in supporting this community. >> commissioner mazzucco: thank you. commission commissioner elias? >> commissioner elias: thank you. i wanted to thank you for bringing this farther and putting this on our agenda. my mom is a two time cancer survivor. i'm wondering if there's an ability to have people donate on behalf of officers so that, you know, i know that people can get the patches themselves, but if people were able to donate, and then, you were able to provide officers who hadn't, you know, purchased the patch, if that would be possible. >> of course. we'll take it all. >> commissioner mazzucco: commissioner dejesus says she wanted to buy several. >> yeah. you can buy them. pink is your color. but there's a mechanism by people to do that. >> also, buy extra back donated to the department? >> yeah.

>> yeah. i just wanted to add through this local agency, if they wanted to go to the website specifically, they can do that, as well. so this is just one mechanism through the police department, but we will put them in contact with this agency, which is -- it's as local as it gets. the bay area cancer connection, and their goal, as sergeant mccray mentioned, personal support to breast and ovarian cancer patients and their families, so it's pretty broad in terms of the services they provide. >> all right. thank you. >> thank you. >> you're welcome. >> thank you. thank you so much. thank you for doing that. >> commissioner mazzucco: so what we're going to do here is we have to make an amendment to the uniform department general order for purposes of this october, so i'll ask, do i have a first and a second, and we'll go to public comment. >> so moved. >> commissioner mazzucco: do i have a second? >> so moved. >> commissioner mazzucco: any public comment regarding this? has to be regarding this. >> okay. i agree.

i stipulate to that because i, too, have family members that are on the receiving end of breast cancer, and because you are law enforcement, i think it's ideal for you to take not only this up in the organization, but also how a lot of this assault cancer is affecting females that worked at the shipyard, and also in your jurisdiction of treasure island. there's three different types of materials causing cancer in females and birth defects coming from that shipyard. >> commissioner mazzucco: all right. thank you very much. any further public comment regarding this? all in favor? [voting] >> commissioner mazzucco: it's unanimous. thank you very much, again, to sergeant and everybody who did this.

thank you. [applause] >> commissioner mazzucco: please call the next line item. >> clerk: item three, presentation of sfpd general policy proposal sparks report, first and second quarter 2018. discussion. >> commissioner mazzucco: thank you very much. we have deputy chief connolly and samra marrian from the d.p.a. to give the report. >> okay. vice president mazzucco, chief scott, director henderson, and commissioners, covering the first and second quarter 2018, the sparks report, which is a reporting out on our policy and

development. i'll switch over microphones. in essence, i'm going to be very brief in my comments. the numbers speak for themselves. there have been 123 bulletins issued in the last six months. 64 a priority bulletins, 54 b, and eight c. at the bottom, it is reporting, you see department general orders. the next -- the following six slides are those general orders in your packet. i am not going to go through them all, but i will tell you that there's 21 general orders in progress. of the 21 general orders, six are directly related to the department of justice, 272 recommendations. four are currently with the california state department of justice for their review and input in conjunction with the memorandum of understanding with them, and additionally,

there's one department bulletin that is with the department of justice, and that has to do with the -- the limited english program or the l.e.p. program. again, they're in your packet. you also have a listing of the all department bulletins, primarily the a and b bulletins. on the final page of the -- the -- let me move forward here. these are the objectives from the -- the federal use of -- or excuse me, the federal department of justice report. those are the objective areas. there are a total of 74 recommendations out of the 272 that point back or speak to some areas of policy development. as you can see, by the 21 general orders and the numerous

bulletins that we have been working diligently on this. it is a capacity, too. there's always competing interest, but we have prioritized most of these orders -- in fact, all of them, but you will be discussing that at a different time outside of this presentation. so other than that, it's open for questions. i do know d.p.a. has the second half of the presentation in conjunction with the sparks report. >> commissioner mazzucco: we can move through the second half and then we'll have questions. >> good evening, commissioners, chief scott, deputy director henderson and members of the community. it's my pleasure to be able to talk tonight about four main policy projects we've been working on for quite sometime, but we took the time to not only give you a cover highlights of those four policy projects but also to give you an indepth recommendations. and a few of them also have action items for this

