as the current endorses within the portfolio i call think marina to talk about the opportunities today 3 central themes youll hear the strong platform of the allocation since inception and more recently and two the broadly of the opportunities that art touches on the comments and 3 paired with the opportunities with the globalization of the exposure within the portfolio the one key message id like to takeaway youve done the good job and to improve on to office with that, if i can move into the presentation for the Program Overview and the key takeaway one which is my page 2 the significant progress the beginning the alignment of the assess program and it generated every 2. 2 billion for the portfolio and that 3 generally speaking nothing else tavshth private candidates a significant activity that goes into the portfolio an page 3 to reiterate and expands on the context one we adjusted the real asset target allocation previously that was 12 percent promenade in real estate that was increased to 17 percent target allocation of real assets a broader opportunities the roll is modified to be more return enhancing as opposed to income generation and a core like real estate profile and 3 the approach through long term private investment again undergoing the allocation by 50 percent and changing from real estate to real assets and moving from core cash flow and moving from the u. S. Portfolio to a more global divided activities and i mentioned the returns open page 4 a lot of acronyms on this page ill be happy to to talk about but the key talking about the 2. 2 billions paid in capital about 5. 8 billion since the start of allocation and taken out more than you put in ant over 6 billion and have 2 billion in the ground the difference plus the residual that is the 2. 2 billion the real estate represents the bulk not surprisingly and given the allocation started earlier but resources that have contributed strongly is when you say resources the total value paid the amount of capital that is pawed out in cash divided by the resources youve gotten out 2. 20 you moving on from the dollars prospective to an i n r here we show bar charts on the one, 5 and 10 and 20year periods the key takeaway across the periods were illustrating our program has generated relative to the benchmarks the benchmarks being our private pool returns for real estate and Natural Resources and the return could be 50 of the two and we look at the returns the imply bars your exceeding those areas and anywhere from a. M. What is driving this performance is one very positive manager selection we look at the funds youve been investing and the majority of those managers and capital has done a good job, and, secondly, a sensitivity on the core real estate this is the bulk of our exposure and core has done well, it is helping to generate a lot of that. Can you expand what the marks are. Sure the green benchmark is the cambridge societies pool Natural Resources and real estate ends to end returns were doing with that were looking at the cumulative return of all real estate funds and all Natural Resource funds blended together on a directing basis over each of one of these time periods it is a representation of the cumulative opportunities set up for private funds for the program and the second one takes the universe but equally weighs them between real estate and other real assets and so roughly speaking we dont hatarget. So you say our managers did well, were performing the temps. Your staff did a fantastic job and the managers have done a fantastic job in leading the benchmarks and in addition staff has done a good job not only picking the managers and the right areas but the managers as well. Thank you. From a cash flow prospective im looking page of within you know the program not the 88 is generating more cash man consumes your program is selffund your managers are giving back for cash that is true since 2001 the orange line the cumulative cash flee that positive slope youre getting more dollars than putting in and since intercepts youve paid out more than youve paid aggregate and since 2007 that is true with a small blends of 2000. Just to clarify the procedures with income as well as dispopulations. Thats correct income from the fund and the Capital Gains from the managers selling their air underlined investment. Thats cash flow cash flee that the managers are geneva back to you plus or minus the cash flow into the managers. Thank you. Uhhuh. We expect this cash flow situation to continue yes, maam at some point will we have more money going out than coming in is that positive. Yeah, it is a blessing the program is selffunding it means the size of the strengthening it is taking more cash out than putting in weve stepped up the candidates on an annual basis sitting down but we expect your portfolio to temper off given the real estate cycle but build the size of our portfolio with the targets. Thank you. Moving from returns into kind of a better understanding what it say we own on page 8 total Program Exposure so previously mentioned were moving from real estate into a real Asset Allocation it gives us a sense for that change and how to manifest around 2 billions and 90 percent real estate and 10 percent resources if we take into account the total economic exposure our Net Asset Value plus the amount of unfund commitment gives us a sense of where your actual plus pledged exposure is this is roughly to 75 so the nonrestricted Real Estate Investments are beginning to impress express once that capital is there and if we look at that unfunded piece kind of the Looking Glass where the program might look down the road after the enclosure is sold down and our current unfunded is drawn down this will show you a closer to a 60, 40 allocation in our asset. Can you determine from the chart how much money. The one points 7 billion the difference between that . Do you have a number. One . 7 billion. Now if we pale back the layer think is identical we should see a u. S. Core core program in the early stages into a more global higher Risk Adjustment Program and so the pie charts on that page are bans is unopportunity you, your total economic exposure from a reflex profile generally using the loss terms but generally our ballads between your core and optimistic value roughly call this a balanced profile relative to the peers and we are i know moving from that lower risk expected return core real estate and higher cash flows and lower capital gain towards this open ethnic were keeping a getting that balanc so some of the smaller property tax will be here and the become replied is the geographic moving from the northern america we are 75 percent u. S. And northern america outside can you telling him tell me where the calories component is. Well call that industrial so the property type of dwraf graph the top graupt theres a a residential different from apartments. Thats a quirk we capture the data those are lumped together we get more grand letter data that includes the apartments and condominiums for example, and it is all generally housing and characteristics the majority of housing for rental housing okay. Thank you. Uhhuh. Often page 10 we look at the other side of the lenders the reservoirs exposure the portfolio and again, were seeing a program that is broadening from u. S. Upstream emperor to a more global listed program that simple is in were taking advantage of the resource type of stand point we are south at about 15 percent of nonenergy and to Percent Energy within energy a refuse balance between oil and liquid gas and dry gas and not given that represents the opportunities in this area Energy Investments have been the largest possible area between Natural Resources for those institutions to as you can see one the 950 million we commented at apace faster the 7 hundreds Million Dollars part of that were repeat after me dollars from managers and being a more global listed portfolio and the staffs ability to network and assess their way into compelling manager opportunity so that is impressed or expressed into 12 funds 75 million or 80 million per fund on the average that is across the board so within Real Estate One commitment to the u. S. But more funds and dollars commented to emily murase on a global basis and about the quarter of new candidates on a dollar stand point the managers to real estate nonReal Estate Investments weve seen great opportunities and were under target and remember this the the target i mean it depends on the chief Financial Officer and the board is a target or a ceiling; right . Were commissioner Vice President moran considering is a target but youll see that as a target. If no questions on returns or current exposure im happy to field them otherwise move on to the opportunity the market. We have a question about the target. I mentioned the target rate of returned and your colleagues made a have got presentation about the Renewal Energy i associate energy first of all, the start rate of returns how have we used it return number to drive the contributions we must sell this is why those numbers are serious to us we cant make up numbers two the rate of return we hope to return real area there will be a component of Natural Resources and question ignore the renewal areas the numbers weve seen no so good or reallocate and get away from Natural Resources or to include or exclude the fossil fuel will we be reaching our target rate we must collect from the city and were not excluding any areas and were just seeking to drive the higher private equity returns not the same level we tend not to have the higher risks the assets but compared to our historical hurdles of 8 percent which was affixed to the real estate dominated portfolio we still