mack in a short period of time. never excel files without sounding loans. i think about 90% of them are below market rate which you are not going to a very good rate of return on investment. i, for one, do not like this press release with all due respect, commissioner cohen, because it is a slap in my face. i do not earn half of 175% a.m. i. and i want my money the paying dearly into that retirement fund to be used for ghosted by market rehousing. you have a big problem on your hands of terms and conditions being negotiated with the mayor's office because the voters in 2012 they have -- sole

discretion over that entire housing trust fund. how are you going to get -- to give you any kind of latitude about sole discretion? hartigan and negotiate that in your terms and conditions? >> time >> i look forward to mr. -- my last article about the sorry state of cds. you should not be making an investment in them at all period. >> the sylvia. this sylvia. >> i hope pres. cohen is of course a person say this press release was premature in accurate should be withdrawn.

for the following reasons: you see a lot of people there that cannot even qualify most of the -- 1021 members retirees for the program. you are right. this is the middle-class business book not for us. why should i give my -- disaccharides 27 years gone without sort of something so not homeless and out him and give those funds to the middle-class? i am not even the passage outrageous that even the mayor in his -- is good run unopposed at this point and if he wants to become a progressive mayor and all of a sudden become because of the mission crisis, the person is going to champion affordable housing, you know that ship has sailed since 1990. this is been a crisis in the making since then. now to have us bail the inefficient bureaucracy that is in san francisco now and since 1990, and were to be sacrificed, were to be the sacrificial lamb without any statistical reports for mr. shaw. now you are

putting him, rj, in his quest to do his job, his saying he can meet the jedi deadline that i am sorry jay, i do like you but that is unreasonable back not in this type of scope and severity of what happened this type of investment mack i agree with you mr. driscoll, believe it or not, that this may not be the way to go. i firmly believe that this type of investment should be given -- give the opportunity to wrong, late the developers. we give larry ellison and proud playground which run all four for 11 nine dollars of it his -- could have a yacht race. give google given opportunity to twitter back have them give you the millions of dollars. have the mayor asked him for 150 were 300 million but please do not ask the plan participants who cannot even qualify for this type of housing

and have us foot the bill. so, please reconsider this. this i think is the man's quest to be the progressive mayor -- i am sorry that no one is buying it. >> my emotional reaction to this first. okay, i would approve of dipping into our pension funds provided we get a 4% return on our investment in you put up at least housing collateral. to use firefighter language by this proposal should be hosed down. now i find what is really remarkable mothers absence of documents. is no documentation regarding this proposal. there is no indication of what the interest would be on the investment and i believe during the last year, there was so much concern about

the pension fund solvency. this could really -- the solvency of the pension fund why are you raising the pension fund? this is just the beginning that you start doing this for the future rates. this is opening the doors. you cannot do this. now, as previous speaker said, though too long, we go to the developers who are raising the city right now. they should be coughing it up. the other concern is that this is really doing a disservice to workers, to the city the retirees and also the public. because when you start raising the funds and then it underperforms, during times of recession and there is concerns about recession because that is why the hedge fund came up to begin with.

you really can be putting the city at risk. this is a lousy proposal. you get the money from the right sources for housing and really close this down to use the fire by her language. this is really a atrocious was being recommended. thank you. >> ms. cohen glad you backtrack >> i did not backtrack >> were reinterpreted the specialist because when i saw those in outrage. it was a done deal. there were really no information and no documents here. to me it is very typical of this -- and all housing thing is out of control. everybody that lives here should know that or even if you read the papers. call here in san francisco, and had been to a lot of meetings in city hall and outside of city hall is for affordable housing. at 100 and

whatever 50 or 75% of ami is not for people that -- is for people that make much more than the medium which is like for one person, it 71,000 a year. that means, and for three people it is 90,000 a year. that means that 50% of san francisco makes less than that and he wants to go way up in market rates. people are screaming about luxury and mercury housing in san francisco. then there is this other part we are coming to the members of this plan, not letting anything and in truth, why should we subsidize the mayor's mistake? he has made huge mistakes in the city are all paying the cost of it

