St. Francis. Speech during[applause] [gavel] the meeting of the San Francisco retirement system i will call to order. Shall we stand for the roll call please i mean the pledge of allegiance. [pleage of allegiance] thank you. Please take roll call commissioner cohen is out of town bridges, present. Driscoll, present. Makras, present. Meiberger, present. Paskinjordan, present. A quorum is present appreciate it. At this time will Public Comment a close session items only. Again we will have Public Comment on days closed session items only. Any comment on closed session items only . He was at this time we will return to open session. We will vote whether to disclose discussions held in closed session. Vote to disclose or not to disclose . [inaudible] [off mic] we make the motion now . Okay. Did you make a motion to disclose commissioner meiberger [inaudible] will by commissioner meiberger second bite commissioner driscoll [inaudible] all those in favor say, aye [chorus of ayes] the ayes have it. Call the next item general Public Comment at this time. General Public Comment at this time. My name is [inaudible] and im a member of the pension fund and i like to talk about my theory topic. [inaudible] anyhow its not a rhyme. It should be once upon a time if you ask the Hedge Fund Manager why you should invest in hedge funds he would say we are the best and brightest and we can outperform any other investment in any type of market. Now if you ask a Hedge Fund Manager or your consultants or mr. Gotto or any member of this board the exception of prof. Meiberger what reason you should invest in hedge funds you would all say in the event of a downmarket protection. Well 2008 was a big down year. Between 2008 and 2009 more than 2000 hedge funds after losing most of the money of their clients went completely out of business. In the last 10 years the vast majority of hedge funds have not even outperform the s p 500. Also in the past 10 years if you invested in according to the survey here, 500 [inaudible] most of the strategy head hedge funds with a 1 return on your investment. Compared with 97 return on the s p 500 in the same period. You may ask, why do Pension Funds still invest in hedge funds. [inaudible] asked that question yet you know what his answer was . Hedge Fund Managers are much better salesman than investments ones. So go anyhow i hope you read this article from the wall street journal. Dated november 2016. [inaudible] hedge funds should begin this contingent my question is, if theres a big exodus out of the hedge funds and endowments, why are we going again when everybody else is getting out . And if anybody could answer the question i would love an answer thank you. Herbert weiner could i just want to voice some concerns about hedge funds. That is, that i feel they could present an endangerment to the whole portfolio. Even if theyre only 5 because theres correlation theres conflagration and it could spread to other securities in the portfolio,. Correct me if i am wrong. Now one of the arguments is, yes, some hedge funds are terrible but some are good. Thats almost like finding the ideal [inaudible] its an internal search. I think its going to be a long one. [inaudible] [off mic] anyway i did not hear that [inaudible] and im grateful. [laughing] thats my concern. Now while people are coming into the theater while others are exiting the only answers they dont know its a bad movie. Those are my concerns. Thank you mr. Weiner. Any others for Public Comment . Public comment is now closed. Approval of minutes of the october 12 retirement board minutes. He was moved and seconded. Moved and seconded we adopt the minutes of the october 12 Board Meeting all those in favor say, aye [chorus of ayes] opposed . The ayes have it. The meetings minutes will be a doctor. Do want to take Public Comment on the item . Public comment on the Meeting Minutes . No Public Comment. Thank you. Mdm. Clerk items six action item consent calendar. Its been moved in second. Moved by commissioner makras the second bite commissioner meiberger. We approve the consent calendar all those in favor say, aye [chorus of ayes] opposed . The ayes have it. Item number seven a possible action item chief Investment Officer report. Thank you mdm. Chairman and good afternoon again Board Membership management of the narrative real quick. You will see that for the month our portfolio is down almost 1 . That was primarily because of the equity markets that were down almost 2 and also fixed income was down a little bit as well. The absolute return portfolio we do not have returns. We had soft returns when this was written on november 3 but we got a hard number now. David thinks we about broke even for the month give or take a couple of basis points. Outperform sourly outperform the equity if you want further color on that we can invite david come speak or you can see him separately. Better news, beyond for the fiscal year is that we are up 2. 73 in all four portfolios up for the year. The calendar year basis 5. 