commissioner bridges commissioner driscoll commissioner melberger commissioner paskin-jordan commissioner stansbury a quorum is present. >> thank you next item public comment any members of the public would like to address the public on a non-calendared item. >> good afternoon david. >> good afternoon. >> on those (inaudible) my question is how will the - minutes question and the special meeting open december 3rd be put into a agenda item important this - (inaudible) some other first question then i just want to - >> great, thank you. >> good afternoon claire. >> hello. >> address the comments - the membership (inaudible) and hedge fund (inaudible) up here to do today is to - sign off and hopefully everything (inaudible). >> kimberly. >> good afternoon. i do (inaudible) let the chair know and the board that has been satisfied (inaudible) the board (inaudible) sociowe can - that is the amount (inaudible) available for (inaudible) to take more for we understand this - (inaudible) that appeal (inaudible) and maximum effort we would like to have (inaudible) at least in the next quarter (inaudible) thank you. >> thank you any other speakers? seeing none, i'll close. item number 2. >> item 2 approval the minutes of the san francisco retirement board meeting. >> i'll 0 move adaptation. >> any public comment on the minutes all in favor, say i. sure. >> i want to make one minute if i could after the first, the good holding police spoke in opposition and presented a petition of 3 hundred signatures that is the first case under general public comment to release 3 hundred signatures in opposition to hedge funds and it's not not minutes. >> is it that or that - >> and present 3 hundred signatures who was the second of the motion. >> i was. >> any other comments all in favor, say i. passing passes unanimously thank you item 3 please. >> okay. >> i'll entertain a motion of adaptation. >> i move toe adapt. >> opening it up for public comment on the consent calendar any questions or comments seeing none, all in favor, say i. passes unanimously thank you item 4. >> 4 is the (inaudible). >> i would ask the chair unless he has anything compelling we can accept it as submitted unless you feel that it is you would like to share something that was a public meeting we all attend. >> i think 12 people attended commissioner stansbury was not there and commissioner paskin-jordan so again, i suggest there are documents regarding the infrastructure and natural resources on the agenda i suggest it you have not attend look at those documents with due diligence we the different groups from infrastructure made their presentation and someone was involved in the infrastructure program at the california state towards a portfolio that made a suburb presentation so if you haven't had a chance to review the information. >> any questions seeing none, i'll open up for public comment seeing none, closed next item, please. >> review and approval for the questioning question for the core plus fixed income. >> thank you, norman and good afternoon, commissioners i'll ask leslie to brief us in rational for this recommendation. >> thank you, commissioners this is for the investment advisors this is a key progress to extend since 2007 since the core plus managers have been in place the 3 current managers that are two portfolios one of which was formally managed by r d o and now ohio beggar is beating their best tracks to performance wise things are well but organizational changes and some personnel change with the retiring of the head of north america income it is time to refresher that part of the portfolio to look at other things in the marketplace until we look at the other process and see if there's any questions. >> great the chair will open up for a motion and open it up for questions. >> want to make that motion. >> thank you a second. >> now i'll open up for questions. >> yeah. >> you mentioned that performance leslie you mentioned performance was not an issue i'll be looking at the performance for the one year number before the benchmark before 80 odd points they've out performed for 5 years bye 90 basis points so the performance is excellent historically i understand the issue in terms of the turnover but in terms of the trembles i don't see it usually. >> ask. >> you want. >> go ahead. >> there's no preconception we'll terminate the managers it they meet the requirements and qualifications alleys may end up being retained and so we expect them to be part of the process and there's no expectation or no preconception that any of them will be termed we wanted to look at other alternatives. >> i'll talk about the allocation the consensus among the staff and i believe the board reduce the fixed income from 25 percent of assets to 15 percent wrong number $2 billion so, so if we're going to be over that time local government dating 023 builds in bond how to hire a manager particularly we'll belogically the portfolio assets so we'll might hire a manager for example but fixed income will be a source of capital i'll vote no on the motion i suggest 0 recuse use those managers as a source of capital last time we raised the staff took money away from premise ma to me performance trumpets the issue of staff turnover and turnover for the fund i know it's american people's important issue but to me the performance triumphs so i'll vote against the motion i think reducing the fixed income and the performance for the managers certainly boo above their benchmarks and staff has better things to do so i don't see it. >> other questions. >> no questions. >> i wanted to wait. >> my comment commissioner melberger is i think it is great there are good past performance but we have a consultant to let us know earlier if there are staff that mediate or could impair in the future it makes sense to relook at a firmer if there are indications something maybe happening if they >> this are being an sfooel good thing how difficult everyone expected interest rates to start rising and they've done the opt on the long end i think we are at a tenuous moment in fixed income markets but the current environment could last for a while i wouldn't want to premise this search that, yes interest rates with are going up and we want to be sure we have managers that are flexible in managing through all kinds of investments and the other parts of the portfolios are dlavend we've been through incredibly positive credit cycle this portfolio is very credit incentive so we want to be or even a portfolio and endorse to count. >> similar thoughts i think that is important and valuable right now to have the managers at the helm on the one hand having a growth scare in the economy throughout international china even so i think it is valuable to have managers he helm rather than when the return market is going to give you you and the endorse is going to give you. >> yes i'll concur we should do an evaluation so in the this is more my concern so given that i think that is important before this recommendation. >> commissioner driscoll. >> i support the resolution to h pr s p one the reduction to premium was not regarding