use 8 percent for the model i believe we can beat that. The number that was mentioned im trying to find out can we have that with this type of allocation. The 15 percent received to private energy over the longterm weve been able to achieve it it may have come down yet. Yes. The private and the resources strategy were pursuing whether net growth i dont know that will be balanced by lower returns and hopefully, will blend into 11 or 12 percent at the class return we havent changed the benchmarks im not a benchmark expert im an period of time in meeting benchmarks laughter but well work with the consultant on the proper and appropriate benchmarks for the portfolio benchmarks are difficult i i dont spend much time benchmarks radio not perfect so but but that is one of your goals to work with cambridge to find an appropriate benchmark the benchmark is helpful opportunities. Current strategies to current portfolio construction well certainly beats historical benchmark now my target which is net informal is higher than that. Thank you. Anyone else anyone else on page 13 this is key things for 20162017 for real estate and resources how we oriented the program and how our Program Captures the opportunities instead of going on each better late than never would be ill highlight each one of these and the Program Areas were focused when i go through the Market Overview if you turn to page 16 it shows the graph on the real estate side and you see that global fundraising is this the rise since 2010 that portfolio is driven by a strong market with real estate funds have been returning capital and take advantage of an attractive market with the lps in 2014 weve seen a level of funds but with an hundred 18 billion is by far in 2007 when fundraising reached one and 60 billion turning to the next page as you can see on the returns for the real estate returns have been quite strong and real estate delivered quite attractive returns especially on one, 3 and 5 year basis this has been driven by theres variations the u. S. Real estate market variations have been driven by strong interest and strong loophole buyers as well as foreign buyers and this is new this time around and in general the real estate has been strong so some of the natural things for example, occupancy levels theyve been quite strong last year at 93 percent and it is much higher than with the peak of the last cycle with the highest occupancy levels highest since 2001 also net operating incomes have been growing if all Real Estate Property types if apartment and industrial and office and retails that has been driving the com presentation in you can see on page 17 on your right interning it the next page will show scape between core and noncore cap rates that is and i priced over noncore assets what does that mean for our program you saw the program saw a lot of distribution from Real Estate Managers having selling high vaurgz and selling into core markets last year the program has seen a record level of distributions since 2010 and driven primarily by the distributions from the Real Estate Managers and this the oriented the program took to invest with noncore managers and the ones that can take advantage again those trends of strong variances the market and highly valued core market and weve seen this spread between a and class b property types and the spread 2w7b primary and secondary markets again. The program weve been looking at a lot of managers that can build class a properties and also the ones that operate think primary market on the page 18 we show construction starts so new developments have become more meaningful but lack or lag behind the developments during the last real estate cycle and weve seen more meaningful components of case managers trying to manage actually doing new development. Turning to page 19 on in europe we see similar trends returns have been strong for on the 3 and 5 year based not strong on the 1 year basis weve seen raising surveillance and core versus nonreal estate we actually have been oriented the program to invest with managers that have some needs in local markets so you may recall last year, we recommended one of the Real Estate Managers who is actually verizon integrated and has a need strategy assessing nonmarkets on the next slide will show the europeans which is quite an important driving tool for commercial real estate so as you can see the asian has been down and european banking has been down so that has been tougher for Real Estate Managers to assess the capita but presented an opportunity for those managers who can invest in securities the real estate market. On the Natural Resources turn to page 22 energy funds raising has been quite strong well see at record levels of funds raising peaking in 2015 almost 75 billion the bar that demonstrates in 2015 youll see a beg chunk the yellow category that is the debt so weve seen a lot of managers fundraising trying to make debt investments and energy and predictability the downturn in Energy Market moving to capitalize on the trends turning to page 23 well see on the one year basis returns for energy are not as attractive driven by recent downturn in oil prices but see on the on the longer in the 10 year basis the refineries look quite troefk son the right side we show finance and youll see that the ordinances of a high yield has increased since is Global Financial crisis but the fundamentals are green it presents a lot of opportunities for managers who can invest under debt and equity in energies to tampering of those opportunities well, you expect there will be consolidation within the industry as these high yield issues workout. You know capitalization. You expect within the market consolidations with all new issuance over the last few years the prices dropping if oil prices. Coupled with the issuance only page 13 were seeing here how the industry was funding the new activities two before the price in energy dropped this is a large buying this they have high energy yields this is trading 0. 50 and below that creates a good buy opportunities the key takeaway to the you, you see here. Translated to the purchasing of restructure. That depends on the managers strategy two different types of the purchase of high yield debt and roughly speaking thirty depressants returns to once that company is stabilized two private Energy Managers that will buy the depth to take control of the company itself and because this is a very Technical Area the energy depth underwriters dont have the skill set to do that if they won the company wouldnt know how to operate it youll see the focus on buying the bonds cheap and selling them and buy the debt and take control within the portfolio you recall apollo had the capacity thats one of the reasons we like them they tdm the trading orientation but have the ability to take control of the company. Thank you i dont know that. Turning to the next page Energy Fundamentals and oh, on the right youll see the Energy Prices are going down primarily because of the developing market and also increased supply the prices went down from peak levels from 7 per barrel in june 2014 to up to thirty as of today there has been further decline in the last year avenue o peck to cut production and the chinese growth fwr there is still at the prices levels and on the right side youll see that draw down of oil prices this time around is severe since 2008. Turning to next page theres been a lot of salvation that the market on oil prices based on supply and demand the chart on the left side shows the u. S. Producers have been lowering their have been shutting down rigs especially the flow has been dramatic and horizon rigs the count of new rigs is down by 60 percent from the top level these primarily effects the Smaller Companies capital so we expect that well see a lot of distress from Smaller Companies the program looking for managers that can assess those Smaller Companies and who those operate at the lower end of the market also seen economic effect the destruction across the valley chain and construction in the upstream as well as midstream and down stream assets that we think it is the right opportunity to buy down at a discount the Oil Inventories ive been declining if you turn to the next page you see on the Global Oil Supply u. S. Has been contributing a lot and growing the supply on the global level of supply there is not as big think compared to this and on the right side show oil supply plus or minus demand this is kind of the trends that effects Oil Prices Going forward depending on the force the speculation on how the supply and demand and looks at most of sources agree that we kind of like moving forward times when supply minus demand ratio becomes negative. On the next page shows returns for other upper classes theyre not as paramount for San Francisco portfolio we have been looking at the at my wife and i agriculture and timber but it is difficult to look at this process as returns came back volatile not as compelling and the number of the qualities managers in those Asset Classes is for the as high compared to Energy Resources or real estate so with that, ill open for questions. Victor. Im sorry how youre giving some of our graphs if you turn to your page 17 i look at those two graphs this is cambridges resource if i go down to page 183 sources who is my main source do you weigh it for people when your coming up with that data yours is different let me understand so i understand the back top to those diagrams they changes they have different sources yes, so on page 17 were missing the resource the c a u is the benchmark that their reported but others. If you take page 19 it is different data i i dont understand how were coming up with these. The regions