We have a quorum neck general Public Comment shall be followed we will go into closed session and not start the regular Public Meeting before 2 00 p. M. Is there any Public Comment about this item . We are in meeting is back in session. We will recognize a commissioner for emotion regarding the closed session. I make a motion not to disclose. It was seconded to do not to not disclose. Is there any Public Comment . My name is john, i am a 44 year member of our pension scheme. If theres any policeman on our board, you might be interested in what i have to say today. Willie sutton was a Notorious Bank Robber in the 1980s. When he was caught, they asked him why he robbed banks. His reply was, thats where the money is. The Hedge Fund Industry are not bank robbers, but they are modernday highway robbers. The definition of modernday highway robber is by excessive profit by high risk investment. If you ask the Hedge Fund Industry when they rip off local pension funds, they will say, that is where the big money is. If you put one more dollar in hedge funds, you are likely to get a report. It is titled a giant pile of money. Should be downloaded. I have said it before and i will set it again, hedge funds are high risk, low cost, low liquidity investment and should follow the lead of calpers and invest in them as soon as possible. Even if you Board Members have beginners luck in the hedge fund, your luck will eventually run out, and not only that, our members might thank you are great investors, and that is a good excuse to lower contributions. My two minutes is up. Thank you. Those in favor . Aye. Opposed . That takes us to item four. General Public Comment. Would anyone like to comment . Mr. Weiner, please. I would like to make a suggestion for two potential investments. One is in space technology, which is going to take i think it will be a real growth industry. The second is in automobiles because i think electric cars are going to be a thing of the future. Those automobile stocks will go through the roof. I know there are more tesla cars on the road and these are two possible investments i would like to see. Thank you. Thank you. That takes us to item five. Approval of the minutes of the july 10th meeting. Are there any additions, corrections, or deletions . A motion to adopt is an order. Move to approve. Second. Motioned and seconded. Public comment . All those in favor say aye. Aye. Opposed . That takes this item seven, investment calendar. One item. Mr. Coker, you have the floor. He missed the consent calendar. Excuse me i skipped the minutes to the consent calendar. Number 6. Does anybody wish that any item be set aside for separate consideration. I will make the motion to adopt the consent calendar as submitted. Motioned and seconded. Is there Public Comment . All those in favor say i all those in favor say aye. Aye. Opposed . Item seven. Board members, we have the final date at now for fiscal year in june. It was still estimated as we said in the final line of the first paragraph. I will ask alan to make some quick comments on our relative it has been an interesting six months. Three years ago you adopted a more consvative Asset Allocation policy. You took money to fund absolute return and you funded private debt. Through the end of last year, in a very rocky environment, you did very well. You are one of the few public funds in the country to generate a positive return. We sit at the time youre positioning is excellent. But here we are in january, we have trade wars happening, we have issues in a ran, we have slowing growth in the u. S. , isnt it nice we have a conservative portfolio . And we have just seen the sixth month of the highest equity returns we have seen in a long time. So how did you do . I am pleased to say that bill mentioned eightpoint to 8. 2 for the fiscal year. 7. 6 per annum for the five years of the end of june 30th, and tenpoint for and 10. 4 . Every one of those numbers as well above your assumed rate. On a competitive basis, that 8. 2 is the best performing public fund in the investor universe. I found one or two others that may have done better, but that is a spectacular result. For the three years, the top four , for the five years, top we . Extraordinary. And again, i would attribute much of that too late change in strategy that ironically was to position you for rougher times ahead because of the current level of the markets and maybe because of it certainly in the Fourth Quarter. You have done well in your manager selection and portfolios added to it. You will hear these in detail at the september meeting where we will get into the attribution, but congratulations. It is a very strong result. Board members, the equity market was up more than 19 through the first seven months. Our returns for july were up 14 basis points. It wasnt a lot of net to movement. They were back and forth through july. The market ended up 30 basis points. This is proving to be a pretty tough month for august. The markets are down, more than 5. 5 the first 14 days. As of last night when the markets were down almost 3 , our return was down about 1 or a little bit less than that. That is what we are designed to do. We are designed to earn good, longterm returns and minimize the impact caused by a large market decline. The market environment, a couple of quick comments here, is you see on page 2, on the two charts , is the valuations really do not present much of a headwind. They did a while back, but the earning growth last year was very strong, and the markets were down. That brought valuations back down to a more normalized environments. You will see on page 3, you know , in the long run, stock returns should resemble Earnings Growth, plus dividends. We now have low dividend rates around 2 . And more recently, Earnings Growth has slowed significantly, and that is because of a couple of factors, the comparisons to prior year become more difficult and Economic Growth has also recently slowed from about 3 . The current projections right now are for the quarter end, somewhere around 1. 