will you be asking responses. >> will you be asking for responses to both or pick one or the other? >> i envision one rfp but inviting both profiles of candidates to submit is that helpful. >> so we can expect to see both with a recommendation. >> whichever you choose. >> yes. >> i'm sorry commissioner. >> no, no that's fine the driving point for me this is not what i see this is based on the material here so just a reiterate you stated your approach to get guidelines at the same time having a staff to enhance where you are today you have great staff but adding to

that and issuing an rfp. >> the first to issue an rfp okay that will take sometime we would also conduct a search for staff those two will go on simultaneously and probably come to an end at the same time when they're in place together the three of us meaning you know the external party and internal hire will present the guidelines the guidelines will be 6 months away. >> so we're talking 2016 almost. >> 2018. >> the infrastructure will be the - are you asking when the first investment will happen. >> kind of a benchmark. >> i'm going to throw out guess

around december fwith 2015 maybe march 21st 2016. >> no, i'm good. >> great so mr. cokeer when i come back with the rfp with the end result you'll have the privilege of looking a direct program of fund to fund and a customized program in the responses from the rfp the way you envision it. >> yes. >> will that same will all of that be brought to the commission to look at it in two's or one recommendations to the board. >> at the discretion of the board i prefer the policy and jay you may state what the policy but i'll do whatever the discretion of board do you want to answer that.

>> staff is tasked with conducting the rfp and bringing forward a recommendation for hire to the board on all the investment dmoilts so to answer your question the question for parole could state they could perpetrate potentially all 3 models the hybrid and direct only and fund to fund and the signal from the staff the recommendation and i think we have basically although it's not clearly state not having the restriction we could decide to go fund to fund completely or defying direct the recommendations to the board their skill set that made us decide to recommend them and the direction they will go and

commissioner president before we get to the recommendation there will be a set of final recommendations to present to the board whether fund to fund or direct and so my vision you'll see some mix of them in the semi if not lift we'll conduct due diligence on site to 9 place you have places that have offices all over the world but we'll do onsite and bargaining the change in the board policy we'll bring back the recommendations. >> great. >> and so we get to vote that up and down. >> that's the cotter policy yeah. >> great. >> a few things to lineup things up a lot has been side

said on the transparent issue walk me through the practical world month to month they're to talk about the deals. >> you mean in the real world. >> are they going to do it more often or give us news flashes over and over this is the last thirty days. >> it really does completely don't think the managers that we hire and what we can negotiate with them there are some that will agree to provide you with separated accounts so you see their holdings on a daily basis and on that will provide you their holdings but could so on a lag basis like. >> quarter end and there or on that will not provide holdings at all but risk

and for about exposure and another group in between second and third to a risk agree gator and we see the agency gas station of all the managers combined so there's many. >> if you can walk me to i know this is helpful for me and hopefully for everybody the work transparency is a way to look at the report you get so you can proximity sometimes the flow of it so walk me though how we protect errors and problems to be in the top four or five of performances i see most of the blew ups working for one person working with a firmer it's stupid but i don't see the firm

of the manager could you walk through that and help me said it. >> let me try here i'll ask leslie to participate as well to date when i worked previously we have not had a policy that we shall require the manager to provide us with holdings because you can't do anything less than the policy that's our preference and what we have aid for but we've found that in some people want to hire a level of team but we have a team at uc and we stayed very close to our managers we'll tell them that up front and we'll be up in the top

clients that stay close to you, we found by i've heard earlier back in last spring about rudy sailing saying about rudy hopping son all the trips to china rudy do over 0 so 60 trips he was one of the people that was on the road we stayed unusually close to manager we found by doing that we had a greater understanding of their integrity of their investment philosophy their investment process and frankly most of the managers enjoyed it they like clients that have a thorough understanding but we didn't make it a policy that they shall

employed holding we thought to our own due diligence be close to them we never had a blowup of the type you see that's been around the country and in addition commissioner some of the headline blows up that you've seen like madoff that's incredibly bad due diligence that people involved in madoff they were producing their own statements of their own investment values not a third party custodian that was providing an annual audit so basically west ridge was another one managers claimed to out perform for one hundred and 20 straight months the odds were