are producing different ones. Yes. So especially for the data that is k c a europe the real estate funds are responded were taking a blend of people data to give us an average whatever it was provided by that speed up provider. Okay. On page 18 what did you provide there so i can follow how that i have two diagrams and i have 2, 3, 4, 5 sources. Uhhuh. And he guess as you think of our answer sir, i look at you as the, sir person we pay as an expert usual the person that represents us once you start throwing in all those other people in 2016 or is it 2015 . Or are they paid to do it is only people that report to you there are a lot of people that dont report to you that maybe another issue. That is one of the issues with the private database certainly none are comprehensive coverage the universe ours i think would be relatively representative and high quality in terms of the data we capture especially relative to some of the other methods that are out there weve tried to do is now provide you with a simple list but capture a managed multitude but as the market presents and it is important we we get returns i want to know if i should rely on that if i get a benchmark i have fought if i get it wrong if you look at this and rely on that and should be spelled out how deep it is and how secure for us to rely on. Absolutely with regards it our question on page 17 ill say that is a measure of a certain type of real estate with cash flowing the Company Provided that data when we look at the c a u this is a deft in charge of the real estate thats why were showing you both take into account a risk pry profile that is different from blue and green that the source that have data will be different it is in collecting highest return were not generally speaking as representative as the core providing you with information. That would be helpful a foot not of that i i cannot figure out that. You go through and it is too hard to go back to your benchmark. On a Quarterly Report i dont know if it is page three or four you guys dont have much depth in an open ended depth is that right. The database is tracking the opportunities on certain funds. Youll look to someone else and it has a weakness i need you think we need more this stuff to be pretty solid when we see that to rely on it and see whats out interest that is an example when staff brings the recommendation based on that they should tells you where theyre relying on this or bringing in Something Different not a shelf game and we should have the opportunity to challenge those numbers if theres a better benchmark to work with absolutely and Going Forward we will absolutely provide you greater transparency. We know on what the commissioner makras said but it seems to me the large fund area they have the staff to report to i mean it takes a lot to enter the cambridge you have to constantly send our people hard for small folks to do that your scooted our information for a large part when it comes to small tiny both technologies there are. Yes. We have a strong coverage on the small mid and large but the small spaces these funds perhaps dont have the instill listed back office ill expect them to be what is represented in the database large speaking lower representation in the installer institution Veterans Affairs theyre back offices are not as institutionalized you know when were looking it we have to say there is not much better out there i know it is scooted but their i cant find a consultant that can provide better information maybe staff can say but the question is there a better way to get information that just isnt those four data sources can you get it my other way i dont know if anyone provides that staff will know better they deal with this amend. Regarding the benchmark but too things. The quality of the data here and also the foot noting and the sourcing of the data; right . So youve seen a ton of professional services and presentations and the amount of sourcing foot noting and it is wide maybe a two page footnote and qualifications of the body of the presentation i think what ive hearing you guys want more detail sourcing and foot noting information. On the page give us a broad overview that will be helpful that was when you told about the benchmarks people that dont know this dont know. Point welltaken. There was a deception putting good charts on one page unless you explain we have data from this source and this source and that way we can understand. The only person that can fool is the person that create that chart. If any pc you have a database too coming back has a database and you have one the see through tabs were the same in those areas so that would be great to provide that on Venture Capital and private equity as different people are reporting to you. The difference inaudible . Km has been that inaudible . Okay. If you cant provides any thrills that it wont matter. I think what and then says if isnt that really a chief investment officers call this is what ill use and he signs off p on that shouldnt that be a policy instead of deciding onramp with which one well use. Whats the industry normal thats what they use it would be good to know that. Okay. Were going to have to sorry were going to have to keep on moving a lot of agenda ahead of us lets take Public Comment on this discussion. Sorry guys. No, no thats fine. No Public Comment is closed. Public comment is closed. Item 7 thank you that would be helpful. 7 discussion item and reports open is performance for the quarter he ended december 2014 mr. Shaw. Madam chair commissioners ill highlight a couple of quick points and im going to turn it over to bob well try to be available for comments if youll turn to what ill say it is on my page turn to page 21 one year ended we have 10. 64 is although, the math years the top 6 percent versus our peers we have relative returns and rang in the i think the 11th percentile over 11 years and the 1st percentile over the 15 years and public equity is outperformed over 19 years and needless over 3 and 5 years and real estate is out performed private equity youll see is not outperformed that is the measurement of the s p 5 hundreds over the last several years as well as the premium we have on the 5 hundred base points but the equity point is you know returns have been exceptional so ill ask bob to make a couple of quick comments and answer any questions the board has. Thanks bill ill focus on a couple of interesting pages i go through those reports and say is there anything that jumps out first of all, to page 13 that goes through the clauses a set of stunning fabulous that was brought up International Equity over the last 5 years the most disappointing on the list of 2. 16 when you look at directly on behalf of it u. S. Equity is going set close to 12 percent there is a couple of things currency is worth about 4 hundred plus returns we didnt get we heckled back the exposure it would have add 4 hundred base points over the years now currencies are all over the place we united continue in the future the other thing the comparison of international versus the us is apples to apples it is e m so you can see the new developers developed a bit closer the u. S. And this comment was made we meeting met with the ceo from black box the the financial crisis so go into the remaining nonu. S. Development world was further behind when you got to 2011 youre looking at the u. S. Economy or the u. S. Capital market was lagging behind so we were prime to take off and in my opinion that is the excess return the other they know we did this is something that bill spearheaded they meet to discuss whether or not there are opportunities from a version to take advantage of this market and whether or not it make sense to europe allocations to the e m definitely the most disappointing is nonmarket and adding to the nonu. S. Again, the relevance between u. S. And nonu. S. Has reached a point would you believe in Capital Market versions that are in front of us from a Capital Market prospective those are the summary of my comments ill let the rest of team jump in about their information. We dont quarterly information for the Fourth Quarter overall the market is down and the s p is up and s p was up 1. 4 percent and developed market were 4 point plus percent and down e m is weak bounded back less than one percent down 15 percent for the year the weakness is about the economy in china chinese dollars were down and didnt get hit on currency the Global Concerns weighed out the that country was down 41 percent and over thirty percent due currency expanded 16 percent positive sectors were customer staples and care and i p respectfully and we can go into the manager information if you have any questions any comments on the market so most notably in the policy we had look at impact of 16 and the market not as much as we think but those government related securities both post negative returns not only for the quarter bureau the 2015 and the high yield a negative 2. 