like alternative investments, you shouldn't invest in alternative fuels, just because you all. you should invest them if they're a good investment. for the past 10 years, alternative investments have had the same poor performance records as hedge funds, believe it or not. so everybody likes, i should imagine likes chocolate. just because you like chocolate doesn't mean you should invest in the chocolate factory if it's going to go bankrupt or invest in lowry tail. it's your responsibility to invest in investments that are going as a good retain as good as the s&p 500. for past 10 years, most people have lost money in alternative investments than made. 10 people have made money and have lost money in alternative investments than anything else.

my recommendation is that you only ininvestor in alternative investments if it's good investments and it can equal the s&p 500 or better. >> thank you. >> are there any other members of the public that would like to address the commission on this item? >> seeing none we'll close public comment. >> this is generation, right. and it is a equity, public equity stock portfolio. 100%. >> yes. >> ok. i just want to make sure. the word alternative, i never heard it. >> it's not just a stable energy. >> we're ready for next item. or a vote. >> thank you. we're given everyone a chance to

ex ought the questions. can we take with without objection. >> item passes. >> item number 9. this is an emerging market public equity strategy. it's a strategy that we have both known for a number of years. curt, do you want to introduce it? >> sure. staff is recommending a commitment of up to $300 million which managing a concentrated emerging market strategy. it was founded in 2008 by a team of former i.f.c. or international finance corporation executives. i.f.c. is the private sector of the world bank. they combine a top-down country analysis with bottom up company analysis. upscaling is that they are a primarily women-owned business. they have a activist and e.s.g.

element to which they evaluate companies. so we'll turn it over to discuss. >> thank you. >> just for a little background this came through our rrsc we issued last year. we issued an r.s.p. of may of 2017. we received 100 strategy submissions from about 16 managers. only 30 strategies from 23 managers actual low met the minimum qualifications and staff have been focusing on these strategies over the last few months. cart ka met the qualification and it's the one we're recommending today. it truly has a unique approach to they engage with management

to unlock value and they partner with their portfolio and the part foal is concentrated and it has 15 to 25 position and their fronts starts with top down trove and they first led countries with positive tail winds so they're looking and researching economic data, political development and currency trends. today, they are constructive in over weight on india, mexico and the philippines. they have no exposure to china where they feel that engaging with company management can be challenging. the next approach after the top down is selecting companies. they are working to invest in industry leaders with strong competitive advantages, quality management teams and strong financials. they will not invest in a company without meeting the management team first and they need to know the management team will be open to engagement with cartica and willing to implement reform.

the final step is the portfolio construction. the investment committee makes all the investments toll buy and sell. the vote has to be unanimous. the track record for cartica is strong, over the long-term. over the last seven years, they beat their benchmark annualized net by a couple hundred basis points. we do note the last couple of years have been challenging for cartica. in 2016, they under performed their benchmark by more than 500 basis points. we note the portfolio was over weight india and mexico. if you remember in late 2016, there was a demodernization in india that really hit equity markets. it was a short term impact. the markets recovered nicely in 2017. it was a positive policy reform that should help the economy and the markets in the long run. the second hit was mexico. they're over weight in next coast after the trump election, the peso investments in mexico

really got hit. they have also recovered from 2017. these issues are unexpected macro issues and they have nothing to do with the quality and the fundamentals of their underlying companies and as i mentioned these issues resolve themselves in 2017. in 2017. cartica was up 26% and the benchmark up 38%. absolute returns were very impressive and they did trail their benchmark by a couple hundred basis points. we still view this performance in 2017 as very solid. it highlights cartica's investment discipline in their conviction in their holdings. we would know cartica has no exposure to china. china is the largest country in e.m., they represent 30% of the benchmark and return in 2017 for china were up 50%. so it is impressive that cartica puts in strong returns without