one hundred and 90 trillion. >> well - >> but the bottom line we in our situation we did not think we needed holdings to accomplish our objectives which was to have an a rated understanding of the strategy. >> thank you i have advocated with this proposal of allocation the fixed income was 20 percent i've been advocating below that number i'm supporting the number and supporting the consolidation of higher entity rather than calling them out with the true belief there will be meaningful work in those areas so explore them i believe in overlook that the

package was talking about san francisco real estate versus st. mary real estate which is a pin on what i've been saying all along i'm advocating san francisco yes, but when we when i spoke to the allocation i was specific about the bay area of san francisco to include silicon valley to include oakland and areas where there's optimistic state and growth factors and limitations on planning departments and where there's in demand out pace took him look for this type of background to say i don't want the bay area don't tell me excuse me for expressing that that the prices

are high show me why you believe it's not going to do better and why the banks are underwriting on the growth tell me now we've reached manhattan prices why everyone buildings it's going to go the other way and we're not going to maintain it if we maintain it cities like oakland will grow a lot better a than they've been growing and that's where there's on tusk areas i'm going to ask for a be a strong spokesperson. >> commissioners, i understand your passion and i looked at the bay area and the warriors stadium is going to be the best

and ton of potential and look at the list of companies that are on page 15 and i go this is an amazing economy we have here i guess - >> i concur so i believe we should be part of it and the recommendation is contrary to that i really wanted to be backed up with more than the simple two or three 0 worldz words amy's scale maybe we should take 60 years worth showing you show me when it went down and why we shouldn't i'll be a happy viewer in the facts prove me wrong i'm happy to say hey that's good information.

>> you know i guess where i continued to read this and probably talked about this too much time i don't take it at post value we're just not approaching gateway cities like hong kong and new york and london, etc. i guess i feel short of kaufr out the bay area real estate where was that my job and our teams job is to hire the best managers in the best strategies and give them liability to execute it's not now job to narrow it to a specific region of a country 0

that's where i feel short. >> art do you want to comment on this i agree xoerld e wholeheartedly and there is no opinion of whether or not to do real estate we've gotten managers in the area and the city and we'll continue do that. >> you said to do a meaningful look at not only san francisco but san francisco bay area real estate and as we develop that sector of real assets we've report that back to the board so you said you will keep is advocating for it but we'll take a meaningful direction to let the record reflect this particular area. >> yes. >> my question to leslie on page

7 of your report. >> this is my last question you have cash expected return 2 and a quarter i've not seen numbers like that what do you expect changing forward in the next if you months to double of the return on cash. >> this is an infinity oh sorry about that t you should buy it immediately. >> it includes our northern trust program and all you still don't get p there. >> that 2 and a quarter seems for normal treasurer bill rate and usually cashew solar inform

inflation in its return our long term inflation is two quarter and cash is basically made equal to that but that's definitely a long term assumption you know we're macon that and could be for awhile. >> okay. great thank you very much okay. i will now open up for public comment on the motion before the board everyone has spoken if you've shared your thoughts on the hedge funds at the beginning of the meeting there's no need to repeat our comments we're - but you have the absolute right if you choose to you. >> thank you, commissioners i want to say i appreciate the extensive discussions but one of the things this is the tail wagging the dog we're still upside down in the process and

in experience as a commissioner on similar benefits board is a similar view by serving as a benefit board commissioner one of the things we'll do first before the rfp was put together as board members all the concerns you've expressed you've put in the forms of direction to our concerns if you all share them will be part of the rfp and you'll know exactly what's included to give the direction when ou want in that rfp not that you wait to see what is in there or someone else decided that is because you ultimately made the dignities so you should give it direction and the other thing your talking about the guidelines and what you there are many questions earlier about the guidelines and maybe those will be you can in the next process down the road you need to set the guidelines and vote

on the funds fund manager and all the areas you need to establish the good morning, supervisors before i go further otherwise what's in the rfp and whater people sitting on it is this and that or how is that if you don't set the guidelines up front and let us all know including the staff where your km from and the minimum standards you expect how can you go forward so it's the tail wagging the dog you don't see the basically ethic bask set forward first before you vote it's all over the place you may not want that to be part find our motion i understand that but unless you set the guidelines and standards and give directions i don't know how you

can move forward. >> i have a say you taking a vote on something a blue print you haven't developed speaks volumes mr. cokeer is paid millionaires thousands of dollars a year a blue print even awning an opportunity to be invited to the table to develop that burglary print as secretary i type rfps this plan should have been presented with all your consensus in place this is a failure just the way it was prepared be to you interest it mrrlg you were the main chairperson for the o 50 o