especially those people that rent. people on low income, retirees, and the commission district is only one sign of it. if anything is to be done, and if you do your due diligence, and i honestly think it is the market event stable because everything is priced way up it does not mean it is a good deal. it is unstable that it could go down they could go anywhere people getting more and more angry at what is happening here back if you do due diligence finally and can keep it under the 100% median range and give the members of this plan a chance to buy those -- to get those loans, that might be a different story. even then i think it is a terrible bad investment. i call the mayor's office of housing. been very very persistent about this and i keep looking at the charts and i could probably quote more than you would want to hear, but they said the person the executive director of the mayor's office of housing said the yield would be about 10%. that was last month that it may change because the percentage

is only 3% that was two months ago pr so, i really do not know how to interpret all this but honestly i was getting maybe affordable for some housing would be a good investment, but at this time nothing. it is very unstable. >> thank you.. i believe the next speaker will be ms. claire -- claire van ski. are you speaking? >> i thought to there was a longer list ahead of me. i just want to make a few specific points. one is that this commissioner mike >>[reading] said was etc. annual lunch and this topic came up. i did point out to our members that we do not know the specifics in the details, but when just the discussion this came up, the groans and human cries from the membership those present was very significant to their very very upset as retirees that any

part of the pension fund would be at such high risk. i would suggest to you that probably the return on this do not need the basics of your investment policy. but we do not know because we have not seen the details. i am wondering, since before he moved up to the 644 meetings, there was discussion of previous meetings about sf ers getting known building were purchasing or modeling remodeling the building as i look at properties around us here being taken over and bought and sold and remodeled and being worked on, and i have heard nothing at the meetings. i have tried to attend every meeting you i do not think i have missed one. i am waiting to hear that report from the

staff do due diligence on that effort, and there has been nothing. so i am puzzled. you are going to do all this and have a total report ready for the july meeting and i have been waiting more than six months to hear what is going on their own building purchase or remodel. so i have my doubts about how that is going to actually come to fruition. the risk for this kind of for mortgages and such as brought up by several commissioners, commissioners stansberry, commissioner mike >>[reading] commissioner paskin-jordan commissioner driscoll, dissolve very high risk and long-term return propositions when you cut into mortgages. i think we acted too much more detail on that in my last comment besides the fact that retirees are in a panic active members, not so long ago that i was an active employee, and after proposition c initiatives high percentages going up with regard to contributions to our funds, and a high-risk investment like this, if there

is a problem with the fund, is the active employee that are going to pay first and foremost before the general fund is capped and those active employees who cannot -- none of us can qualify any these loans i can tell you right now for market housing that are barely staying in our homes back those active employees who cannot qualify are going to pay the highest cost and the cost contributions to the retirement system are going to go up this proportionately mike i think is much more on this program and we have to take a harder look, but again, i do not think it needs major basic investment policy guidelines and standards. thank you. >> thank you very much. >> one comment. >> sure >> i think were good to go real good due diligence to this. one of the things about mortgages is there really risky mortgages and there are some

that are much safer than their different tranches of mortgages that i think that is imperative for staff to dig and in understand what mortgages are and if there is any assurances or neither agencies that will provide some of the lower risk to the actual security that will be brought back today, and her own portfolio to own mortgages not just depends on the risk of them the same analysis we make for any other investment. so, i have faith our staff will come back to us a lot of information and will do the real hard due diligence on this. >> thank you. >> to questions we should not hold commissioner cohen accountable within especially smit she is in she did not write a contract [inaudible] >> we can be flexible and happy to work with staff to figure out what the best possible date is it that make

sense. >> this july issue [inaudible] i am not sure. is more questions regarding the college work has to be done. i am just curious, mr. -- did you put the item on the agenda? >> [inaudible] >> thank you for your feedback out for to the ongoing discussion or if we need more time will have more time to do our due diligence. i think is one point i did want to correct that ms. sylvia brought up in that she made a little bit of an error in assuming that the program would expend expand eligibility and cover families. at 175 ami and that is incorrect that is the level. in the spirit of this in san francisco we are doing a job --

were committed to building both the low income housing is also middle income housing. we need to make sure we are providing housing options for all income levels. so, i heard your concerns saying that you are not interested investment firm luxury high-end and i agree with you that is exactly what were not looking to do. so, we share that value. so, i am going to move on now. we have heard public comment public comment is closed but it it next to please call the next item back >> let us take a 5 min. break. 5 min. break that we will resume back at 4:14 pm.

