funds and the beneficiary funds you're playing a loser game but that's the investment community fault they're not providing you pension funds america with an adequate product that's - >> thirty seconds. >> i have a dilemma with not easy solutions right now (clapping.) what is your last name. >> david williams. >> just for the record i once ran a hedge fund and anti performed it in 3 years. >> what's our name. >> john. >> thank you. >> david williams with the retirees thank you for listening i'm very proud of any members of

1023 one and have talked about he they feel will the hedge funds plan it is seemed to be recommended about the risks and the fees the need for transparent about the feeling they're not been due diligence that this whole mechanism of determining the asset allocation has been taken with blinder on for the last six or seven months and the lass lack of controls with the board and the hedge funds will have and the investments and fear that groups on the table like elliott management and the people he deals with that will invest their money against the unions and against the fine benefit plans leads me to once again say you've heard from many of our

members you've received many, many services opposing hedge fund investments today, i have another 8 hundred and 65 close to 3 thousand signatures of our members back behind the ones you've heard opposing the hedge fund allocations we'd like submit those and hope you'll consider well, today, i hope we hear a lot of comments today that actually have a career point of view by the way after all of there must be so. >> (clapping.) good afternoon. my name is a terry.org i work to the san francisco public health as a

coordinator i've worked for the san francisco over 40 years and member of local 21 i'm a member of 21 pension advisory committee that is past making recommendations on behalf of the members to this prosecuted we've done research and unanimously recommended a 10 percent investment in hedge fund we urge you to support this vote today local 21 really took a finding out thoughtful fact full approach to make a determination on behalf of our members we support listening and engaging in complex matter and the experts building the allocations will protect the fund in a down turn we recognize that are concerned but building this board listens to its experts and

makes prudent decisions and the fund will continue to recover from the 2008 downturn i thank you. >> (clapping). >> hello claire welcome. >> hello, i was going to wait by after the last comment i need to speak i'm representing the retirees we had our meeting this morning and our position has not changed it was interesting one of our members that attended today said she's moving to fresno she can't food san francisco she's been priced out of her home and has to move to fresno where she's found anywhere affordable lodging

she'll be able to get her pension and live in fresno and for those of you who knows fresno she compared it to hell s of you who live in the central valley and understood part of what you're hearing today is really the vast majority of men's have been advising you this is not a prudent approach to take i think you should be pressed with the fact so many of our members and members of your system has done their due diligence and educated themselves to the issue because many quoted experts and obviously have done their research i read over the packet and concerned with the for a second i don't believe that due diligence has been made with regards to the information any stack thas has grown from the information from june and i see

no opposition information the only one i've heard that ever spoke about the dangers of hedge funds that presented a balanced approach is commissioner melberger all the material is only focused in one direction we must invest in hedge funds it is curious to me even the former organization i have friends as the uc it is now reducing it's equities portfolio and it's been reduced because of the excess fees and too many securities that were not performing well yank if that's an issue it is interesting that that is

happening soon after he leafs our funds are at 3 percent your percentage will go lower and not pot as well funded as we were before i urge you again to listen to the members the vast majority of members that bothered to come here for the first time and spoken and have consistently done it since june. >> time. >> if you're members are that interested in the issues before the board you should takes a look at and listens to them thank you very much (clapping.) >> thank you. >> thank you, mr. president, and board members i want to thank you for taking the time and emergency it's taken to get through this matter i've come before you sefrmentsdz asking for continuance to get more information we've metro several of you and talked to our own members that work with the retirement staff as well as the

staff managers and this is not an easy decision we pulled together an citizens advisory committee we had consisting of members that are supportive and opted and had a robust discussion and asked difficult questions about the assuring the ideals and that advisory committee made a unanimous decision to support at this time 10 percent of the lowest percent that staff recommended we precede and i stand before you to you urge the board to act on the advice of experts local 21 digs in deep on the details we but we believe that would the premise of prop c the promise

made to active employees this board needs to make you prudent investments that will reduce the contributions of active members they currently pay one of the highest rates for the retention but begin to move that contribution waiting rate down to protect against a down turn i think one of the riskiest things to not change strategies and go through other strategy like 2008 we need to protect ourselves and comment i believe that all of you received a letter signed by the unions with po a and m e a and others irregularly you to support staff and experts and do the right thing with this vote today thank you very much