commission, so those four areas are use of force review, interactions with deaf and hard of hearing individuals, some language access recommendations, as well as reports provided to victims of domestic violence, sexual assault, stalking, human trafficking and el der abuse. so to start with our number one priority, it involves a robust review of use of force incidents. and when the d.o.j. reviewed the firearm discharge review board, which is the way in which historically officer involved shootings have been reviewed, they made some really important recommendations to really enhance that process so that it would be an opportunity to look at tactics, training, policy. and building on that, our agency, we looked at what lapd has historically done in terms of looking at their officer involved shooting cases. and in february , we had an opportunity to go to seattle. and we purposely picked seattle because in part they're really

at the forefront of some reforms. there's many similarities to our own city and to our own use of force policy, and san francisco police department has also worked with seattle specifically around crisis intervention team work, so we thought this would be a great opportunity to see the kind of reforms that they had done. we invited the police department to accompany us on this trip, and it was really an informative trip. i wanted to spend a little time talking about it because it really forms the nature of our policy recommendations. when we went there, we had an opportunity to not only meet with their use of force unit, and that's a unit that's reviewing all of their use of force cases, we had an opportunity to look at their use of force investigative unit, as well. and that's another -- another aspect where they're able to look at and really delve into use of force, and we were able to spend several hours listening to their use of force process. it was a really robust

discussion where there were different kinds of sergeants who were providing detailed responses and critiques on their use of force cases. so based on looking at what lapd has done, discussions with the chief specifically around being able to replace a firearm discharge review board with something broader like a serious incident review board as well as looking at some of the accountability features that seattle has in terms of the kinds of reports, we've made a number of recommendations, and the first is to create a serious incident review board to replace the firearm discharge review board so there could be a broader array of reviews, so those kind of cases that involve more serious injuries, certain kinds of cases, perhaps with the eriw injuries to the head, there would be the opportunity to have a much more robust review process. we have also made

recommendations to categorize the types of force so that there's a stream lined way of reviewing certain types of cases. other types of cases would have less serious review. to have this force investigative team, from our perspective, we could see what currently is an involve involved shooting team to be expanded so that there's a way in which there'd be greater response for more serious incidents, and then, to have this review unit so all uses of force would be reviewed through a particular kind of unit. and ultimately, during the review process, similar to what is best practice now, to be able to look at deescalation, officer decision making tactics. of course we're looking at the use of force in policy or not, but also concerning quality of supervision, the quality of the investigation and equipment issues. and in ward, we recommend there's a template for looking at those types of issues, that there's a report that's provided at the end of that process and there's a report that's provided to the public.

so again, there's more accountability, there's more transparency. and ultimately, one of our recommendations is to move this process along because we've been in process. we're talking to the department about it. we've gathered best practice research, but our recommendation is that this commission move forward with having a small stakeholder group that can really formulate what does the use of force or the serious incident review board like like? what are the components? what does that department general order look like so there's a working group that can pull together that -- that d.g.o., present it to this commission. but i would also recommend, and our recommendation is that there be site visits. when we embarked on c.i.t. back in 2010, it was a huge move forward, and part of the process was to have a working group. we did site visits, we look the at lapd, we looked at memphis, and it was an opportunity to get from subject matter experts an opportunity to see what's different, what could be applied to san francisco, so

that's part of our recommendation. so that's our number one recommendation, and i don't know if it makes sense to talk about each one and take questions and then move through the -- >> commissioner mazzucco: one thing is yeah, we're going through the sparks report, and i know that commissioner turman would have had a heart attack. >> that's why i did a cover letter. >> commissioner mazzucco: so we're covering the high points. we're not getting into detail and making cases for or against these different things. so what we need to do is just stick to this is what we recommend. this is what we look to look at when we revise that department general order. so i hate to limit you, but we have to keep on the time limit. >> commissioner dejesus: i have some questions about this. we have sat on the firearms discharge review board. when i hear you talking about the serious incident review board, we're talking about the