having exposure to china. in conclusion we recommend investment of up to 300 million in cartica. the active ownership is unique. the team has significant experience in the industry and the two female founders came from the i.f.c. and they each have 30 years or more of experience each. in addition to the returns, cartica's portfolio is different. they have a 98% active share relative to the benchmark helping diversify san francisco's portfolio. they have no exposure to china and they're under weight. they focus more on consumers, industrial and materials. these exposures would be complimentary to our portfolio. >> i have a question. >> you mention they were up 89% versus 19. >> i think it's really gets to brian's point that you know, they are start up and they come

right out of -- they have the huge year and it effects all the rolling numbers and you lock at other returns. >> seven year which does include that first year. the first year was mainly a drawdown vehicle. so it was calper's money. >> they're a merging. >> they helped -- they recruited teresa and frieda to start this lifting them out of the i.f.c. they said this is a great strategy, there's a market for this and please bring it to market and we'll be your seed invest or just call capital when you have investments to make. russell reed did that. >> did they get rights for that and reduced fees and on any ownership? >> they did get ownership. it was part of their activist portfolio. they have since gotten rid of their activist portfolio and the only managers that they retain in the activist portfolio is

cartica. >> but they still have ownership. >> they did have ownership but they realized a few years ago that there are a lot of conflicts. when you have ownership of a company, and you are under performing it's hard to terminate that relationship. so a few years ago they sold their ownership. >> i didn't see that in the material. any of that information. this is important information. >> it really is. >> sure, all right. >> i mentioned that their initial investment was calpers. >> this did come through the search process. it's not a manager we previously knew. we did do on side due diligence. tim on connal visited with them and we summarize our views but they would echo hans. the founding partners, i don't care whether they're women or not, they worked at the i.f.c. when you work at the i.f.c. you

do on site company visits to people to whom you are lending a lot of money. they know the markets, they know emerging markets and the companies and they're able to implement a strategy. they don't just buy a company and hope it goes up. they buy the company and help the company develop better business practices which not only helps the company do better, but it detracts other investors to the company and so they influence the governance of companies in a constructive way which is improved returns. you will see we did have that same concern, you did that their initial returns were spectacular. don't look as well recently. we do think that the way they go about their business is a very value-added approach, the seniority of the senior individuals of the firm is compelling. and that the strategy we think makes sense going forward. it also has the nice aspect that hans mentioned that it

compliments your other managers because you will never get good governance -- i should not say never. it's hard to get governance in a communist company so they don't invest in china so they compliment the rest of your emerging portfolio in that respect. >> you are not worried about the size? >> we are worried about the size. we think it's manageable. we do suggest that is a concern. they don't have a lot of names and liquidity to be an issue but we think it's manageable versus the other positives. >> so do you think it changes the standard deviation if there's a real run for the market in that world and they have concentration. >> as you see, liquidity is an issue. we are concerned that a big other person could pull out and it could effect them. you see our comments there. i won't sugar coat that. we have that concern. but when we balance the other positives, other than to watch

those couple of things, we would still be supportive of the recommendation. >> when i'm looking, i'm looking at 217, ok, they're ok. 2016, kind of a big lag, 2015 they made up a little bit but slack for those years, maybe a little lagging. as they get larger, bigger. >> that's right. >> the environmental factors that explain that as well so you do have to separate those. but yeah, that is a concern. >> is that your biggest concern. >> yes. >> we do think india, for the first time in quite a while, has tail winds that they have not had. i usually prefer managers that invest in great businesses but this is an exception. that that the top down starts with their process and it's very, very fundamental and deep to their process. the reason why this is an exception is that frida and teresa, 21 and 25 years respectively at the i.f.c.