(clapping.) thank you. >> hi good afternoon. i'm margaret a member of the s c i u-1021 and member of the fossil free san francisco if my notes are correct i'm not the 37th speaker today thirty of whom have spoken clearly against hedge fund against investments in hedge funds i will remind you zero so fossil free san francisco is composed of people like myself in this system people have relatives in the system and people that care about our future that is what opted i i take it up i us your strong beliefs that fossil fuels are killing us this is what this pension fund is involved in we want to get our pension fund out of if you voted for any part of

the hedge funds you're voting against our commitment to the disadvantage that is down to the planet you will vote to divest from took hedge funds by their nature are not transparent hedge funds will contradict directly the comments you've made for social investment and make the devest impossible in the future you're going definition our own recommendations i'll remind you i believe when come backer spoke in the beginning of the journey said that under 15 percent of hedge funds is not worth it how do you justify 10 percent how do you justify 57 percent or anything you're opening the door to a process that thirty of us today are really opted to and 30

thirty of us who represent clearly the majority of city acres the retirees was have you heard so many passionate pleas for your responsibility you've been very patient listening to us thank you for that many of my coworkers had to leave because they're working but many are staying to the bitter end of the month to month we want you all to explain where you would put any money into an unwise have you ever known there are clearly all of the. >> 30 seconds. >> we'll be here to hear our decision we're not going away we have our calendars marked every month for this meeting thank you (clapping.) >> if no other public comment i'll close public comment and

call item 2. >> item 2 an action item approve the minutes of january 14th retirement board meeting. >> is there a motion of adoption. >> i'll move. >> open up for public comment on item 2 seeing none, public comment is closed. jake and i'll pout one amendment that staff proposed in a memo from norm a clarification of the ownership within the deferred manager's report it should be in a packet before you that's in a memo form from norman. >> okay. i'll give you a moment to review it. >> i'll read it to it is clarifying that well karen's statement. >> it is just clarifying any statement at the board meeting the draft minutes are number one changed in the target date fund

with the cap manager they reduce the number of merchandise from 6 to one we're proposing we make it clear the ownership of q m a by having this instead to replace the recent change in the small cap value fund prudential reduce the number from 6 to one manager per q m a a subcy of the management that's what we discussed in the board meeting. >> do you accept that. >> yes. >> thank you. >> on the page 5 of 23 this is i'd like this is stated as follows: can you hear me okay - >> just want to clarify page 5

states commissioner melberger noticed the comments on hedge funds shouldn't exclude - i state i preferred a fund to funds i stated the marines why that is i did not trust staff to be able to do the job and the commissioner stated that was micro managing i want to make that clear it is not micro misrepresenting but a policy decide so no member of the board should be criticized one more time i'd like that to be restated commissioner melberger noted his comments related to a fund to fund so a direct approach that's number one number this had been page 9 of 23 this is a second photograph from the bottom it states in

reference to a question from commissioner cohen commissioner melberger stampeded not to rule out consolidates that is false when i said i wouldn't rule out pca the pension consultants i did the due diligence and met all the rfps and felt they were one of the strongest candidates and that's the reason i wanted them computed in the search with those two amendments i'll delighted to reamend. >> is that a second. >> i will open up for public comment seeing none, public comment is closed all in favor, say i. >> i. >> passes unanimously thank you call the next item. >> 3 action stem on the consent calendar. >> a motion of adoption unless someone times to pull off any

items great what's the will of the group? move to adopt the consent calendar >> is there a second to that. >> i'll second. >> open up for public comment on adaptation of the consent calendar seeing none, public comment is closed. all in favor, say i. >> i. >> passes unanimously thank you next item, please. >> item 4 action item staff due diligence report an 2015 as an asset allocation proposal. >> good afternoon mr. cokeer we'll accept it would you like to add comments. >> wanting maybe one or two quick comments. >> some of the things you see on paper is the staff and we've got multiple multiple meetings

together with art in the private equity team as well as how much we can invest in real assets and the private equities over the next 3 to 5 years and the mature thoughts or individual thoughts on whether or not to petition the real assets into multiple assets there were multiply meeting. >> thank you on up to the commission if there's a direction we should go on the allocation if you want to put it forward in the form of a motion we can do that. >> i'll move we adapt staff's recommendation. >> polluting please turn on the mike. >> i ask we adapt staff's recommendation and a at the 5

percent allocation as present. >> is there a second to that? >> i'll second. >> great discussion on the motion? >> yes. question on the motion staff recommendation for the 5 percent allocations is absolutely u absolute allocation is that direct. >> my motion to take staffs recommendation and not con streetscape it to the direct fund at this point there is more work to be done as we get the structure in place it includes staff and consultants we can evaluate the combination of one or the other. >> i do want clarity does it