serious ones, not when somebody is taking off their weapon, and it discharges. having sat on there, sometimes there is robust discussions, sometimes there's not. so you talk about a template, that they would have to go through a check list each time. i think that's a great idea. so when you get done, part of it is what's the next steps to really get this thing moving forward. >> and that's where -- i mean, part of our recommendation to the commission is that there be a working group so that we're able to move forward. we've had ongoing discussions with the police department and we're really wanting to move it to the next level. >> commissioner dejesus: okay. great. is that what we have to calendar? >> commissioner mazzucco: yeah. >> thank you. so that's our top recommendation. so the second is working with deaf and hard of hearing individuals. so in february , i initiated a working group with deaf and hard of hearing individuals with the hope to put together a department general order. we've been working on that for quite sometime with the police

department. at this stage, we are almost completed with the department general order. the department's had a chance to look at it. and part of why we're bringing it to the commission at this moment of time is in september, will be national deaf and hard of hearing awareness month. we'd like to calendar it for september so that we could actually roll it out, individuals from the working group could attend. it just seems it would be a great time and to have that deadline in place. again, our request is we're able to calendar it for september and move forward on training and -- and get the department general order to you for september. >> commissioner dejesus: okay. >> so then, the third topic has to do with language access. we have provided really detailed recommendations that we're working on. in the past there has been a commissioner who has attended our working groups. that commissioner is no longer. our request is if there is

interest, a commissioner would begin attending our language access meetings. the next one is next month. i don't have the date right offhand, but it's the third week in august. it would be great to have that continuity with the working group. and then, the next recommendation has to do with sexual assault, and elder abuse. and we've worked for over a yoer to have the department comply with family code section 6228 because by law, those enumerated victims have a right to have their victim incident report within five days. for good cause, the latest is within ten days. we've worked with the department to get a procedure in place, but there's still a lot of glitches. and again, we're bringing these recommendations to the commission so that there really can be full implementation, and our request is that there be quarterly reporting to the commission on compliance with 6228 because it's been such an ongoing issue that's been

raised in numerous cases. we've tried to resolve it, but it's been an ongoing problem. so tho can concludeds my report in terms of our four main policy areas. >> commissioner mazzucco: thank you. and your report is very thorough, always extremely thorough. >> i just wanted to say, samra, those of you that have been on the commission for a while, and we've been talking for at least the last year, refocusing a lot of these sparks reports, and in the past, you've gotten a lot of the documents that have been presented to you. in my opinion, they've gone kind of like water under the bridge, and so with any position, we're trying to get a new position with the sparks report so they're a more focused and meaningful presentation with the topic issues. we're taking the top priorities and focus on issues when they become ripe or that we feel

that they're ripe for the commission to take action which is why you're getting these four with the recommendation on each of the topics which is to create the serious incident review board, to attend the hard of hearing board -- i probably should have explained it before we made the presentation, but i just wanted to answer the unasked questions of how and why we're approaching the sparks report in this manner to make it more efficient and effective for the commission. thank you, samra for doing all the work and helping us get her. >> commissioner mazzucco: commission commissioner elias. >> commissioner elias: thank you. i guess my question would be how we would get the police

department with respect to the firearm review board. >> commissioner mazzucco: commissioner dejesus? >> commissioner dejesus: i was -- first of all, i want to applaud you for telling us next steps. the serious review board is something that's near and dear. i think i've been asking for a variety of different reviews. so i would ask to put it on calendar, whether this commission will agree to put together a working group with the department and all the different groups that we're going to include to talk about serious incident review board and moving that forward in terms of following the recommendation. i also think we should calendar whether we should have quarterly reports for the domestic violence to give the five days so we can camera out and do what needs to be done with that so we can be in compliance with the law. and the third thing is if no