6 and down about 5 percent for the year we did see some diversity the market but the u cd and Japan Economy and finally come dots are up in the quarter as is opec failed to met the consensus. Board any questions. Colleagues, any questions. On this discussion item yes. Please right now. On page 16 the private benchmark are you sure thats right. Yes. This is still the s p preeflz. Youre sure that number is reflective i come up with a significantly different would be the 5 hundred number. I know about the change and which column are you looking at. I will verify that thank you. Anyone else . Youre sure director. All right. Commissioner, i commissioner driscoll i see the numbers are very close yeah. You know the answer to that. Theyre very close. Yeah. Any other i dont think there are any other questions were done thank you. Yes. Well take Public Comment at this time on item 7 seeing none, Public Comment is closed. Last week to call item 8 discussion manager shaw supervisors this is as companion item just a quick kind of of comments we added dont mortgages managers to the International Core equity Port Commission proefrm related theyve gone through a tough times specifically the thirds quarter of calendar prior year very good core perform to discuss with them this is the longest serving Equity Managers we think their performance is disappointing that is a long serving managers this is gm o tom cosponsorshiper the portfolio percentage hes actually at our board for the interview when we first interviewed him hesitate retiring were fortunate to a degree his portfolio id like to take the opportunity in a has been over 10 years will be taking over and to discuss u discuss that and we understand and have confidence the manager we have one removal for the two plus products again successfully a hired a new core plus managers those managers since termed into were under review for organizational concerns and added to the status since weve gone through issues and feel confident we have the issues d that concludes the report. When are you meeting with. Whom. Havent set and meeting. Im curious about their performance youre right a long term relationship and their performance over the last. Well the numbers the Third Quarter of 2015 there were two or three hundred points behind the beverage. Weve met with them the last 6 months several times we havent weve been keeping in touch with their portfolios it is usually over weight they were a year ago before you im not sure this is huge title. Have weve seen any movement. I dont think weve had that much. Our process. I saw them a week ago it was a merging market. It is not id like to know too. Big firm. Yes. Well give you details. Commissioner driscoll that went into effect a year ago my general question is any puc pc going to comment am i missing something. inaudible . Im sorry youll have to come to the mike. Are you part of panel or not neutral so are you part of the panel or not. Hes sitting at the general meeting. Less talk about the guardian. Residentially. We review those with staff and putting the managers on the watch list and thats been around a link time and perhaps the best International Manager has suffered over the years and lyft a couple of managers and it boils down to growth of assets a ton of assets and assets are the enemy of performance the long run in emerging market theyve got a long emerging market theyve i can see theyve process has innovate kept up with the market and we agree they should be reviewed it is painful theyve been around and weve cut them back i think that requires a hard review that is basically what i seen the marketplace im curious another performance numbers if you are taking them out the portfolios you should look at that closely. Weve mentioned the capital guardian. The other question for the consultant your opinion about any manage is useful but the general allocation the report about the failure it is a Quarterly Report anything else you want to tell you. Bob has highlighted the position of portfolio our close to our target if you look at the northern report on page little chart that nicely summarizes the risk position. I bind them over. Page deae 21 and 22 our your performance extraordinary good versus our peer group in the top 10 percent at page 22 your risk positioning the portfolio on the 1, 3 and 5 basis the green squad car you see on the return basis on your at top of chart our risk position is neutral that means relative to our peers h you had an equity exposure on the high side we think that positioning Going Forward bill talked about moving the portfolio a little bit to the left by taking the assets out of things like the equity and moving them into the defensive strategy doing more eunice talked about in terms of indexed Income Portfolio a more fixed strategy and defensive and liquid government core and more the private debt to look at the Global Banking market and energy were cautious but we think is that it takes time for the oil. Commissioners a report you might want to reopen were on the managers under review at this point. So were on item number 8. Im sorry, i meant hes talking about general portfolios performance that was item 7 item 8 is managers under review to the extent it should be limited to the subject with the managers under review. Youve heard the council. Weve talked about the managers under review. Perfect, thank you. Any other comments. Yes. If youre going to make respect to the peer group know who is the top that may not be a relevant ground peer group so that peer group may not be a useful thing im sorry, i was waiting to speak so this line of change that is the first time it happens like that. Well make the adjustment. Our oversight. Commissioners any other comments nope go to Public Comment on item 8 item 8 any members of the public wants to comment seeing none, Public Comment is closed thank you very much staff appreciate our presentation could you call negligent number 11. Item 11 an action recommendations to gadget city capital and the capitals there is a seat at the table now thank you. Commissioners on were very excited about bringing you our first countrys specific strategies those two managers we have gotten to know very, very well, now youve known one important gorgeously 7 or 8 years the two managers are respectfully outperformed by 8 and dwoo percent the one at 8 percent has done so with less than half the volatility of the benchmark and an equitable amount of comboikts haitians will walk us through the actual recommendation i am going to talk about the macro environment and a little bit think was managers if you think as an active manager you want to be involved is market like china we look at Global Growth depending on what the high ends and low end numbers and 7 percent they think is going to grow over the nearby 5 years and a export driven old economy to an developer communed if youre good evening to be an active manager discriminations between companies that moved in the new economy and companies that are not an active manager has look at how the industries are set up didnt help you if you participate in the Chinese Market this is why were excited about the china managers and look at the other manager on the ousted performance numbers we see china a or the csi numbers this helped us with the two managers an outstanding comment both of the managers are chinese based but recommended the United States that is how serious theyre taking the candidates so those are the teaches managers we want to participate they get governance and thats what allowed us to get comfortable they understand the needs and wants of the large Institutional Investor now to han. The sourcing you know the number of meetings are china based managers and on the mainland and also, if you do that and actually walk through the recommendations and have the department with any d. C. In bringing this together. Sure so we did a process and ends with the 7 managers based in china we narrowed it down to 7 bill and i had experience working with our prior employers investing in china and a number of investors in europe and have been active those are the top names that came up with the 7 managers when i spent a week in china you know by a zinc and shanghai we met a lot of side auditors and staff we felt comfortable with the managers and selected two based on performance but we wanted high standards in terms of government compliance especially for this is important for china once we narrowed it to two we asked them for the research and have a more detailed memo we cant provide in open session but we can provide that offline. It is 15 or 17 managers that are here or in china before narrowly it to the 7 we thought that best from those 7 narrowed it to the two. Yeah. We wanted to focus think global and mixed managers that are in china theyre also a number of Asset Managers last week bierman and wilton and that are trying to get into dhiens they have less experience their tracking is not as strong but we had discussions with them too. Walk through the recommendation sure today, well recommend an have felt of the 200 million to two inevitability managers all capital and springs capitals theyll be part allocation within the public comboiktd those managers are based on in china which are stocks incorporated in china and shanghai and changes and treated the local currency those managers are deep knowledge in local market and excellent fracture records we see those managers also complimentary while contributing this is the first nonu. S. Participants last week bill said in the portfolio we think that china warrants two mandatory now the largest country country based on the gp d purchasing Power Authority and continues to cigarette out pace the Development China is growing about 4 to 7 Percent Development market are growing 15 percent so the slowing growth will out pace the Development Market china is the second largest Financial Market in the world, however, they represent 34 percent is not the engineer comboekts and working with the China Authority to change that the china have improved the market assess and the number of strategists will include china if this was to happen well be institutionalal benefits theirs larger and the Shanghai Stock Exchange opened in 1990 the market is young and in a position this is a great opportunities for that Asset Managers to add values and youll see about to present all the criteria first recommend 200 million to the asset return it is a long