4 . Again all portfolios are in the green. Economic update is pretty much the same as its been for quite some period of time. Job growth is positive. Thats the good news. The concern is theres nothing remarkable about gdp growth or job growth. On a positive note, under item number three the American Investment counsel is a body of private Equity Investors such as blackstone and kkr and others they provide information on the private Equity Industry in terms of its value added to the us and global economy. They conduct a ranking every year in terms of public Pension Plans and their private equity portfolios. As first consistently ranked in the top five and in this past year we ranked number 2 155 plans in the country. So i want to give special thanks to art and to tonya and to justin and to glenn and cynthia and also to the board. For this really lofty recognition. In terms of some closings and things were previously approved in closed session, is the energy and Minerals Fund which was closed in august. We did get our full 100 million. The harper asset this is the our rj coinvestment that we asked for 50 million knowing we would not get that and indeed we did get 25 million. A layup which the board approved last month. We asked for 35 million and we also knew that was oversubscribed and we got 25 million. We took two additional postings that, since the publication of the board package and so i want to turn your attention to the handout that was furnished to you. First come on per song the board approved this in september and you will see we got a little bit less than we had asked for. Then also castle wake if you turn the page,. Castle wake the board approved that last month for 50 million and we did indeed get the 50 million. In terms of personnel updates 01 to give a warm welcome to joe bates and to jeremy are whats and joe and journey please acknowledge yourselves to the boards. Joe brings 19 years of investment experience could you going to be a very strong support to alan in terms of Asset AllocationRisk Management and innovation. He brings a great skill set to us. Jeremy has six years of experience and is currently supporting at and chris on the Natural Resources strategy and were really delighted. Earlier, you might recall, i said we pretty much well we had completed the build out of the Management Team and from that the next objective was to build out the analyst support and we are one step away from having that completely done. The ic meeting is for next week. There are two subject matters. One is healthcare. We have guests coming from [inaudible] which is a late stage Venture Capital healthcare specialist [inaudible] which is a Global Healthcare specialist both public and private. Equity and debt and long only an long shorts. They are truly a very deep team doing Healthcare Global basis. And Sands Capital which is a Growth Equity manager we have in our public equity portfolio and does public equity offer Us International emerging markets as well as Venture Capital. In addition to the healthcare presentations, we are going to have an update on securities lending from boat count. Regarding commissioner paskinjordans comments about our schedule we you will see we made some pretty significant commitments from the past number of years in terms of private equity. Youll see it totaled out about 2. 6 billion over the last 28 months and i also want to give special thanks to the team for crafting 21 new relationships and 28 months. You will see in the real assets portfolio its been almost equal between real estate and real assets between the two. Because real assets is new for us most of those relationships are indeed new. Again there than 21 new relationships across the entire real assets portfolio over the last 20 months totaling 2 billion. Because of the size, the total dollar amounts weve submitted over the last 20 months you might recall that previously we were significantly underweight are targets. We are moving toward those. Capital has been slow to call. Probably because of the valuations market. But weve done our part in making some pretty aggressive commitments and next up is going to be to monitor this in terms of forecasting in terms of future pacing. The absolute return portfolio was invested on october 1 in 12 partnerships in seven of the eight major strategies are represented commodities being the only one that is not. We do expect backstrom will call capital on january 1 for most were just almost all of the remaining capital get there might be some strategies that they want to invest in that might be several months away from calling capital. Its going to essentially be complete blackstones part will be completely done at january 1 and is expected to consist of 17 strategy. David has also been all over the world in the past couple of months in just recently got back from a couple of weeks in asia. Followed by a week in new york and before that he was in new york the week before that. So we been on the road a lot. Beginning with some ideas together for the class the share class b which is the internally managed part of the portfolio. First investment possibly generate probably most likely sometime in the first quarter. Then the custodian and risk initiatives, you see these are really two of the same vendor and we are on schedule tab everything up and operational by april, we think. I will turn it over to the board for any questions or comments. Commissioner driscoll . A couple questions. This piece of paper was submitted [inaudible] width yes, commissioner. We received this after these closings took place after publication of the board please is added to the minutes so members realize its [inaudible] width yes. Yes commissioner meiberger thank you for your report. I did one ask you to expand the absolute return strategy which is also known as hedge funds did they change the name on you, john. These are the hedge fund. You mentioned you invested in seven of the eight sided. Can you share with us which managers you hired . David is shaking his head, no. Really glad to have you have a conversation conversation with you in private about that you cannot disclose the Hedge Fund Managers . Im looking at my colleague and hes shaking his head, no. Any other board numbers . Do you think the funding will be [inaudible] that firstquarter . Blackstone will complete their investments generate one. Share class b and its internally. Investments