they have some amazing macro experiences, as well as bottom up experience. frida is a stream of consciousness. she has an amazing capacity for volume of data in her mind. we think that when we burrow into the returns we find sat factory results. we have highlighted india, mexico. we think that there are some headwinds in terms that have led to some of the numbers and the returns in 2017, china was a big part of that and they don't invest in china which is a good compliment which is a good investment in our portfolio. >> i can't emphasize what bill said about the experience of these people. when you hire a lawyer, they ask do you want someone who knows the law or who knows the judge. when you take that into the

investment world, you have people that know how to invest but they've also got contacts at senior officials in these various countries which they developed as part of their i.n.c. experience which is very helpful when you are investing in those kinds of markets. to know the back grounds and the regulators and the general climate of the country. >> how do you feel about our sizing of the 300 million? i really like the idea we're moving to larger sizes and not have hundreds of investments but because we look like an index fund when we do that. i like that we're making the best of the people we love. it's just we have to be much more sure. the size of this is large and for you, as a consultant, are you comfortable with that? >> you get concerned about the size. the bandwidth of the staff to follow it and i think we're

comfortable with that size of it. the size of the commitment out of the total fund, is the high side of what we would generally be comfortable with but again they've been around a long time and they've had large investors in them and that tends to mitigate that concern for us. but it's a large chunk of their total assets. >> it's still 1.2% of our planned assets. and so that means any single company is about 12 basis points. >> yeah, i'm just -- i just get worried about that you get in this time at the end of their -- and you start just getting mundane returns from them because they're so big. i understand where you are going. i'd like to see maybe a little more of us doing at some point, something more emerging and when they're younger in the cycle when you know, we have that ability to get that great return, and combine that.

late they've been around this many years and they're at the very end of their capacity is always harder. >> this is a much better improvement than what we have usually in our public equity portfolio which is managers that have many tens of billions of dollars. this has three. the strategy you discussed which was public equity it has less than 2 billion and this would be among the very smallest that we have. >> but you are emerging and it's more liquid and you know, that is small to mid or you know. you are in a different world here. i just want to be cognisant of that. >> i understand. >> commissioner driscoll. >> mr. martin, on page 9 of your report/recommendation, the top market return market capture are

those based on the seven year or five year number? i cannot determine that? >> the seven. >> i don't see where it's written anywhere. >> it is not. >> there's some places you can tell. >> usually it is labeled that one is not but it is seven. >> they are the rolling periods just below that. >> i am not sure what you just said. >> i'm saying the other charts are obvious where it says the rolling 12 periods below it those are the three-year rolling for those periods and then upon subsequent pages you see individual years that are. >> because the scattered diagram on the bottom of page 10, this indicate whether or not that bullet point highlighting them includes their first year.

>> yeah. my issue is about the performance numbers. maybe you dropped out the 9% return in the -- 89% in the 14th. they did it with $200 million and now they're running north of 10 billion. 10 times more the size of that. they wanted to engage in it because they got great political connections and real-world good experience. they're going to stay concentrated the 20 to 25 holdings. they're going to be as nimble. which is more representative. they're five-year numbers because 2012 they were just at $600 million. the five number is an indicator of what their performance will be like. i don't mind paying high fees but paying a one plus o 20? 20, no thanks. >> it's a concentrated cost more and where you have their analyst following far fewer names they charge higher fees because they need to do that to maintain the

number of people to follow the strategies. >> and they've just been walked through the generation analysis which we just supported much easier because the spreads were higher. do you want to look the same way i just did. like i sid. no thanks. sorry for all the hard work. you never stop working but still, i have to tell you that. any questions or comments? >> let me ask you, what is really the best benchmark for this. >> for cartica? >> it's an emerging market manager so an emerging market index is a better benchmark. >> i understand that but which benchmark? >> well, on page 13, it would be the emerging market index. i do think a broad index is an appropriate index. their style is more value oriented and less growth oriented. if you were to compare them to a

sub benchmark, the msci value benchmark their numbers would look better. >> that's the reason i ask the question right because in your write-up they say it's place for great value, right, value oriented investors. but you compare it to the msci emerging markets and i'm just, that's why i'm sort of grappling what is actually the better comparison here, right. >> i think it's a selection because you could chose a growth manager or a value manager and over longer periods of time, the more neutral intext makes more sense. i think the differrations between value and growth and emerging is a little bit harder to do. but if you want to understand their styles to bill's point they are a value-oriented manager and so the comparison group for them should be managers that were more value which would mean how are they doing against comment pet tours? it's the value oriented index that is better. should you hire them is the longer term index because styles