product and pain equity more than 12 percent in returns on a 3 year alone basis and the investor focus on them with the 50 percent cash in a short time of securities to hem in times of slow markets and the Capital Stock this is the leader the arena and they provide a good portfolio in 2006 started to manager the universities chief development and he is rartsd highly in china with the China International capital that is chinese. Im sorry excuse me. In the interest of time give us the highlight were about to lose quorum. You met dr. Lee in march of 2014. So overall a great track record and numbers we go e note that the returns the memo using the standard funds fee structures and negotiating stable terms in terms of range like i said theyre a climate more growth and value and returning investor they have great exceptional performance and great benchmarks and the assault weapon is one of the strongest market well caution their backward is more their roots are in high net onshore this brings their he started with stanford and spring with a high net individual, however, over time because of their Strong Development and changes to regulations in china they were able to have the clients and have a large base i spoke with one of the largest single clients today a major pension their comfortable with the infrastructure in place and helped within of the First Investors in 2012 and helped out the trading system and built out the infrastructure and their Client Service over times measles have been altered to and it was one of the farther managers the portfolio we do have to monitor them Going Forward they have significant institutionalal things over time we talked with the investors and think they have the appropriate descriptions in place over the next capture of years and theyre focused on building out the institutional client basis that will help to diverse their a o l and asked them to do the Due Diligence and can you opine on briefly and well agree with staff conclusions both of these managers usually for chinese managers are very institutional quality the backroom stands up to scrutiny we talked about with them those dialogues started last november we saw hows how those managers perform not only did they holed up by performed in a manner given the quality of the managers the more convert manager helping held up better than the more aggressive manager theyre doing mandates by the way, we on the china certainly a good place it start from a shortterm and long term prospective well agree with staff you ought to do it actively as opposed to an index basis and the pros and cons on those managers are listed in the memo if you want to discuss dan was part of that team and can answer questions. Any questions. Bryan. Maybe im missing something the returns for those few minutes are sort of buried the memo right no table last week, we normally have. Yeah, yeah and. We were severely restricted enormous of their illegalness. We can. The nonrestricted disclosure agreements and they have nondisclosure to the people im sorry cant he furniture it but cant fiber fissure not for our intersection. And they did a great document with a lot of return analysis we could discuss that offline or and were okay in terms of the inception like like 2007 for both; right . But not individual years disclosed. Thats correct. The volatility looks at lower than the the benchmark and yeah. It is significantly lower marginally lower. Has the separation excuse me. Is returns are very strong and this is an informational on or about. Whats the separation think is s p. But that the 35. Which is normal. 8. 4 or 4 or 5 is really good. The separation was twice as u. S. Public equity. In returns are aspire. Yes. Yes. The s p are the same time period it is starting in spring of 2007 that is different. In china a wider returns of individual stocks that means the values of security is that much more significant. Yes. Those fees are high for the managers for example, roughly for the active managers may be one base point is a high fee for a u. S. Or International Manager this this is 2 percent and 20 believe that was presented. With an and a half and 20. Lets say. One and a half and 20. For example, the total return is 10 percent it is for a given year what amount of fees will be paid to the manager so lets say the total return of the portfolio is 10 of that how much is the manager given and well need to know the benchmark return. That is one and a half of 6 million. Okay. Youre so one nature percent so the gross return were 10 we pay one and a half and any Incentive Fee is over is benchmark. What would that be. What is the benchmark. The benchmark and the s p three hundred for the years when the csi was outperform of 3 hundreds. A round number is a the benchmark give me an idea how many base points. We anticipate this manager will comfortably return 15 or maybe 20 percent of gross lets say the benchmark is 10 we have higher expectation but say it is 5 well pay one and a half on the 15 now down to 13 and a half. Construction is 13 and a half. Well be paying lower than that part of negotiation that we cant say talk about in public so of the remaining 3 and a half if we pay 20 percent that is 70 base point theyll get 2. 2 percent return well get 12. 8. So the answer 200 and 20 base points. I hope they out perform i think that yeah obviously im a vocational and we should be moving to china im in favor i think the fees are high higher than any manager we are gaemdz with the public securities those are not private securities previous comboikts are totally different and help with the financial provide staff all those kinds of things those are different i dont mind paying 220 but this is a public stock. Their significantly lower than stated in the memo. Im sorry. I want to thank you, my views their higher than any public securities manager and to concentrate. Versus public securities i doubt we have any manager the public works that has so i want to say what my verifies are in terms of this the high fees and the concentrated portfolios. We want to say it is low and once the value and grow manager. I heard the presentation he read it fully im in favor he wanted to give pie point of view. Duly noted. Its okay he has no more questions. Fir, i read this i said to myself wow. We want to do this and that is, i said to myself wow. Page one didnt have what were investing every investment on page one it says what we are into and i would like you to turn to page 11 that is how long it to where well be in 200 million on the first one but two weeks to deploy 2 million but didnt say were investing on page 11 of 11 the upper lefthand side it says strategy is an absolute return in china so right now i said that looks like a hedge funds to the teams are a hedge fund im a little bit confused simply going and buying 8 shares in the china market and get a license and this looks like a backdoor hedge fund. There only products well quietly pay the hedge funds fees buying stoppage. What attracted us. Not what attracted i accept you support. These along these lines one and a half percent and one and a half percent over a stated benchmark are standard fees for china managers. And think page 11 under our overall rating has an a talked about the strategy return and very Strong Performance records will you walk me through their absolute return strategy so we know what that strategy is. See if i have two products and an absolute return target is more than a 12 percent refinery the reason we call absolute it is called an enhancing strategy that is lower thats a great question areas and only targeting a couple of indexes overall with a track records with the return strategy it is not a true i think the way they termed it how at the termed it not a inadequately absolute hedge funds strategy but differentially from the index. Spits the strategy well give them 200 plus Million Dollars whats the strategy. Theyre building china based a share stocks the a share stocks and to have materially higher volatility than the ad r based in the u. S. Than the 10 percentage etc. So it is locally based stocks that are trades only locally theyre not traded elsewhere those base it is a con found market is the chinese chinese have a game letters mentality they tampering of the downturn to buy good Quality Companies at lower prices okay. They tends to own the more Mature Companies to dam egg the voluntary its it draws it down of the return so this is a lower reflex a share strategy we expect to out perform and commissioner if you look at those are able to go into cash they can defensive las vegas protect the portfolios by going into cash. They dont go. They have the ability the guidelines to over the existing. Everybody what youre suggesting let me ask it definitely more day trading. No, no. We have to thoughtful approach to cash they consider the evaluations and adjust the cash thoughtfully and existing e m managers some is restrictions think cash since i have much more ability 50 percent in cash. They referenced well highly regarded by stanford and other institutions we talked with the Portfolio Manager not the gentleman that we met with a couple years ago the ceo and the p. M. I know one local, national you know math statistics type contact an understated guy one of his colleagues bringing this to our attention we think this is a premier manager. I just met him, i guess to our sentiment i lining like the minutes to reflect something very, very clear on this particular item staff cant talk about this in public when a particular question was raised i believe thats 100 percent wrong we have a vehicle in that body we can go into closed session and talk about an investment for the complete protection to have the free flow of