8 . I do want to point out on page four, if you look under the line item titled training pe, and you go over to the far right, the trailing pe is exactly the same as the average of the last 20 years. The take a look within sectors, and that is technology where we have indicated that we have a material overweight, is the valuations are about 20 less than the 20 year average. We are also overweight healthcare, and valuations there are about 10 less than the 20 year average, even as the a last chart on page four, technology and healthcare have earned, by far the strongest returns, nearly 13 and about 12. 5 respectively, compared to the equity market as a whole of 10 . We think we are wellpositioned from a sector perspective. What we really care is of bout security selection and manager selection. But from a sector perspective, we think that we are very well positioned to to continue to do well. Page five im sorry, can i just go back and ask a question about the earningspershare growth . Yeah. Im looking at that chart under the second point. Are you on page three . Yes. You are comparing the 502 e. P. S. Growth. Is the return indicated on this chart . Is the return indicated here, no. It is just the earningspershare growth of the 500 . That is correct. Thank you. I misunderstood. Okay. If we turn to page five, a couple of things to note. What are factors that cause their market . Some pundits are always interested in this. You see it over on the far right in the second chart. Extreme valuations have only been present in six of 13 bear markets. Not particularly predictive. It also doesnt take major spikes in Interest Rates as per aggressive action. It doesnt take commodity spikes , either. The one factor that has been most common in major markets, of the 13, is that 11 coincided with recession. Whether or not recession causes the markets or the markets lead to recessions, is a point to debate, but the enemy of returns , bottom line, is recessions. You tend to have a major decline in Earnings Growth, plus combined with deteriorating sentiment. Page six, we see this is now the longest expansion in history. We are now at 121 months, including july. A concern that i have and some others have is on page six and seven, is the debt ratio to the u. S. Government. We are now well over 90 . We were at 40 just a decade or so ago, and a worry is that in the next down toren, is what firepower does the government have in terms of Monetary Policy to act as a contract to market to increase spending . That will just turn debt ratios to plunge when you have increasing spending and you have reduced inflow from taxable income. This, to me, is a major worry. Just the rising levels of debt amongst governments, not just in the u. S. , but throughout the developed world. We do have a couple of closings to announce if i can get my hands on those. These are items that were previously closed in closed session. Here we are. Blackstone real estate, we asked for 50 million and we got the equivalent of 50 million. Technically 44 Million Euros which closed last week. The strategy, we asked for 200 million, and i will ask david to clarify whether or not this is the reading here says 50 million and 50 million in the institutional strategies l. P. Im not sure whether that is supposed be a total of 100 million or a total of 50 million. David . A total of 50 million. So, anyways, this is the strategy here in berkeley that we asked for the board to approve back in june. We are currently recruiting for a security analyst and venture capitalist. We received Significant Interest in that. Again we will begin to interview in a number of weeks. I dont think we actually reported this last month. It was in the report, but i dont think we verbally announced it, first it was voted public pension plan of the year by Institutional Investor for technically a small category, which they defined as 15 billion. I was hoping i wouldnt have to explain to the board how we were voted pension plan of the year for 15 billion. Does that mean we lost 10 billion . But it is quite a distinction that staff and consultants on the board should all be very proud of. I was in the room when this was announced, and theres hundreds and hundreds, i think theres probably 1500 Pension Plans that could have qualified for this and there were hundreds of imminently talented investors in the room. We should all be quite honoured and humbled to be recognized with such a distinction. That concludes the report. Discussion only. Good job. Let me make two observations. It was nice of you to bring this to our attention. I ask asked that we recognize our whole staff for this honour that we have received. Coincidentally, i believe our consultants, i think the reps of a left for the day, that they were honoured as being the best consultant in two categories to include their discretionary product. And i will recognize a former manager of ours who is also was honoured as the best hedge fund manager. Sheer coincidence, ancient history if nothing else, we will move onto the next item. Eight. Compensation Committee Report do we need Public Comment even on discussion only . Yes. Any Public Comment on the report . I would just like to say, i disagree with your Investment Consultants. Ten year returns of 10 off, spectacular results, they are not spectacular results. You have a high risk and low liquidity investment portfolio. Let me give you the information here from the Vanguard Research department. This is on passive investments. [indiscernible] this is going back 92 years, 10. 1 . That is 100 in stocks. 100 in bonds, 5. 