come and go and so over the longer term, the neutral index is probably as useful as anything to compare them. >> they were a benchmark. >> yeah, they say that. >> they say it but they don't mean it. >> no, a lot of people say we do what we do and you can measure us against whatever benchmark, they don't start with the benchmark and try to do better. that's what is generally meant by agnostic. >> when did you discover this? >> um, bill and i both invested with them prior to coming here. >> how many years ago? >> we were their third investors. >> we started in 2013 i think. they gained a lot of traction in 2013 because they had a full throw-year track record. that's when they really sort of escalated for them. >> i would like to say they went

through the process and curt and independently scored them and went on site with them. so it helps support our investment decision and recommendation today. i'm sorry, go ahead. i cut you off. >> i think are the hard part, obviously it's hard for us because of the things we brought up and the size. but i was just saying it is interesting, i'd love to see the other four that we had in this top five. >> so, most 120 something r.p.f.s we had there were only nine and five that had less than $5 billion. they're mostly big shops. >> that's the thing. you kind of want your ideal manager and say is there anybody out there that we can get like that and if you want to place an emerging markets, it would be is

this your best of all of them. and your only other choice is to go index so that's a question. >> my perspective on this is that they really haven't -- their performance numbers over the last five years don't seem that impressive. are you impressed by the five-year performance numbers? >> no. >> so how i would characterize is it on the face of it, it looks rather pedestrian but i think there are explanations related to what is taken place in india but the future projection for india, the fact they've had nothing in china and china's soared last year. i think when you make some adjustments is the future looks better than the last five years. >> all the references and i would consider the same perspectives, if you were only

doing this manager this wouldn't be the managers. considering the portfolio we have, this is what other references says and they add a lot of value to the portfolio. >> in what way? >> as a diversifier. like i said, we've several dedicated china managers and we're over weight china and over weight i.t. so they don't do anything in china and they have very little in technology. their returns are less correlated because they don't have exposures that are very prominent in the benchmark. >> we don't have it here but i think we've said before, remember the emerging market index is cap weighted. it's three chinese technology stocks that have been about 80% of the return in that index and these people by definition don't invest in china. i a apologize for not putting the msci emerging market index without china but in the pond in which they fish, they have done

extraordinarily well. they have not by policy been in china. >> so you mean their stock selective. >> when you take out the -- it's up 50% analyzed the last five years and they went public, i am not sure but the last couple years that stock. when you strip away the things they don't do and we have other managers that do that stuff, their numbers look better like they look on page 13. they have significant experience in india and we've been looking to get india exposure and they're over weight and they're about 35% in india and 10% or so we like that in addition to not having exposure to china we like

the over weight to india. that's the growing part of the e.m. index. g.d.p. is growing, population growth is growing and unlike china where this is shrinking population. >> how is this stock security selection in india when you look at attributions? >> it has been strong. >> there's comments or questions from the board. >> i'll be honest with you, i hear what you are saying. but i am compared to many of the other recommendations you guys have brought forward, this just seems to be lacking some of that umf. you have brought great ideas and maybe there's not any really great ideas in emerging markets,

i don't know. but this doesn't seem like one of your great ideas you have brought fourth. >> so, um, you know, this is part of the r.f.p. process so there's 120 managers that applied to the r.r.p. there's thousands that did not. among et ceter the 120, staff s2 months pouring through the 120. >> after 12 months of work this is the best we can come up with through the r.f.p. process. >> alan is saying it is. >> it is. >> if there's another process and i can think of five other processes. >> yeah. >> when you get better results if you change the process? i mean are there thousands of other managers doing worse than them or are there people of the thousands of others doing better? let me say that in a different way.

i see the rankings, they're ok. who are the people that are above them and do any of them apply to the process? so a couple other things to remember here. emerging market returns the last five to seven years until last year have not been very good. the u.s. was doing well and e.m. was not. >> i careless about how e.m. has done. i care more about how they've done compared to the universe. within that universe that has not bun over all, you had a stock like 10-cent that is a good weight, it's the biggest stock in the e.m. universe and that stock is up 50%. what did the other 800 stocks then 10 without 10-cent. that number would be materially lower. the benchmark return would be lower.