commissioner would sit on the language thing, i'm more than happy to do that. >> commissioner mazzucco: all right. thank you. anything further? any public comment regarding line item 3, the sparks report? just for reference, the -- hearing no public comment, the sparks report named after former commission president teresa sparks, 'cause we're trying to keep up with all the general department orders and changes. we've dealt with things on an emergency basis with the department of general orders because it's become an issue. what we're trying to do recently is we're trying to mirror the reforms that were requested by the u.s. department of justice. obviously if they think it's a priority then we've been prioritizing those. with reference to serious incident review board, commissioner dejesus is right. we both have sat on that, and actually it's getting a little more robust, i have to tell you

the last couple of times. there's been some discussion thanks to the participation of the d.p.a., well, how would this look under the new department order? i have to tell you there's been more questioned being asked by the members of the command staff. that is important that we do look at that because you know, things will change, and we start -- you know, the public wants to see -- in any serious incident, they want to review. and i think what happens for members of the public, things happen, and they say what can they train to do differently. we're always looking to improve, and that's part of our role to make sure that happens. i appreciate your efforts, and again, thanks for sticking around. >> yeah, yeah, yeah.

>> commissioner mazzucco: please call our next line item. >> clerk: item four has been put over. we're now on item five, general public comment. [agenda item read] >> commissioner mazzucco: good evening again, sir. by the way, your research on the statute of limitations was excellent, and it was right. go ahead. we'll start your clock. >> i want to close by answering a question that was presented

by your staff. sfg, please. this is the senate bill that you were curious about, the companion bill in the state assembly, ab 3118 is the one that was in question, authorized by assembly man david chiu, democrat of san francisco will compel a statewide audit by 2019 of police agencies, hospitals, crime labs, and any other facility that handles or stores sart, which is assault kits, so get the definition -- definite count of the backlog of untested assault kits in california. a number that currently only exists in -- san jose police only has assault kits totals

going back to 2012. moreover, a joyful heart foundation, a nationwide sad voe cassy -- advocacy group helped craft along with chiu an estimate that the state backlog numbers at more than 13,000 assault kits based on available records and public records requests. it is believed that the actual total is likely thousands more, and is chronicled at thebacklog.org. and i believe that and i'll stipulate to that because at hearings when representatives for females spoke how at san francisco general hospital during one time frame, there were about 260 reports of

assault to the hospital. during another time frame, there was another 300 victims that came into the general hospital. then in another time period, there was another maybe 2 or 300 victims that came into the general hospital. in fact during the hearings before the board of supervisors, it was testified to that there was one year, about 500 assault kits came to the general hospital. then, another year, about 450 assault kits were taken from victims of assault at general hospital, so the number is a lot higher, and i know what i've seen on an educational show. when they showed that storage room at the hall of justice, the assault kits and numbered were stacked up to the ceiling. so that's a major problem. and also, i notice in the documentation from staff where they were talking about the --

[inaudible] >> commissioner mazzucco: thank you, sir. your three minutes are up. thank you very much for your presentation. any further public -- general public comment? yes, sir. >> hello. pleasure to be brief. my name is jonathan burger. i'm a resident of san francisco and i work at a technology company here in the city. the thing that brought me here today was a question/comment about car break-ins. given my first meeting here with the commission, i'm not sure if the public comments are always as negative or as critical as i saw today. but i wanted to -- >> commissioner mazzucco: oh, they are. >> they are? okay. i suppose i -- i wanted to add that that i think it's clear to most citizens, you can't block a public street for seven days, and i very much appreciate the police's difficult job in that matter, so thanks. >> commissioner mazzucco: thank you. any further public -- general public comment? hearing none, general public

comment is now closed. and actually, i should say, we do get a lot of positive comments. but people come, and this is their opportunity to say good or bad things. we do see some of the same crowds that bring up the bad i think thises all the time. but our job is to sit here, listen, and do the best job that we can. next item. >> clerk: item 6, adjournment. action item. >> commissioner mazzucco: do i have a motion? >> motion. >> second. >> that was quick. thank you very much. we're now adjourned. .