$60 million loss for a plan for a hedge fund go ahead it's a $61 million loss to the fund and commissioner paskin-jordan you stated on record videotape it you r that you don't invest in hedge fund yet you're here promoting the hedge fund without a blue print or plan. >> bryan what can i say you had lunch are a hedge fund person and took his recommendation leon you came in with a 20 percent reduction even though for some reason that is nice for you another that time and sir, your real estate you're a developer a person i connected

yes show me the prove and guidelines o guidelines should have obey present to all of you you sir, you ladies and gentlemen should have been wrought to the table to develop a plan you vote on nothing an air nothing was given to you so for me i'm sorry this is not the good thank you. >> thank you. >> herbert wiener i sort of want to bring up a relevant issue in 2009 the government oversight committee heard testimony from the grand jury the grand jury was sounding the fire elementary school alarm that the retirement system was going bankruptcy because a salaries from the police department and what happened please fire protect

our benefits the controller's office the mayor's office claire murray the head of the retirement fund stated the retirement fund was perfectly solvent in not in the murder in the third degree of the recession so this whole thing about the protection against the retirement city hall going smash i wonder about it in 2009 in the midst of the recession why we're coming up with those hedge fund is beyond me this is something i'd like to bring up earlier in my testimony and now there's a chance we may be sounding a false fire alarm and sense we're taking on unnecessary risks and

those guys are vetted from the hedge fund we'll not be vetted so do this publicly so we can watch and as far as the members of the board goes okay each think of you is free to invest in hedge fund on your own do it on your own and do that with my scent do it to our pleasure but for 0 god's sake leave the retirement system alone thank you (clapping.) >> welcome back. >> i just want to try to reassure my name is john fur land my name is john fur land. >> i really do want i dislike

wall street as much as you guys but the hedge fund are less risky as i've tried to tell you than the public equity they own okay they're trying to derisk the fund for i there's a problem they have and it's very difficult problem this is not what you want to spank about but. >> your 3 minutes is ticking laura. >> okay. all right. i'm not going to make that point then do you know of any recent example like in santa fe they've shifted the hedge fund and attracted top management. >> bill i'm not opening it up to q and a i'm sore and that's the key issue okay secondly do you know of any alternatives to

alternatives so to speak that will be cheaper one of the biggest investment managers in the year black rock that will be able to devise a custom e p f system for a small fraction of hedge fund and for 2 and 23 third will be willing to look for emerging managers in the hedge fund as you know small merging merchandise out perform dinosaurs and fourth given the objective political opposition to the hedge funds will that effect our ability to trick took up managers? and i'll leave it - i'll leave

it at that thank you >> thank you, sir. >> commissioner makras and commissioners we've made it a long way today, i'm representing fossil free san francisco i want to support range and file for the retirees that have been here we've heard there was a letter from 12 other unions it's des moines stiff how many rank and file members have come to speak its zero self-appointed committees and leadership don't necessarily carry the wealthy of several people taking time out from their lunch break that's not my point the board look at tobacco and other corporate issues as well as fossil fuels

we've heard we collectively stand in hedge fund for the transparency it's enforceable for the retirees to say they're not going against the hedge fund policies when we say transparency we maple holdings this is like all news i value the discussion first of all, but when we say transparency we mean holdings we need to insure that at any given one millisecond period the retirement system never held tobacco or companies doing business with sudan or other companies and fossil fuels that sustains i read a couple of weeks boo ago hedge fund are julian into fossil fuels abused the values are although it make

sense so the investments class will not only be critical but the entire key to the entire financing thing if you go ahead and approve that i wanted to take the rest of the time to talk about the national sources of the allocation last year in number we voted to create an e f g committee to take care of the things on the end to a year that committee has never met and here i am with a documentary i want to present to all the commissioners tech thank you very much that has basic guidelines with respect to the natural resources allocation of the real asset allocations i don't have time to go through it i'll e-mailed e e-mail it to you. >> it basically makes sure that

the use of investments are above board not only in x tlak the locations. >> time. >> the energy section didn't indicate point renewable energy has been invented so i'll come back and speak again but i urge you to set guidelines to match the san francisco values we're heard and all support thank you. >> good evening retirement board members nooemz is los scott the immediate past president of i he 21 and the vice chair the retirement union members but i