the performance we monitor how much of the managers that we're a part of we have our own discipline in the wait and sub areas they've crossed that it was one reason they became the source and two their excellent managers in he remember of that core area even if it is report that two different portfolios from the same company are allowed to manage the portfolio with their independent strategies i'm not sure when a when that will continue but to revisit this part of the fixed income portfolio and our fixed income portfolio is aggressive looking at what we're doing below so if we want to get return not to that is safeties versus do we had an rfp yes and a agency to the allocation change if it goes forward it will take one to two years and where the money will be before the reallocation is done that may fact a long period of time do we want to constraint it in one marry that's why i'm supporting this research. >> opening it up for public comment on item number seeing none, i will close pub public comment and commissioner melberger. >> one comment i wish that view point would be shared we had a major exodus of employees two years a major exodus of clients it was not take into consideration so i understand the idea of turnover but be consistent managers can be the same staff that have done the currency overheads rewarding the percentage it is not 25 percent that a deny has the total zaul is 12 percent under go management and the fixed income not the higher number you saw so again i'll vote against this i hope there is more, more resources to deploy. >> and to clarify r d o is murdering under aberdeen and have another $600 million to so the $3 million presented in this staff report is the correct for aberdeen and $1.3 million. >> all in favor, say i. opposed? 5 to one thank you. >> call the next item, please. >> item 6 a discussion item report on the investment of the retirement fund in the educator ending 2014. >> thank you, commissioners a little bit of a rough corner not too much slight loss for the quarter rebounded until two days ago but we'll see an update it on the end of november but through the ended of september we lost. >> thank you, commissioners to tend the quarter $9 billion in assets it was down 1 percent and the 12 months at the end ended at the end of september with the robust 11 percentage above our expectation and quits i entities were down 2.8 percent that was a market and negative ruptures in non-u.s. equity markets had that are diversities between small cap which is under performed large caps and that's true in ashley was well and a big diversion between the u.s. and don u.s. entities markets the plan has had an overlay of entities and that as a positive effect on returns with fixed income the portfolio returned must .3 during the quarter which it versus a plat universal index the index did better and more credit incentive the higher mayor eric garcetti debt under performed that is well gifted within the asset classes and i'd like to say that performance is pretty much met our expectations for most of the managers given how the portfolio is structured to we'll all set there on the overlay performance do you have questions. >> questions. >> commissioner driscoll. >> can we go into the total report i'm looking at page 21 and 20 attraction analyze focusing on the allocation number once in the the large negative for allocations in the alternative areas those numbers because they logic their progress is slower but how significant that large number it i'm looking particularly the 10 year number minus 17. >> that number means it has been disadvantages to be underweight in private equate. >> in the underweight issue. >> yeah. those are evaluated rates if we had been at the full rates the full wealthy every quarterly which is impossible that never happens you'd see zero or overweight a positive number because the underweight is persistent there is a 17 numbering negative number that is a relative return relative to the policy benchmark. >> the columns under active management positive for the 2 year number and negative for the 5 year we know in the real and private equity those come in smaller with the understanding of the timing of the numbers again, that's minus 60 point 61 and plus or minus another i'm trying to get a feeling for a problem. >> those numbers are probably indicative of anything that the imperfection which is public equality because six hundred basis points that's aggressive that is a substantial benchmark to try to meet what you have in last areas it is a very difficult for private equity for the logic and evaluations to keep up with private entities i'm sure you're aware of mostly glarp during this period glarp and s mp and what our seeing is a bit of a logic and still positive over 10 years but the more recent period the markets are strong a lag this benchmark is meant for 10 or 15 or 20 years not 1, 3 and 5. >> it has to do with the masturbate in the benchmark not the performance of the managers it should be changed those things are not what we need to change okay. thank you. >> questions. >> seeing none, i'll opening it up for public comment on item 6. >> seeing none, i'll close public comment thank you for your reporting call item 6. >> item 7 discussion items for the review mr. cokeer. >> thank you gentlemen i'll ask leslie to walk us through the key elements. >> so thank you leslie with the last thing we added one manager to the under review list we've discussed on several occasions the growth from pimco as well as pimco who manages a debt portfolio under review we don't think the impeach is something we'll recommend action with the portfolio but obviously the one has been the leader of the firm over a long period of time their organizational impacts that need to be monitored we angeles did a effort to meet with mr. gomez at the firmer and other products some of which there're endorse for s p f pi know that u news visited the sites we're transacting that careful but does see an immediate cause for concern there are 3 firms taken off the review list 1952 due to the for a second their terminated two of the real estate managers and e ii and y b r lou incarnate see 0. >> we'll open up for public comment seeing none, i'll close public comment i would like to say that the overall watch list looks at great it takes two or three you years ago there appropriate attendance being given and the attendance does effect tour bottom line it is nice to see would you, please call item 8. >> decision item. >> commissioners may be one thing to highlight to les comment on pimco go down to southern california and spent a good amount of the day with the senior leaders bob and i spent an extensive amount of time meeting with others on the senior team and we were buying the strategy we feel that strategy is unphased in my way by the departure of mr. gross he want to do point out the expensive due diligence on the strategy we indicate in here about the performance this county month in december we'll the market becomes 70 most old is the tide for the longest i

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