>>[recess] just to recap we finish our-- i would ask the clerk to read the next item. >>item number 15, discussion item mr. coker >> thank you, norm pres.: other any questions? >> on teasing. on the clickable brief comments. the charge of the narrative, first a return for the 11th month ended, on the pedestrian side. 4.4% equity market is up about three. fixed dose the private

markets have done well to item number two, gdp growth. unsurprised to the downside however on the other hand the jobs report, just released last week was particularly strong. so, given there is a strong -- one would think the decline in gdp is just an anomaly. it could be related to strong for quarter performance last year. this kind of a gap, we get a couple of closures in terms of items that the board previously approved in closed session that were closed. here most recently, the tickly shoreline was one could we ask for 25 million to closed at 22.5 million. the founder of shoreline, fixed income strategy in china, the managing director and founder benjamin -- ben is going to be speaking to the board at the investment committee meeting on july 1. is one of four guests at the ic

meeting. the second is -- we asked for 25 million and we did get that they are that close surely after last month's board meeting. tow ship the asked for 25 million we also got that and actually closed before last month's board meeting goes on may 1. we did not report it to the board because we do not have final documents showing verification of the closure, so we elected to wait until we knew it was, in fact closed. moving on to item number six, -- the joy still in the audience with us today. and would join as three and half weeks ago we did extend an offer yesterday to somebody to manage our senior portfolio manager public equity but she has got a terrific background. she works for a large outsourced and highly respected outsourced cio firm with a pedigree there is the chairman and existing cio at that

organization are both served previously as cios are stanford university.so she is great pedigree. she also previously worked for the federal reserve early in her career and she has got almost 20 years experience but she starts with us on july 6. we had completed final interviews for real assets. we are focusing a couple of people they are. the deal on number seven is that sometime soon is that there could be a considerable increase in the number of securities upwards of hundreds. that could be approved by -- to be included in traditional entities these are -- that are currently available only in local markets, china has continued to make in the securities more available to a wider array of

foreign investors and to the degree that they do, the -- has signaled if they meet certain stipulations that they will be included in our traditional indices. it is a big deal but china is becoming more and more the transparence and more more of an open market to foreign investors. item number eight is that we are traveling as a team bob younis as an eye to hong kong and were there to meet with private equity, private debt as was public equity managers. the last is that the update on the hedge fund consultant is that we expect that the contract with an adc will be done with hopefully in a matter of about two weeks. we have a job description awaiting approval from the mayor's office. the

manning managing her doctor. once those things, things like that are done it will be the beginning move forward on the return initiative. so, without altering over to norm and asked if there is any questions or comments. >> thank you. i know you must have questions. no? >> know that among the spot i lost my train of thought. >> i understand the rfps and hiring surges in traveling with her managers investments getting very busy. however, this goes back to the point of try to raise with [inaudible] about the effective [inaudible]. to be the third page of your report. the

private equity shows 11.6 and -- 10.7 pick counting the dry powder though which are numbers at the bottom is 21.7 and 15.9. again, no we have to dry powder is will never get there but when you go back and look at the equity exposure most everyone was above target. the question then is if the market needs repricing, there has been some i was a deliberate or indirect -- doing a lot of work traveling but you have to watch the asset allocation if you think the market price is too high. so, that is more of a statement than a question i am just wondering are you monitoring these numbers? >> we worry about risk, all the time. have made a number of comments over the past year

that are not yet bearish on risk assets. i am becoming more concerned than i had been in reason for that is, where we stand in terms of interest-rate cycle and some complacency in the market about the price of risk assets. agree with tory codes comment that there appears to be a lot of significant chasing of returns, and this is hard because we are in a low yield market, so we either need to do one of two things to earn our return back we either need to take more risk or we need to take risk more efficiently. we are going to go gangbusters to do item number two in new jersey a lot of ideas coming forth in the next six months or so. any pc has been a thought leader in