and cartica would look better than that. i want to turn back to india for a moment. listen to what some things have been said recently about india. this is from if the f.d.i. intelligence report, the for in direct investment intelligence report. the number one green field destination in the world. another one from frost and sullivan a research group it's the number one country in growth innovation and leadership index. the world bank, india jumped 30 places in their ranking of countries as the best places to do business last year. so, i think that there's some tail winds to this strategy that we haven't seen in the numbers in the last five years. now, i totally get it about the process. we spent a year pouring through paper. [ please stand by for captioner

switch ]

>> but you're referring to what we've limited you to is five-year track record, is that correct? >> we had qualifications. >> that eliminates -- yeah, we've done it ourself, eliminated a lot of boutique managers we would have seen earlier, like cal first did, but it has more risk doing that. >> any set of minimum qualificatio qualifications. minimum aum of this. if you got a liftout from george sources firm, you can't do that. >> although we did it, right? >> there was no rfp. >> yeah, we should address that at some point. >> the rfp went out in may.

not 12 months ago. >> so 11 months ago. >> went out in the may and the rfp came back july 1. so you've been working on this nonstop, 100 different whatever you want to call it from the first page of the report. but you wrote those things and the board adopted what you recommended. it's more than just a five-year average. you set the requirements. we followed it. what are you trying to rip that on us for? two, you want to do a comparison, ok. maybe there is very few ex-china managers, or other managers ask if we can compare it to this group that decided not to invest. there is all sorts of way to do comparison to find out how skillful they are to justify their -- it's 1.25 plus 20.

>> i mean, you're -- what is your level? i'm trying to be careful with the questions bashed. i don't want you to bash anybody here. i hesitate greatly to support this recommendation today, without some additional analysis about how they compare to other people ex-china, right? and just in comparison to some of the other things we've seen, i believe and i could be off base, you don't have to justify this, but it doesn't seem like a super high conviction investment opportunity. >> compared to the 120 rfps we have, this one is very distinctive. >> then maybe the 120 that responded, maybe instead of, you know -- what is the old saying,

look at investment, sunken dollars, whatever that is. college finance 101. maybe our world of 120 that we looked at, maybe that's not the best world to look at. maybe we need to change that. >> well, you know, i would prefer that we not use the rfp process. we did in this instance. if that is my mistake, then that's my mistake. we don't have great clarity on the board, or from the board about how we should conduct due diligence or how we should bring about investment recommendations to the board in public equity. we do everywhere else in our portfolio, but here, the historical norm, i don't believe it's been board policy and there is not a rule, a law, that we have to use an rfp process, but

the standard way which we've always done business with public equity until the past couple of years is through the rfp process. so in certain instances we try to follow that. and this is one instant we did. 120 replied. this is very distinctive, relative to really everyone else that we had. when you get rfps, you have a lot of been here done that. this is big firms with huge products. lot of people on staff and they churn out beautiful rrif. they don't want to participate in the process where instead i could use that exact same amount of time for investment research

and post good returns, if i post good returns the money comes to me. >> could we revisit that in governance and look at that whole process again at some point? >> here's my question, there has been many offline conversations over the last several years since i've been on the board, and even online conversations, what is the best process to find managers? what is the appropriate venue to discuss the search process? >> i think we could present it to the investment committee, that's committee of the whole. i mean, we certainly began with the discussion when we brought in the state of washington to find how they identified their managers and the impact of not using a public rfp process, not necessarily in all cases but how there is value added, return

value added by doing rfis. we have support from the board through the budget process as well as through we let you know that we're buying as good manager research as anyone out there has. which enables us to find the niche or the boutique and those times of investments. to bill's point, we have not issued an rfp in public equity for how many years before we issued the one in 2017. >> three and a half years. >> three and a half years, so back then it was to issue an rfp. that's not the whole reason we issued the rfp, but we wanted to see what strategies were out there. it was very broad.