information staff made a discernment this item didnt need closed session nothing confident on to calendar for us the dieshgz and be told we cant answer that in public is not the best interests of this organization nothing should be withheld and ill clarify the record the stalling didnt include public comboikts Investment Decisions as being available through closed session not staff that decided it was state law that required that recommendation because it doesnt pertain to alternative or private equity needs tobacco heard in open session subject to the nondisclosure we have with the two firms not a staff decision katie can back that up we were advise and staff was advised that the public Equity Investments dont qualify to go into a closed session under state law. If this is the case it defies logic we can ask a question and told it is a slippery slope so say lets talk about that offline so when the discussions with one commissioner and another discussion with another expirations and at the end of the day to come back here to make a decision with several discussions that took place this is contrary to the whole purpose of the freedom of information of the free flow were talking about 400 million being talked about we cant talk about that we shouldnt talk about anything. Ill point out to commissioner makras other point if this board today wants to take action ill suggest that the motion just to engage those two firms and call a special meeting at the end of the Investment Committee next week to votes own the dollars amount of investment the dollars amount was disclosed think page 3 because of the separate information not the title i suggest the action the board to approve engaging them and a special session next week on the announcements. Can i clarify are we being told as a board this is information question cant have to evaluate that and not talk about some of the things during Public Sessions because from is a nondisclosure agreement. It says well not disclosure it to the public if it is the fwrdz its any one of us wants to look at this information well not be able to. I believe those are the terms of nondisclosure agreement. Question cant get to three or four with 3 people that fuss if we reach 4 then. It becomes a pub. De facto the public is left out of the discussion. We followup and provide information we dont have available this is information as a condition for us to even talk to these companies we were signed a nondisclosure agreement. Maybe members of the board that have questions they can be sent to staff offline and maybe well circle back to the board. Continued to a future meeting. Thats what all support. Commissioner makras is a very welltaken point we should have public information. By delaying and pushing to the april meeting. Well, i i guess it is march not april and i dont think that it does this would have happened with any manager we have had the same types of issues. Im sensitive to the Board Members wanting information but the board. I think question to answer t answer so you. This is a strategic dilemma. We can go back to the company and ask them if their okay to release that in a Public Meeting and bring it back from the nondisclosure agreement agreed not to disclose question went back and said what can question committed in the memo so an individual issues we can go back and see if we can provide that as long as the firms are amenable to us releasing that. I know julie want to finish my thought. Let him fetish his thought. We all have questions we want to roll the today is. So we have a strategic dilemma we ask the same Public Strategies weve been doing and get the seam results well have to change it and things will be different i personally have no concerns but maybe the board those of us that do maybe question should followup offline and come back with expirations of concerns thats another discussion. So i will support continuing it on that basis. Thank you. Ill support continuance for a number of reasons this is placing the board in an awkward position and commissioner makras questions and the performance reference that was sent are they accurate you wrote those reports about do you believe their adequate and two do the numbers that staff and any pc looked at i asked that it is a common problem not simply because you get outside of the United States but the data Different Countries have different laws about the data appealing theyre just different so im trying to find out what kind of numbers do we rely on to come to the conclusion about the performance. You figure out who will answer that with the institution the United States who you got their names and other sources this is a reference check they have performance numbers are they willing and able to share what theyve found out about those managers. Okay. Maybe they do or dont i havent talked to them but were assuming that the other. Is that always what about the Quarterly Report. Were going to pay them something this is a bigger issue i trust staffs report. Well present the questions as far as Historical Performance what we can in fact, throw the nonrestricted violation provide public if were going to eye a custodian and when we go to inevitability managers i knew then the fees would be high their significantly higher than were used to or a rate of return but because of supply and demand or theyre able to charge us im talking about the Management Team and a homicide points significantly higher than were used to why. We are Telegraph Hill negotiating the fees. I hear were hopefully continue it. How else to invest in schien it requires nor work they have to dig into the finances i was in their office they talked about the amount of work to verify the finances and most of the finances are not i know valid they work with the csr c and work with Consultant Companies and peers and have to valid daylight every number. You. Ill ask my questions offline. Fair enough. Just really quickly ive seen managers in the u. S. Theyre extraordinarily high active managers and theyre very unique in their performance in the end justifies that fee because their unique all of them does that. We have a similar fee. Yeah. So at a same way. Question invest with them in private equity and we are researching them currently. A public comboibt mandate that will be Something Like one or two at the end of the day look at the performance that justifies that they do a lot of work only covering the 15 companies and may take an active role, etc. We need to come back and why are they different than somebody that does a different strategy you can do that and come back with that information. All right. So thank you well take Public Comment and entertain a motion to continue. Public comment . All right. Hearing none, Public Comment is closed. Is there a motion to continue thank you very much there is a motion and a second and well take that without objection. The motion carries but want to note the commissioner meiberger is no longer here thank you call the next item. Item 12 the c i o report this is the reports let me ask the c i o we can accept this report as made and you certainly may madam chair requires we briefly just read out items 2, 3 and 6. Last month the board approves an recommendation we invest over one hundred million doars if they close only we get 50 million for the inevitability manager and the two strategies we asked for up to 60 million in december it closed loss month we this emigrate 17 millions and bravo that was approved in january and invested one hundred Million Dollars and got that. The 3 strategies that are allocated with the staffs discretion was approved angulation up to one hundred Million Dollars we got 60 million were pleased and finally, the d c m vulnerable china venture that was approved an investment of of up to 36 million and we emigrate 30 million im going to turn it over to the board for any questions. Thank you very much is there a motion to excuse me. Discussion item thank you. Thank you for your presentation. Thank you. I want to say one thing. Please. inaudible . Something i think we need to that about other managers and market including the stuff well, weve looked the reason commissioner in january we fell 10 percent that has radical 10 percent since then it is back up. Okay. Okay yes we have one other item that was closed. Yes. We have one. Should have been recorded. Oh, im sorry were going back into closed session. A contract signed think february 16th. Commissioners that will be recorded when the entire deal finished and closed out and that entire investment is closed. Thank you, thank you. All right. Thank you. Lets take Public Comment all right. No Public Comment thank you very much next item please. Discussion with the 1950 ii peoples we accept item 13 is that acceptable taking Public Comment on item 17 no comment Public Comment is closed. Item 14 discussion with the items report. Lets take that as well as accepted or submitted lets take Public Comment on that. All right. Public comment is c on item 14 item 15 the presentation audited Supplemental Information for 20152016 colleagues id like to accept this report as submitted. Thank you lets take Public Comment seeing none, Public Comment is closed item number 16 an action item approval of the terms of reference for the environment social and give the e s c committee within of the cochairs. This was passed last month, however, no Public Comment we need to reconsiderate that was one we needed the discussion was already had well ask you to make a motion to approve and make sure we take Public Comment. Lets go ahead and open up to take Public Comment anyone okay. No Public Comment thank you so lets take a motion to accept item 16. I move we this item. All right. Thank