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city and county of san franci o sfgovtv.org. >> neighborhoods and san francisco as exists and fascist as the people that i think inhabitable habit them the bay area continues to change for the better as new start up businesses with local restaurants and nonprofit as the collaborative spaces the community appeal is growing too. >> what anchors me to the community i serve is a terminal connection this is the main artery of the

southeast neighborhood that goes around visitacion valley and straight down past the ball park and into the south of market this corridor the hub of all activity happening in san francisco. >> i'm barbara garcia of the wines in the bayview before opening the speculation we were part of bayview and doing the opera house every thursday i met local people putting their wares out into the community barbara is an work of a symbol how the neighborhood it changing in a a positive way literally homemade wine that is sold in the community and organized businesses both old and new businesses coming together to revitalizes this is a yoga

studio i actually think be able a part of community going on in the bayview i wanted to have a business on third street and to be actually doing that with the support of community. >> how everybody reasons together to move each other forward a wonderful run for everybody out here. >> they're hiring locally and selling locally. >> it feels like a community effort. >> i was i think the weather is beautiful that is what we can capture the real vibe of san francisco i love it i can go ongoing and on and on about the life in the

>> my passion for civil service is inspired by a tradition. scda stands for supervisorory control and data acquisition. we can respond to an alarm, store history, so we can look at previous events and see what went wrong and if we can improve it. operations came to scda and said, can you write a program that would run the pumps at crystal springs pump station to eliminate peak power usage during daytimes, and we performed that function. i love the puzzle.

every time there's a problem that comes up, it's a puzzle that has to be solved, and we do it. >> travis writes all the code for the original water system. he is super passionate. he knows every little detail about everything. he's a great troubleshooter. he can walk into the plant, we can tell hem an issue, and he'll nail down what the problem is, whether it be electrical, mechanical or computer. he works very well with others, he knows how to teach, very easygoing, great guy to work with. >> my passion for civil service is inspired by a tradition. i'm performing a task that has been done for thousands of years. the aztec had their aqueducts

and water supply for the city. we bring water from the hetch hetchy reservoir, and we don't pump it. the romans would have been proud. my name is travis ong. i'm a senior i.s. engineer . >> i love that i was in four plus years a a rent control tenant, and it might be normal because the tenant will -- for the longest, i was applying for b.m.r. rental, but i would be in the lottery and never be like 307 or 310. i pretty much had kind of given up on that, and had to leave san francisco. i found out about the san francisco mayor's office of

housing about two or three years ago, and i originally did home counseling with someone, but then, my certificate expired, and one of my friends jamie, she was actually interested in purchasing a unit. i told her about the housing program, the mayor's office, and i told her hey, you've got to do the six hour counseling and the 12 hour training. she said no, i want you to go with me. and then, the very next day that i went to the session, i notice this unit at 616 harrison became available, b.m.i. i was like wow, this could potentially work. housing purchases through the b.m.r. program with the sf mayor's office of housing, they are all lotteries, and for this one, i did win the lottery. there were three people that applied, and they pulled my number first. i won, despite the luck i'd had

with the program in the last couple years. things are finally breaking my way. when i first saw the unit, even though i knew it was less than ideal conditions, and it was very junky, i could see what this place could be. it's slowly beginning to feel like home. i can definitely -- you know, once i got it painted and slowly getting my custom furniture to fit this unit because it's a specialized unit, and all the units are microinterms of being very small. this unit in terms of adaptive, in terms of having a murphy bed, using the walls and ceiling, getting as much space as i can. it's slowly becoming home for me. it is great that san francisco has this program to address, let's say, the housing crisis that exists here in the bay area. it will slowly become home, and

i am appreciative that it is a bright spot in an otherwise . >> as a matter of -- could we push the pledge of allegiance until later, or as a matter of protocol, do we have to start with the pledge? [inaudible] >> okay. why don't we wait until we have everyone here, and then we'll do that. roll call. [roll call] >> clerk: we have a quorum. >> president stansbury: great. we're going to be going into closed session, but before we do that, we'll be going into

public comment before closed session. but seeing no >> president stansbury: why don't we call the meeting back to order. we are just coming out of closed session, and my apologies to the public for making you guys wait so long. it was a very long day. is there a motion not to disclose? [inaudible] >> president stansbury: there's a motion. is there a second? i will second it. >> for which issue? >> president stansbury: a motion not to disclose what was coming out of closed session. there's a motion and a second. seeing no -- what's that, robert? [inaudible] >> president stansbury: i'm sorry. oh, just take the vote. okay. can we take this item without objection, then? >> yes. >> president stansbury: great. item passes. now we're going back into -- why don't we start with the pledge of allegiance.