3 . [indiscernible] these impassive investments are passive investments, not paying expensive Investment Consultants , just passive investments. And ive said before, you only need three Asset Classes to stop bonds and real estate. Let me give you the ten year returns in those investments. The vanguard, ten your performance tenure performance, 14. 7 . The vanguard balance index, ten year tenure annual performance, 10. 3 . The Vanguard Real Estate index, 15. 3 . These are all passive investments and you thank you are getting spectacular results of a 10 return on high risk investments . That is a load of baloney and i thank you should liquidate all your investments and just have three investments in stock, bonds, and real estate his. Those are the only three Asset Classes you need. Item eight. The first compensation Committee Report. This item was continued from the july 10th, 2019, retirement board meeting. Commissioner bridges, would you care to make the report . I will make the report along with the director. He got my brain going. Thank you. Yeah, at the june, we had two different Compensation Committee meetings over the last several months, and i believe at bear with me, i wanted to pull up the materials. At the february meeting, we had covered the minutes and an update on administration costs, and update unstable value, and also we received a report on those transitions and the targeted funds. And then at the june meeting, we had done the meeting minutes, as well as approved the loan policy , which was at the full board which we had just approved last month, as well as the platform, and also discuss Advisory Services that was approved by the board last month so that covers the last couple of meetings that we had with the Compensation Committee. Everything was covered in both those meetings. At this point we are reporting that piece to the full board. That is right. This is discussion item only. Is there any questions . Any Public Comment . That concludes item eight. Item nine. Action item. Approval of the selfdirected brokerage platform. This item was also continued from the july 10th, 2019, retirement board meeting. Thank you. Good afternoon, commissioners. We have several items fee this afternoon. The first one being the platform as part of our transition, we will also change our provider dependent on the record keeper. When the board approved them as the tpa in january, that included tda as theyre preferred provider. We have historically used them with the prior record keepers until credentials in 2014, and as we began the process, we transitioned back to tda and it made sense to reconsider which investment should be available on the platform. As you know, the platform is currently a mutual fund only, however, over the years we have received feedback to open the platform to individual stocks. Participants claim theyre more likely to join the plan if they can invest directly in companies such as apple or disney, or environment leaf and they companies such as idea or patagonia. This is particularly meaningful to employees in the department of the environment, as they are learning on investing in a variety of holdings within the mutual fund offerings. Committee members have also expressed an interest in ets as they can be a lowcost offering compared to mutual funds in some cases. The item was brought to us for consideration in june, and at that meeting, staff reviewed t. D. A. As incoming divider and discuss whether the platform should include other investments outcomes of that discussion included clarifying the universe of permissible investment and establishing procedures required for compliance. Staff narrowed down the permissible investments to mutual funds, e. T. S. And u. S. Publicly offered securities as advised by outside council. We have also worked to develop a quarterly monitoring for the permissible investment in the events that the securities change the registration or Company Turns into a pink sheet. The retirement board is not responsible for monitoring the performance of these investments they are, after all, selfdirected. As such, when the platform is open to e. T. S. And u. S. Publicly offered securities, users will be required to complete a release form to identify the board, the plan, and spur the election. Staff is currently working to develop and he consent, electronic consent process and anticipates rolling this out with online enrolment early next year. Until then, users may continue to access a mutual fund only platform. We will now walk the board through the presentation. Good afternoon, commissioners i will start and just give a quick overview to familiarize yourself with what participants are used to with regards to credentials, and then we will look at t. D. Ameritrade and compare and contrast. You will find they are very similar, and then we will get into some of the details in terms of what dianne just said in terms of potentially opening it up to other security types outside these four ones. On slide one, we give a summary, and i will hit a couple of the highlights. You will note in terms of prevalence within your plan, as of june 30th, there was 195 participants utilizing the brokerage account, and it is just for mutual funds only. Is about 15 million of total fund assets. There is a restriction, a hard cap. Participants can only have 50 of the balance. There is a 50dollar annual charge. You will see, and we will look at ameritrade sidebyside, the brokerage window offers a broad swath of mutual funds, over 12,000. Importantly, again, it is just mutual fund only in the current environment credential. We will look at it in a little more detail in the next slide. In terms of who is t. D. Ameritrade, they have picked t. D. Ameritrade as their partner and they have been together since 2006. Theyve got this well ironed out in terms of what we call the plumbing, the interchange between them and t. D. Ameritrade the plan used to have t. D. Ameritrade. They are a fairly wellknown brokerage provider. The se