mean that staff comes back prior to making the investments come back to the board to propose whatever percent or a giving the staff the authority to go 5 percent directly or are they come back prior to those decisions. >> commissioner stansbury said - >> i think i said it was listed in the materials of what. >> commissioners. >> i thought it was litigating listed i'm asking for clarity. >> yeah. for clarity. >> that should be district to staff. >> supervisors are you asking staff or commissioner stansbury will the nature of the motion. >> okay. >> so that if the question is for me, the intent of the motion

is to allow staff to read missouri move forward to get the resources in place but before that any investment represents this could be a lot more discussions about after all this i think that to consider one or the other where no infrastructure is in place several i think it maybe mr. coke erica address that how to proceed. >> if the board were to approve the 5 percent allocation not fund to fund or direct what we'll do is issue an rfp for a specialist consultant to be broad and on so exclude the fund to fund and the speciality so it is on. >> on mandate. >> which means come back california come in and back to the board; is that correct?

>> yes. >> yeah. the hiring of the hedge funds consultant will be the same process that the board takes in hiring all their investment consultants that is a decision or recommendation brought back before the board to have a chance to interview or have a discussion before they voted. >> thank you. >> and if we don't have the infrastructure my concern if the infrastructure and if we don't have the infrastructure in place meaning the infrastructure operations employees and staff and/or the right consultants to manage it is not prudent to move forward i want to insure we don't move forward without the process. >> we'll bring back the recommendation of the strategy to the board and you can measure whether or not in fact we've built the monitoring of the

investment once we place the money. >> i have a few questions based on i think this is you've asked us to be interactive so actually ask staff to address some of the points you've highlighted so i'm going to do that for you and start with a couple of questions first one of the people spoke said 3 hedge funds can't be tracked and i would be opposed to hedge fund if they can't be tracked so don't you address the transparency issue with hedge funds because if we didn't have transparency i would have a problem with this. >> transparent is much different than that was six or seven years ago clients can

certificate on the transparent that's one of the standards of a few places to do that so that's one option second that the hedge fund manages provide their thoeldz a risk agree variety and there are a a number of them available risk eric mar are a large one. >> was this an issue in 2008 that many plants didn't have that transparent. >> i would say that's the case. >> a risk masking provides that information. >> in the past several years that's a second a third is that for a manager

rather than provide their holdings to a risk agreeing have a right to provide their factor x sewers while we ned get our holders practically speaking what do we do with that we're interested in because the plan is to very well devised when you put many managers together we want to know your for about exposures and managers understand that the landscape it changing relative to six or seven years ago they want to be helpful if that's an easy signal if you have a manager that won't provide transparency.

>> second point. >> and i may. >> yeah. >> do you have anything to add. >> your loose point transparent should be very vigilant criteria in this fund to fund process. >> she didn't have the milk on. >> i'm not used to this new system i said it is absolutely a case in our exclusive that transparency levels of transparent with hedge funds should be a significant criteria in due diligence and manages that are not willing to share positions level information at some predictcy shouldn't be considered and portfolio like yours should be able to ask for and get significant levels of transparency.

>> that's one important criteria that i think myself and most of the commissioners will want and the next thing this is brought out by two individuals one is one the individuals that spoke i think he's left - they said that i had said that what i want to make sure there are good hedge fund and bad hedge funds we want to make sure in performs and transcripts and the issues you all read about we don't want to be stuck in a better known new madoff hedge funds just like bad real estate managers they're there i think we've chosen ones that are forced but they may not be the top all the time we want

to try to get into the top level of managers and that's our goal so if we're going to do this program your goal to find the 25 percent it is at least tape managers we want to be in the top 5 so as commissioner melberger said shallow so small business said out there it was not a good point to make i think that most people will agree it's a good point and one of the speakers john ferry land that that exact point we should have that goal in everything we do and i would like you to address mr. cokeer the fact that someone said you wouldn't talk

to cal percent will you address that point. >> yeah. i'll begin meeting with the gentleman that ran the cal percent program in 2005 i will talk with him until i met on site i met with him. >> wait, wait you met him on site and a started that in 2005. >> yeah. >> i'm curious why someone said they've never met with cal percent. >> can i continue so we would talk you know for half a day on two occasions we'd talk with him about once a year and he's no longer there when we i'd to say i started in

february i believe it was march that i met here in our offices with a member of their hedge fund team and talked with him a couple of hours we effort intended through everything this was a long meeting and since then we've talked by phone a couple of times more recently is that i did reach out to the gentleman and heard back from him a week and a half ago i would like to say pubically i'm appreciative that a man that has as much time demands was gracious to talk with me about thirty minutes at the beginning of his conversation he asked for confidentiality about the specification of