everyone here, if you'd please rise and join us for the pledge of allegiance. [pledge of allegiance] >> president stansbury: great. thank you so much. why don't we call general public comment. any members of the public that would like to address the commission under general public comment? seeing none, we will close general public comment. next item, please. >> clerk: item number 5 is an action item, approval of the minutes of june 13, 2018 meeting. >> president stansbury: okay. great. i think we can take those as submitted. we'll calltor public comment. are there any members of the public wishing to address the commission on the minutes? seeing none, we'll close public comment. there's a move -- there's a motion and there's a second. any discussion? great. can we take this item without

objection? item passes. next item, please. >> clerk: item number 6, action item on the consent calendar. >> president stansbury: great. why don't we open it up to public comment. are there any members of the public that would like to address the commission regarding the consent calendar? seeing none, we will close public comment. is there a motion? i'll make the motion. is there a second? >> second. >> president stansbury: there is a second. any discussion? seeing none, can we take this item without objection? [inaudible] >> president stansbury: great. item passes. why don't we go ahead and call -- we'll move right onto item number 7, please. >> clerk: item number 7, discussion item, the investment committee report. >> no action's taken at this committee meeting, but there's education on three subjects -- actually, two. actually, director franzel

discussed his plan for an absolute return portfolio. the key points he tried to stress to us was the average wait for the various strategies that we're planning to invest in, even though they are very wide ranges, but focusing on what the average wait might be helps understand exactly where -- how the money will be allocated. we talked about leverage, remember to explain. remember to focus in the net areas, the leverage that we'll be exposed to, which is significantly less than the actual long dollar amount. we did not discuss any other invetment strategies. part two, our new management director, mr. colins, very impressive, the document he showed to the board, in this part of the meeting. those of you who had not read it, i suggest you get it and keep it.

you will start to appreciate how complicated the subject of e.s.g. is that we are going to try incorporate in all of our investments, let alone have all our managers incorporate formally in their investment process. so you'll just start to see how broad the task is and how much detail work must be done to incorporate this new -- how do i use the word? process, and how we're going to incorporate this e.s.g. into all of our investing. one person from cambridge was there discussing her involvement as well. the key thing to walk we away with during the presentations, we may have voted to do something, we are now starting to see how much work will be involved and how difficulty tricky assist -- it is in chiefing expects rate of return and still doing it with real good social, governmental and environmental policies. it's looking at the difficulty

and how it may affect our rate of return. so that's what the committee was all about -- committee meeting. >> president stansbury: thank you for the report. we'll open it up for public comment. are there any members of the public that would like to address the commission regarding this item? seeing none, we'll close public comment. any discussion or question from the board? great. thank you, commissioner driscoll. why don't we move onto item number 8. >> clerk: item number 8, action item, recommendation to commit up to $300 million to cartica's emergency fund. >> great. thank you. cart and others have -- cart and others have provided the board with some additional data and analysises as well as other data. this strategy is also led and

formed by two women, and they're recently joined by a third woman who's recently joined as their coc.i.o. so kurt, thank you very much for the additional material. >> you're welcome. you'll recall at the april 11th abort immediating. investment -- board meeting, investment recommended 300 million to the cartica investment tremendous gee. cartica was the result of an investment strategy that's announced about a year ago. however when we presented cartica to the board, the board expressed several concerns primarily based on their results -- historical results and some concern in growth and assets. in addition, they questioned the firm's relationship with calpers, and the sizing of