because we wanted to cast a broad net. and that's the difference. and certainly we understand and we respect the need to be transparent. and we believe that because of the public hearings related to when we hire, especially in this area, that an rfp process in some cases and maybe the real issue is in most cases is not the most effective way of identifying like you say, the people who don't need to respond to an rfp or don't have staff in order to respond to an rfp that we never hear about. >> prior to 2005, around there, is an rfp process you could have stated was relative to other options, the most effective way to do manager research in public markets because there was no

common -- there was no wide databases that managers were just putting that data in. now you have numerous of those. and we have subscriptions to all of them. so we get great research without managers ever having to get in touch with us. so, now, everything has flipped. we have amazing research in house, and so now i think that utilizing those tools, plus your team's network and any pcs network are more effective ways of doing manager research. than what we did ten years ago. >> would you want to go back and if we could -- [inaudible] >> as it relates to this

recommendation, there is two things here. i believe that the rfi process, utilizing your network -- >> i think we should bring the conversation back to what is on the agenda. >> i'm about to do that. we would still -- we still think in terms of -- i don't want to cast any stones here either, but you know, for me, this is not an 9.5 or 9.9 in terms of recommendations, but it's north of 7. probably at least 7.5. >> can i make a proposal? i personally will not be voting for this item today. if there is -- if there is a motion, a second, i'll be voting against it. what i would ask is that if there is not a vote today, can you bring back research and try to narrow down their comparison to the universe so we can better understand as a board how they stack up against those that are

ex-china? and hey, there is really great opportunities in india and strong there and we're not looking at the last five, we're looking at the next five, right? i just want to better understand that. is there anyone who wanted to make a motion on this today? >> i believe from staff perspective, this is not pressing, we're not under any time requirements, are we? >> other than -- [interjections] >> [laughter]. >> commissioner? >> we understand what you need. a lot of this discussion is because the recommendation on a particular manager. obviously the process has raised questions. i am curious, the bar charts for the peer group. i'm just curious, not trying to be funny. how many of the managers in that

group, and they only go in if they submit their data to the group, right? so maybe some do, some don't. who knows? the managers in that group, you had a preference requirement of no more than a balance dollars. how many of those did we send an invitation to, please send rfp to us? we didn't do that, because you all have so much work. we know how much hard you work, we do, that's one. two, we're getting ready to hire one or two people for doing level 2 engagement in the carbon tracking area, correct? >> correct. >> two people just to go out to companies and talk to them about their governance, is it worth us to hire someone to help you do that outreach, by the way, we like to do searches, meet

people. you see the point i'm trying to get at? >> but the invitation is not within the scope of the rfp, because it shows you're soliciting people that you know are qualified. we need to make sure that everyone is aware of it. that's where the rfi comes in, where we've identified you as having met the criteria and we invite you to prepare a response to an rfp. >> i didn't even specify that way. i'll show you a rule. certain testing is required to be random. if it's not random, now you're singling somebody out. what we did, we got the whole group together and drew strauws and the person who got it left the room. i said invite them all, whether they're qualified or not. >> that's impossible to invite thousands of -- >> no, it's not. >> then he's required to review

every one of them, aren't you? >> you would get many had hundreds. unless you put up the screens -- >> in order to get us back on topic to satisfy the city attorney, and our legal requirements, this discussion about the search process has been going on for years. i don't believe this rfp is the best way to do it. and until i'm proven wrong, what i'd like to see is how the agenda separately, so we can deal with this, properly. ok? and if it's the investment committee or the full board, please let me know. and we'll work to get this done. back on cartica, i express my views. i think you understand about the data we're looking for. >> does the board feel differently about this? does anybody have thoughts about where to go with cartica today? bring it back? what do they want to vote for it today?