terms of how to increase yield and to seek risk more efficiently or to seek return more efficiently than simply taking more risk. >> some of these numbers look a little more the denominator [inaudible] but again, that a significant if we have so much dry powder and rapid pace of trying to make commitments to ship the private equity and private real estate numbers are lower for a couple of reasons that one is the rallying public equity. the second is because of the distributions in private equity and private real estate and 30s, capital stock being called. to ship where are you parking capital? >> rainouts in public equity. >> thank you. >> i do not expect it it is going to be there in six months. >> on that note, we spent a lot of time last year talking

about asset allocation and where to put money. the board voted to reallocate dollars among different categories different assets, and that was i believe, february timeframe. february. here we are in june pushing into july. in terms of getting the job description that for the mayor's office for you said a managing director of alternatives -- absolute return thank you excuse me i miss spoke with her, that looks like on that.honestly we voted to put money in that category and we cannot quite execute on that once we have someone to lead this. >> we completed the disk job description within a couple days after the board meeting in february. i do not know that -- other than that i can -- the

rest of the process i wait for her to return to me to execute. >> i was a the timeframe is, as i have indicated to board members before, by june 30 we believe we will have the position approved in a new structure that will allow us to provide to proceed to higher. >> that is great i received a something for me, in terms of priorities is right at the top the list because i think in terms of actions that we can take to protect or insight portfolio from shocks i believe that is one of them that i look forward to this whole process being completed. if there is anything anyways can do to help let us know. >> commissioner stansberry >> we appreciate the offer. will call you when we believe that it will be helpful, but it is a high priority -- not necessarily our highest priority but if i party of the board and were doing the best we can to get this done. >> commissioner driscoll and stansberry regarding questions

about risk were not sitting still. we are looking for unique and niche ideas how to increase income and where that has led us to the two long-term strategies that we invested in, the china fixed income strategy that we invested in the last month we have another one that were going to be recommending in closed session that so we are looking for ways to look through the private market, investing income oriented strategies were begetter higher yield and really get traditional public fixed income strategies and we have a shallower j curve that we have some liquidity who we think can absorb more liquidy than we currently have. >> any other further discussion on this report? no? the state public comments. on the report. seeing none, public comment is closed.

please, next item. >> discussion item for composition manager report ms. burnett >> good afternoon commissioner scott bordick deputies either directive in georgia for composition manager. you have before you the monthly activity report. rapid it take any questions back there will be a committee meeting next wednesday the 17th beginning at a special time 2 pm. >> i will state before the budget committee this morning and we are sort of finalizing the evidence in the deferred comp program and between may of 2014 and may of this year is increased active participants by over 1400 folks just significant when the total active contributors are 15,000 anything more significant in that it is a voluntary program and they are still a high level of cost sharing on the pension side, so i was in preparing

this material was happy to see that and wanted to report that out back we do not often see a one-year comparison that added over 1400 active contributors. it significant, i believe mack >> on our deferred competition committee meeting just to give you heads up on debbie sql 2 things. first is for those with gilmore get it has been several months since we past the change. had we designed away or come up with a way to target those people of gilmore get that to let them know there has been a change? is the question on checkmate checklist related to that? also, how are we going to market the hormone portion of the ford comp if in fact we are going to market it? those are three things on their bring next week at the meeting. i just want to give you a heads-up. >> seen this no further

discussion i would like to open this up to public comments. public comment is closed. please call the next item not to ship item 17 grievously continued >> thank you. >> item item action item declaration of vacancy on the board and adoption of election procedures and timelines. >> as the elected members terms are staggered, commissioner driscoll's five-year term will terminate separate 20 2016, so we need to according to the timeline administrative code declare of vacancy. we asked the board to approve the declaration of a vacancy in that position that we provided you a timeline as well as the materials that are distributed to conduct an election for the seat him and i would be happy to answer any questions about this from any board member. >>