cartica with fers portfolio. staff feels that cartica is a great solution for us, a great fit, and we weren't successful in getting you guys to see the same thing was a failure on our part. so today, we want to address the board's concerns, and time permitting, we want to go through an example of a security, one of their top positions. following the meeting, we did have andrew write a separate report which is included in the material where he assesses cartica's e.s.g. practices in both the way they've managed their firm and the way they've managed their assets. what we'll do is a little bit more of a visual presentation as opposed to what we historically do in a memo driven way. but before we get into this, i want to remind the board of a couple of attributes we got into in our april meeting. first, we look for managers that have a differentiated, innovative, investment process

that we think is sustainable over time. we look for managers that have strong business platforms marked by long-term institutional investors like sfers, firms that focus on one strategy, not multidisciplines. we look for certain shared values or alignments with their investors. we don't want to own every security, otherwise we'll look like an index. we look for concentrated portfolios, and if we can find firms that have these attributes, we then look at the historical returns that we want them to be correlated or have low correlation with the other indices. that's exactly what we found with cartica. with that said, i'll give you a

brief overview or background of cartica. it was a a washington d.c. invest 789 firm founded in 2008 by former employees of the w.s.c., which aa branch of the world bank. the firm employs 35 people today and manages $3.1 billion for a select group of institutional investors including some prominent california based institutions, calpers, calstrs among them. they combine top down country selection and bottom up security selection. cartica is an activist manager, not a saber rattling that we may see on the front page among certain firms. they engage with companies to help them improve their businesses in terms of reporting, capital market

structure, and more specifically governance practices. they tend to be a top shareholder in every company that they own. this is important as we go through this. they typically own four to 7% of any one firm's outstanding shares so that they can get the firm's attention, you have to own a big portion of that company. so within our portfolio -- so a couple things, this was an r.f.p. what we were trying to do was see if we could upgrade the capablities of our emerging market managers. if approved, we're not going to add exposure to emerging markets, they will be funded by some of our existing managers. that said, we have a diverse identified group of emerging markets managers, but we also have three dedicated china managers, and this is why cartica's so important to sfers.

because of our concentration among -- of china managers, over 50% of our emerging market exposure today is in china. cartica's highest exposure is in india, brazil, and mexico. cartica's focused at the moment on industrial and consumer discretionary stocks, so by sector, by country, they're complementary to our portfolio. let's focus on their performance. there's a lot of data shown on page 12 of our memo. and here we just compared cartica's results relative to all the others that we have in the diversified emerging market space. i'm not going to go through all of these numbers, i'm just going to have you focus on the

charts on the far right where we plot cartica's peers and their returns, and we show them in two time frames, since cartica's inception, and down below we removed their first year. you'll recall they were up 89% of the first year. so we're moving it. what is telling about cartica's performance is regardless of period, they have produced higher risk-adjusted returns. page 13, we consider cartica relative to the others in our portfolio on a variety of measures, and this is important. they have the highest tracking error relative to their index. that's what we show on top. they have the lowest correlation relative to the indexes, which is important. and on the far bottom right, we show their correlation relative to all the other managers in our portfolio. cartica has the lowest correlation relative to their peers and relative to the

indices. they're an important piece of our portfolio construction. addressing the board's concerns about cartica's performance relative to their index, they're quite different relative to their index. cartica tends to focus on small and midcap companies. 75% of their portfolio is invested in such companies, while 80% of their benchmark are in large cap companies. the notice, cartica has not invested as much if any in i.t. companies, yes 30% of our benchmark is in -- yet 30% of our benchmark is in i.t. companies. as i noted before, this is true relative to the index, cartica has not invested at the moment in china. china has been, at least up until recently, one of the best

performing e.m. indexes, e.m. markets. they haven't invested in south korea, which represents 16% of the index. and it's not because there aren't good investment opportunities. remember cartica is an active investor, and the ability to apply activism or the ability to apply engagement with management in china or korea has been limited. cartica is starting to do some things here, but their exposure's relative to their benchmarks are quite different. small cap companies, no i.t., no china. i think we made these points pretty well to the board last time, so you asked that how have they done, how has their security selection been in the various countries that they invest? . what we show, this is a little bit of a complicated chart, the gray bars here show the expected return, cartica's expected return in each of the countries, and that's simply