anything that the board wants to do. >> as i've heard the conversation go forward, i would like to bring you back more data in terms -- >> yes, continue. >> that's ok, commissioner. >> and thank you for your hard work. we like seeing these. but you know, we'll try to get there. >> and also you're a little bit of a victim of your own success, you've brought forward great things. >> i wanted to highlight, the rfp process. we are asked to do it. this is the results we got. generally we never respond to an rfp. we had to work ourselves into that and work ourselves. >> but you both highlighted the fact that you identified this

manager earlier when they would not have gotten into our process. so we need to look at that. >>... touched on, during an rfp, staff is bound by the same blackout provisions of talking to anybody else who has a product that did not response to an rfp that would look like we were trying to circumvent the whole fairness of the process of giving people deadlines to submit submissions. so for this period of time, you know, we have not been able to reach out for anyone who we believe would have been qualified for the rfp. so, that is another issue that we need to deal with when we bring it up before the board. >> for this item ant one that came up? >> great. >> public comment on this one. >> thank you, that was my question. any members of the public that would like to address us on this

item? >> i paid into our pension fund for 30 years and i don't want any of my money in high risk investments like hedge funds and emerging markets. if you want to invest in the emerging markets, the best way to do it is invest in american international corporations. i've lived in the united states for 53 years ago, 53 years ago it was the safest country to invest in. right now the safest country to invest is in the united states. we're going to have a lot of global economic problems. we started with brexit, that was the very beginning. when we have global economic problems, the best investment, are the emerging markets. they've done it in the past. emerging markets this past ten years have the same past performance records as hedge funds. >> thank you, any other members of the public that would like to

address us on this item? seeing none, we close public comment. thank you, everyone, for your hard work. board, thank you for the discussion. i believe the next item is item number 10. >> 10 has been continued to the june meeting. >> that was your request? >> right. >> item 11. board members, we lost 14 basis points in the month of march, global equity was down 1.5%. we made a little bit of money elsewhere throughout our portfolio. importantly on a fiscal year-to-date basis for the nine months ended, so three quarters are in the record books, we're up 8.87% for the year. in april, i believe so far this month, i think we are right around break even.

turning to the narrative. if we look on -- i'm just going to turn straight to public equity on page 3 here. is i wanted to show you some context of what pe ratios, there has been a lot of talk about how richly valued the equity markets are. pe 25 is on the high side. but the median over the last 30 years has been 21. so it's only 20% or more highly valued than the average over the last 30 years. and that is using the median. and excluding recessions, it's overvalued by maybe 18%. so it may not be as richly valued as it looks. if we turn to page 4, you look on the lower -- well actually both charts.

we'll go to the bottom one. is that based on current valuations on a forward pe basis, is the expected five-year rate of return would be about 7.5-8% annualized. not a dark day. if you look up and below that line right at pe of 16.5, you will see quite a range of outcomes. and that's always the market. when you're looking at returns over one, five or even ten-year periods of time, there is always going to be a lot of variability of return. and that is why i put in on page 5, is that you see that over long periods of time is rolling 30-year returns tend to be between 8.5 and 13% annualized, not a ton of variability. i want to move quickly to page

6. and get some of the disclosures out of the way. exeter, we asked for 75 million euros which the board approved in december. we were closed -- it did close in march. i think like a day before the board meeting we reported this verbally. and it did close and we got 50 million euros. pag asia. it came up earlier today. we did ask for $75 million and we closed at 50 million. sustainable asset fund which i believe was also reported to the board verbally last month. because it was reported as closed after publication of the board materials, we asked for 50 million and we did indeed get 50 million. the absolute return portfolio so far inception to date is up 7.18% annualized. it might be worth noting that so

far this fiscal year, since february, the equity market is down a little bit. maybe 2%. bonds are essentially flat, our absolute return portfolio david estimates is down 10 basis points over the same time. it's doing pretty much exactly what we thought it would. in terms of personnel, we have three recruitments. we're close on one of them. we hope to have an announcement on both at the next board meeting. we do have two more ic meetings coming up consecutively on april 16 -- or april 18, a week from today and also on may 16, next month. and you see on paragraphs 2 and paragraphs 3, the subject matters that will be discussed at each.