will be made First Investment somewhere between january 1 and march 1. I will followup with david [inaudible] please, do. Im already scheduled. Any others . Thank you. This is a discussion item only. Thank you very much and discover congratulations on your new hires. At this point are you fully staffed . We have one open position. In the private market team to assist real estate and real assets. That recruitment is been more slow going. But its not super imminent that were going to fill that but thats the last have to fill. The board previously approved staffing of 22 and we are now at 21. Thats great. Thanks. Its a great team. I would agree. Thank you so much for your commitment. Its not easy recruiting in this market really, thank you to the board for supporting us in diversifying our plan assets, extending our research covered and really becoming a Global Research enterprise. Great. Thanks. Clerk item 8, Deferred Compensation Committee report. Commissioner driscoll at the last deferred comp meeting the key thing we did was a presentation from [inaudible] ashley presented to us. They have almost completed a thorough review of their current lineup of mutual funds. All the Core Accounts are mutual funds. The stable value is another fund though its not take technically a mutual fund. We listed them as several items that talent will continue to look at which means reviewing the ridethe consulting relationship with russell about that glidepath that affects the target date funds. Thats important because one, that are qualified default investment alternatives or options and as well as its almost a one third of the holdings now. So it is normal to be coming in that area as well as we did discuss how the new cooperman of labor rule or law regarding fiduciary rules which goes into effect april 10 of next year, how it will affect us dreck the year as well as the representatives credentialing jocular members and registered Investment Advisors when we allow them to start working. So the very important legal issue for the board to be aware that you dont were somewhat exempted from it. We want to make sure all the different avenues within the deferred comp are covered. And the managers she can report on the loan program but still was very new with been going on there. So more to follow. Our next meeting is scheduled about other changes and improvement we plan on making as well as pursuing not just the issue of these but townsend did make a positive report about these could typically work compared to our peers we are one of the lowest in the United States by far. One of the lowest. That concludes my report. In terms of the [inaudible] any questions on deferred comp report before we go on . The fees is that in the report . Yes. [inaudible] i did not bring it with me but it is there. Was broken down by every account. [inaudible] thank you. [inaudible] [off mic] are you finished . [inaudible] [off mic] Public Comment on deferred Comp Committee report . No Public Comment. Okay. Item number nine discussion item as of dcb manager report. Thank you did good afternoon commissioners. Before you is the monthly activity report that youre used to seeing. At this time i would like to open it to any questions they may have. Any questions . Commissioner meiberger thank you for the reported can you share with us with the current credit Interest Rate is now . Yes. Is 1. 59. Thats good for the rest of the quarter because he was that is correct. This is the ninth consecutive increase per quarter. It brief update on the loan program if i may. So as you can see we have included the outstanding loan balance is on page 7 of the report. The good news is that we are continuing to receive the repayments periodically on a timely basis and we are starting to see that people are keeping their contributions the same. So in theory they are ascertained back more than they were intruding earlier. That some good news good i also am pleased to announce we have recently extended an offer that is been accepted for the loans manager position within the sf dcp. We are very excited to welcome him aboard. He is going to be starting in december and he [laughing] is going to be starting in december it is very qualified. He is a lot of experience on the third Party Record Keepers side and actually serving as an account executive and is moving over to the plan sponsor side. Hes very qualified, has deep experience within the 457 six swig working with government plans as we feel that his experience make him an excellent fit for this role within the sf dcp. We are very excited to have him on board. Any questions . Any questions . Be public on the sf dcp managers report . Thank you. None. Thank you so much. Thank you item number 10 action item review and approval of the economic assumption reviewed the adoption of economic assumptions for july 1, 2016 valuation. Good afternoon commissioners. We are here for annual review or economic [inaudible] occluding our seven birth 5 investment return and chiron is here today to her presentation on that. We are not proposing any changes this year and all of them get to it. Thank you. So we reviewed the economic assumptions every year. We do the demographic assumptions every five years. We did that last year so that was a big thick report but we wont have to do that again until 2020. But the assumptions we docked here will be used in the 2016 valuation which determines contribution rates for fiscal year ending 2018. So we just want to go through the assumptions and make sure theyre still reasonable. Were just focused on three assumptions the discount rate Price Inflation and Wage Inflation. I am going to take us through the discount rate and let and take us through