you. The there is a motion and a second and well take that without objection. That item passes. Mr. Clerk could you call number 17. Discussion item the executive directors report report. I have 3 things to report on first a reminder that april 1st which is soon approaching our deadline for form 700 and the required training if it is necessary the second he wanted to report that we previously recorded on the request to timing cohen from the certain justices that worked for the city wanted to report this was heard in rules committee a week ago and it was i was supposedly they approved it 5 seconds before i appeared on the First Reading yesterday and assume final reading next week that will change the existence of finally compensation. The plan it include in any compensation that a previous City Employee earned under the judges report and 3 where we are with protecting the lawsuit corridor weve completed a second round of attainments to folks not paid in their january pension checks and folks that included a continuation to have a split weve substantially come filed with the judges order to pay the few weeks that were identified as post 96 folks some folks were treeing to track down we talked about that folks that have died or retired members since 2013 and then we are on track to comply with the arey rely to the may 31st whats itself total dollar value. I believe 4 january and february the total has been 44 million we dont have the final numbers that is distinctly higher than the 4. 5, however, that estimate but this is assuming we paid july 31st, 2011, wear 7 or 8 most behind so the estimate for the 4 million or 46 million the most of benefits and that sounds like great. Please. Item number 2. This was for people that had vested benefits. We call them in active but vested their time not a process issue. Okay. Lets take Public Comment on the item no Public Comment Public Comment is closed. And thank you, sir. Could you please call item 18 retired board member. Anyone on this ends Public Comment on the good of order none has Public Comment is closed. Next item number 19 discussion item retired board member sxeb submitted a written report lets accept that and take Public Comment on the report all right. Public comment is closed. Closed session part two thank you, everyone we have one more item to go through in closed session. Is there a motion . Ill move we not disclosure our discussion. We were in closed session for item number 3. So, yes to clarify the boards motion to not disclose any of the Investment Decisions on the litigation to disclose that the board is authorized in pursuant litigation. Thank you. Thats the motion ill second that motion and well take that without objection. That passes unanimously we took Public Comment previously any more madam clerk, is there any further business before this commission . No, this meeting is adjourned thank you ladies and gentlemen, good morning, everyone good morning isnt this a Beautiful Day yes. Im adrian the executive director of the office of Civic Engagement and immigrant affairs and were here today to celebrate the fifth anniversary of Community Ambassadors program and all the people that made it happen so were very fortunate to have a number of vips well announce them as we go along the Program First of all, were fortunate is mayor ed lee is here to open todays event the fact Community Ambassadors was the mayors vision in 2010 to rational tense it was a that time program in 2011 and today, were so lucky to be celebrating our fifth anniversary would you please join me in welcoming without the fact Leadership Vision and support of our dear mayor a police welcome mayor ed lee clapping. thank you adrian. Thank you to the was office of civic gave me and Affairs Thank you. I want to say thank you to the various agencies that have been working with the fact Mayors Office with the live and free program that has been instrumental in being a Funding Sources and a conduit we have organs lifework selfhelp for the fact elderly addresses the Neighborhood Services our administrator is here working with the fact Community Ambassadors and welcome supervisor peskin as well come on up supervisor hell be you are newest recruits for the fact Ambassadors Program you you know as you may recall i wanted that makes sure we have been knows the fact history that the fact Community Ambassadors program was born out of a lot of conflict that occur began in the bayview we knew that has roots about peopleism safe in theyre afraid community and at this point we had a number of seniors and some them taking muni and doing the work or visiting theyre afraid families that suddenly became victims of street violence selfinterest the interviews and the aftermath and the interviews with our Police Department that were trying to prevent this from happening and with any Community Leaderships we felt in cooperation with the fact organizations lifework chinese affirmative action and selfhelp for the fact elderly a number of communitybased organizations like the awe alive and free program we felt if we can have additional eyes and areas working with the fact seniors, working with people going to work particularly on muni stops we can have the fact kind of assistance that people needs and the additional eyes and ears to prevent the fact violence if happening we had a number of Community Ambassadors that lived and worked and raised the bayview to come and work with us vufrl over a period of time they knew everyone on the street and say high to folks and they were coming to tourists and they couldnt get to a police or get just basic information how to assess 911 or p. I. And basic information and the best routes to get to home or work those ambassadors became very big connectors to ordinary people everyday to what was going on and basic information theyve become invaluable to people that havent been in community before and so valuable that the crime rates around those areas became lower people that walked to work and saw the ambassadors saw them on the streets Walking Around became a lot more comfortable with theyre afraid experience on the streets we rolled this out beginning in the bayview now successful we brought it to Mission Street and Visitacion Valley and ambassadors to the tenderloin and to the mission and every one of overseeing areas not only has the fact street crime been reduced by r by people that walk the fact streets remain that much more comfortable and secure and having a friendly face in the what i call the buzzing bee colors the fact yellow and black being bright and recognized we identify as ambassadors working things with youre walking practicals and Police Officers but doing the fact extra services that go well beyond Public Safety just information sharing has been valuable to everyone who uses our streets so its been so successful that literally every supervisor and every community has been asking for more of the ambassadors and wear glad to do them when we have a Strong Economy and have strong members of the community philosophically funding a number of the programs for a number of years so popular that today, we are happy to say were launching this Community Ambassadors program with the support of your local supervisor the chinatown and that is a great clapping. great addition they are bio cultural and bilingual be theyre afraid incentive tied toe people that use the streets, in fact, those ambassadors have been so good they recognize people going to work and coming from work by their first names and theyre recognized by theyre first names i wanted to say that is another example of the Community Engagement that the office of immigrant rights does thats why we place the fact Ambassadors Program under the tool because theyre a lot of people that come to the city that simply dont know how to assess the services so from understanding the municipal id card and getting information whether the events are happening, have access about the ever changing route asia time that muni might have, to where are things happening and how can i get access to the fact Senior Services and that wear using our communitybased organizations from which to recruit residents of the neighborhood they serve i cant think of a better job to be in your neighborhood speaking languages that rehabilitate the fact culture of our district and doing to Great Service of not only safety but information and everyone feeling that once you have that Yellow Jacket all of a sudden the community is there and feel pretty special as an individual residential or visitor this is two can that combined engagement backed up with our Law Enforcement personnel is engaged and in fact, each of the ambassadors do glow several days training with the Police Department so they can help if anything maples theyll be there theyll be the fact first with ans to assess the emergency calls saying i need respond on the street and if you dont speak english the ambassadors will be that bridge theyre true ambassadors to for what that name means and theyll work to make sure that everyone feels safe so i want to say congratulations to the fifth year of the Community Ambassadors program thank you for expanding it to chinatown where a lot of tourists and local residents a lot of seniors and everyone else needs to have that assess and needs to have a Quick Response but hopefully nothing ever happens but people having fun and American People caliber allergic time in the streets 24 will improve every single corridor and alleyway for people to know how to assess the information and get the fact information so congratulations adrian and congratulations to everyone that is associated with the fact Community Ambassadors program clapping. thank you, mr. Mayor we