what these involve is staff is presenting our strategic plan for managing the trust assets. we define as strategic plan as having two components, one is what are our objectives? and then secondly, is what are our courses of actions, including personnel, resources, actions. what are our course of actions, research to achieve our objectives? with that i ask the board for questions or comments. >> i want to make has statement, not that you would know, mr. coaker, but we had to cancel the march 21st meeting. yes, i believe we had the agenda published, materials distributed, but still had to cancel the meeting because board traveling and medical emergencies. i say this because there is speculation or educated guesses

that again the board was trying to do something behind closed doors making decisions. we do not make decisions at committee meetings -- [inaudible] -- only the board makes final decisions. >> ok. are there any members of the public that would like to address the report? seeing none, we close public comment. >> question for the report. i want to know, one of the things that i think i recommended last year, we talked about having a fellow and i know we have it in the budget, is there any movement or anything, or we working to have a fellow or intern? >> it is our ambition to have -- you're talking about intern

students. it is an ambition, it's a desire. our schedules are so erratic in terms of travel and we're preparing for board packages starting every two and a half weeks, and in that off cycle of two weeks, there is a ton of research and travel. when we actually sit down to have what would we have this person do, and can we give them effective guidance that will get an effective outcome for ourselves while they also learn? i just don't think we're quite there yet, but i can see the day when we will be. so... >> we have a lot of action plans in the works right now. if you'll ask me that on status next year, then i can see that as being more doable.

understood. >> [inaudible] been working on this for at least two years and there is still no movement. i mean -- i've never seen a body that moves so slow. we just had a whole conversation about diversity and how it increases our investment strategy. we can't find a meaningful project? really? >> no, the commitment was to build out staff so that we would have a meaningful mentoring experience for whoever we brought on. we are very nearly complete with filling out staff. just as a piece of information, we are going forward with a summer intern for david

francele's area and we have the money in the budget, the position has been approved. and that's where we're going to start because they have the project, they have the time, they have someone who will be here to mentor. this is not free employment. this is a training experience and a training period for whoever we bring on. this is going to be for folks who are in graduate school. >> i don't need you to lecture me, i'm familiar -- >> i'm not lecturing, we're moving forward, but the issue is we need more than just the resources to bring someone in, we need it to be a meaningful experience once they get here. >> i think there are so many gaps in this organization. have we even got your hearing on when people call, beneficiaries call the service, the call center service, the website, there are so many -- >> i'll stand by we're second to

none in any department in our ability to respond back to members. and there will be people who are missed an people who exaggerate to you or board members an even to me on what their experience has been. >> i'm just pushing back. i think this organization moves at a glacial pace in an area that is not that difficult. it's not that difficult to put together a project. you have department heads, you put out a call, you have 30 days to find me a meaningful project, you're telling me your department heads, all handsomely paid, cannot find a meaningful project for the graduate student? david -- where is this on the way, this is so frustrating that there is no real like -- it's just lip service. it's just lip service. we have the money. find a project.

>> why don't we do this? we'll follow up offline what the plan is for staffing and there is infrastructure in place so the fellowship is meaningful -- >> when is the deadline? >> why don't we follow up offline and get a plan for sort of what the time line looks like and we'll go from there rather than discussing under the ci report today? is that agreeable? satisfactory? to get a plan? >> you can discuss it under the executive director report and basically give me direction to bring back -- >> -- whole thing. i mean. >> noted. i hear your frustration, i hear your question, i will work with the executive director in the cio and we'll come back to the board with something. or you can bring it up under the

executive director report. do we call for public comment, any other questions or comments on this item? >> this was 11. now you're going to 12. >> discussion item, the deferred compensation committee. let's call -- who keeps saying public comment? we'll call items 12 and 14 together. ok? and then after 12 and 14, we'll call 13. >> calling 12 and 14 together and then we'll call 13 afterwards. >> ok. we're calling 12 and 14 right now, ok? great.