cartica's weight multiplied by the term of the benchmark. in the blue however it's cartica's actual results in those companies. cartica's selection, if you will, across these seven markets is about 14.5% -- has added 14.5% percountry. questions about india specifically, which we show at the bottom of this page, and on page 18, in all times frames, cartica's got stock percentage in india, cartica's added significant value, over 8% annually since their inception. and you asked these questions, whether their historical selections have been disbursed. here we show the short drivers over the last several years, there's not one particular driver year over year that has driven their returns. the returns have been over each

calendar year. which leads us then to how they perform relative to the indices. what we did is we compared their results, again, the same time periods against the mcsi, emerging markets benchmark, but we also compared them to an mcsi benchmark without china, we chaired them to an mcsi without technology, we compared them to an msci, small and midindex. against all of them, cartica has superioror adjusted risk returns. >> say that again. >> what we didn't do them was show them against a variety of emerging market indexes. what we did here, and we've done on subsequent pages is we compared the results against

that index, but we also included several others, the msci emerging market, ex-china, msci emerging markets ex-i.t., msci emerging markets, small mid-cap. >> are there any other indexes that represent the emerging markets small mid-cap space? >> no. what cartica does is very special. it's concentrated, etcetera, small and mid-cap focus. there isn't a perfect proxy of what they do. but the point of this is to give them their fair shake and have you gain some perspective of what their performance looks like against a more comparable index. and against all of these indices, they produced higher risk adjusted returns. >> how we compared in those markets where we don't have an

emerging markets exposure, have we looked at some -- maybe what some of our other managers are doing as a basis of comparison? >> most of our managers in the e.m. space look a lot like the index, and that's part of what we're seeking to achieve by getting differentiated exposure. we won't go through the list of the names, but they tend to have benchmark like exposures in terms of market coop, in terms of countries, in terms of -- cap, in terms of countries, in terms of sectors. >> i don't mean to hold you up, but did we see -- i think willington was one -- we will wellington was one of the names on the chart. did you provide anything that we can see what they're doing in the same markets? >> we do. we didn't think it was important relative to the examination of cartica.

cartica is different than what we're doing with wellington. wellington has a large and midcap bias. cartica represents something very different. >> okay. thank you. if you'd like to keep going, please. >> wellington's exposures would be much more benchmark like, like country, company, active share, tracking error, etcetera. >> i've moved us to page 24, just in the interest of time. bottom right hand graph, and again, apologies for a lot of data here. what's important, again, here is this context, rolling three year periods, cartica has much lower correlation -- has low correlation relative to all of these indices. >> here on the lower right is

cartica's correlation is very different than the market as a whole. they have much more stock specific risk rather than market risk, and on the lower left, what we also like, is that cartica has meaningfully less volatility of returns than the benchmark as a whole. >> okay. i'm going to move us to page 25. i think we've demonstrated that cartica is different than the benchmark index. they provide substantial downside protection relative to the indices. their drawdowns, which are often losses from peaked trough tend to be less than that of the index, and their recovery from those drawdowns tends to be faster. and the hall mark of a good manager ultimately, and the way to compound good results over

long periods of time is to lose less and recover faster. and these are the types of textured analysis that i don't think we -- we didn't provide last time when we just look at three-year or five-year comparisons. so we talk about cartica, they manage a concentrated strategy, which we like, high, active share, unique process with high barriers to entry. there's an e.s.g. relative to what they do, and that's what staff sees in cartica. i'll pause here because we're going to go on and talk a little bit about their gross assets under managers, calpers, and i want to first address questions on their performance. >> commissioner driscoll.

>> captain driscoll: i'm going to go to page 22 and page 23. you had a couple months of performance were added from what we saw two months ago, correct? because you can see the inform 4.2 for the four months that would show sort of an uptick in the chart on the right on page 23. the point, though, i want to focus on -- [inaudible] >> absolutely. >> captain driscoll: which maybe that's why you added it this way. we figured it out last time it's not as compelling as a case looking at their since inception numbers, particularly since it was with $200 million. if their goal is to have 47% ownership in a -- 4 to