want to take 80 a moment to thank so many people that made 24 possible from the fact early days dr. Supervisor yee marshall and susan for Ethics Commission and eddy and Sharon Hewitt and most importantly someone that is our champion supported us if you wonder why the fact ambassadors are the bright iefrmz suggested it hes your hero police chief greg suhr clapping. so next up is somebody who is were pleased to welcome back to district 3 it is exciting a have aaron peskin for all the residents the district 3. Supervisor peskin as you may know was reelected to the sgrvrz and his leadership definitely been a positive diversities in enfuss spirit and energy into our procedures thank you very much and please welcome supervisor aaron peskin clapping . speaking foreign language. good morning and thank you adrian and mayor ed lee city administrator naomi kelly and chief suhr is a pleasure to associate meaningful with the mayor with the first decade im delighted it the Community Ambassador program is coming to chinatown to augment our already rich our integrate web of Neighborhood Services provided through incredible nonprofits like selfhelp for the fact elderly thank you, andy chang autopsy and thank you for the fact work you do the fact fact all my colleagues want Community Ambassador programs speaks to the success of mayor ed lee and Adrian Program ether the last half decade chinatown needs those resources this is the densest community in an dense city and, yes we have elevated crime and, yes we have unfortunately terrible Pedestrian Safety within death in and around this community a Community Ambassador program will help with all of those things in conjunction with our San Francisco Police Department and in conjunction with our rich web of neighborhood certifies providers im delighted thank you, mr. Mayor and administrator kelly for bringing this to chinatown. speaking foreign language. clapping. thank you supervisor is good so have you back when we start the fact Community Ambassadors we had a small Team Ambassadors out in the the fact bayview and now 5 years later a team as the mayor said all over the city one of the reasons we grow the program is a steady support and leadership of our city administrator naomi kelly shes broken new ground a great role model were fortunate to have her please help me welcome naomi kelly clapping. and. Thank you adrian. What a Beautiful Day to have this to celebrate the fact 50 anniversary i want to personally take the men and women in the Yellow Jackets theyve done a wonderful job and deserve a round of applause i know many of ive visited with you and done great work the tightened and the bayview and the valley theyre from our community theyre afraid residents and what everyone said earlier they know everyone by tare first name and vice versa he love the fact jacket theyre afraid bright and yellow and they have the city feel on the jackets notice that you know theyre the ones working for how and the community and the Fact Community Ambassador Program has so many contacts with the community about 33 thousand more or three hundred thousand contact over the life of the Program Three hundred and thirty thousand over the life of the communicated sgraug with the Fact Community and whats nice they know all the city agencies and working closely is 311 and the department of public works and the clerk will take the roll with the county Clerks Office Many Services within the City Government i want to thank commissioner president suzy loftus, andy chang and commissioner marshall for the great work in training our Community Ambassadors so they know how to deescalate situation they run into and know what Great Services are thank you to everyone clapping. thank you, kelly now a nationally renowned invention preservation expert we wouldnt exist watt United States boys and girls club headed by dr. Joseph marshall that serves on the Police Commission hes also an awful radio host a lot of fun so dr. Marshall has been key in teaching our ambassadors and community for nonviolation is the fact way dr. Marshall clapping. check. Okay. My radio voice is back so this is great 5 years 5 years you know i dont want to underscore the seriousness of which the Ambassador Program was created you know you heard the mayor talk about it was serious at that time, there was i remember particular asian elderly that was i think attacked and other woman was thrown off the fact train it was tough it was really tough that he i remember the fact rallies at city hall we were concerned and we knew we had to do something that was creative and hoped well do Small Business week that worked sometimes you get a lot of people together maybe you cant come up with something but with a few of us in my offers and the bayview i was concerned the fact Police Commissioner and we met in my office i remember about you know several meetings and one dwayne jones and vincents should be here affirmative action this guy was in the city administrator we sat down and what can we do what can we do we went through a few things the light popped on maybe we can create an urban peace corp urban peace corp for the fact Community Ambassadors and really the ambassadors go out interest and everyone everything from walmart walking people out of the houses from the fact train and question didnt know if it would work but it did it worked very, very well San Francisco has a lot of programs and not a lot of them are love but this is this one universally loved program the city everyone loves the fact ambassadors clapping. i am proud that is one of the things im proud of i go around the fact country and talk about the fact ambassadors im surprised is the cities dont want to grab adrian and the mayor how could be in our city thats why the fact folks the jackets im close to them supporting them on the streets they have to go through me theyre great i want to make sure theyre prepared to deal with the challenges they face and passed the fact test very, very well, so 5 years later chinatown who knows pretty soon maybe oakland will time Community Ambassadors so great adrian and mr. Mayor and supervisors and everyone that is part of this thank you and the reason we want to commend say youre part of this lets celebrate and celebrate celebrate 5 years of Community Ambassadors keep is going clapping. ill introduce this guy chief suhr shes great this helps him in his job let me i turn this over to the chief. Thanks deputy chief joe i want to tell you i was probably other than the fact Bayview Community the fact biggest beneficiary of the 3456r9d i love them i see them i cant help but hug them those jackets are getting more yellow i have to calling your attention to barbara she runs the fact bayview opera houses remembers how difficult 4 years ago, it was not going well when the fact ambassadors were born and coming in we talked about with them it got better overnight a completely different place the way that people get along and mergers the communities and doing no so moved small part to the ambassadors it made since the mayor traubd i talked about growing the program yes, yes, yes now coming to chinatown that is awful and the fact job theyre talking about is that that you see them thank them theyre really to put themselves in situations they make a safely and i have to tell you 5 years ago there were sort of restored a sense of calm immediately and thats the way it is god bless you please be savvy hope it continues to grow clapping. thank you, dr. Marshall and joe Affordable Housing and chief suhr sorry. laughter im the queen bee so the fact next speaker is such a special leader and an inspiration to all of us trooerd the fact epitome of compassion and selfless and caring it was her vision to bring this to chinatown they working hard with the fact council to make sure that happened please help me welcome any dear friend and known as the Mother Teresa is a annie chang ceo of the selfhelp for the fact elderly clapping. thank you adrian and good morning, mayor supervisor peskin and naomi and chief suhr, dr. Marshall and richard and my friend sarah on behalf of the apa council i council that sarah and i represent we went to the mayor two years ago and said mayor, we know you run a very, very successful Community Ambassador program but i think that is time; right . To bring it to chinatown because the fact problems we were seeing so i said to report back to you during the fact lounge of the Ambassador Program sarah and i walked the fact chinatown all over and later when i go to the house to see the fact reception we asked supervisor peskin to help us and the captain lazarus for this district because of the heels right outside of shop house smoking and gambling we couldnt run the fact programs inside i dont know with the fact china team does now now they were able to convince people to move ant farther so our students inside and the fact elderly will not bracket the fact smoke we want to commend thank mayor ed lee and the chinatown team to do their utmost best he loved you clapping. and as you walk around my staff will, having a selfhelp die theyll stop by the one Time Community center to make sure the fact building is safe and go up to the houselights clubhouse ape walk to the alleys i drive around schpt theyll be helping seniors crossing the fact centerpieces an stockton street and represent the fact best of the city hall and so mayor ed lee thank you for bringing this program to us and congratulations ambassadors 5 years clapping. and adrian and richard thank you. This program thank you, ann i didnt and members of the apa and want to recognize a few people from the Fact Community that helped to have the program in mission and the bayview and Silicon Valley thats it barbara