>> let's have the pledge of allegiance. i pledge allegiance to the flagd states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. . >> darlene, let's call roll call. (roll call).

>> darlene, you will call out each agenda item. right now we are going to closed session. can i have public comment about going into closed session? then we will go to closed session. thank you. >> motion to not disclose the discussions held in closed session. all in favor. any opposed. okay. got the second. then we are going to move to open session now. i just want to let you know that the item number 13 will be sent on to another meeting. there is a recommendation for the third-party administrator for our deferred comp plan to be

continued to the december 12th meeting. members who want to comment on this item are invited to provide the comment under general public comment, the next item. okay. i have some public comment cards. you bryan. not here. okay. withdrew it. lilly. >> good afternoon, i am lilly wang with united for respect. we have been working with toys-r-us which filed for chapter 11 bankruptcy protection in september of 2017 and shut

down june of this year. we are here to ask san francisco to halt further investments with solace alternative asset management. this board committed $300 million to solelas. they bought up toys-r-us during the bankruptcy. as of june solace owed $300 million in toys-r-us debt. in june before laying oftens of thousands of people like the once in front of you today. an application for trademark for jeffreys toy box was started. yesterday a judge signed off on the bankruptcy plan to give control of the plan to creditors including solace while suppliers owned hundreds of millions of dollars are getting millions.

when toys of us went into bankruptcy. employees were told it would survive. creditors like solas pushed it into liquidation. "the wall street journal" said they concluded the company was worth more dead than alive, according to two toys-r-us directors. as a result 33,000 people lost jobs including thousands in california. toys-r-us employees have been count on the severance pay which we estimate at $75 million. bane which owned it prior to the bankruptcy agreed to set up an independent fund. solace refused to take responsibility and refused to contribute. you will hear from three women the impact of the investment strategies on real people's lives. we urge you to halt further

investment with solace. >> who do we want to speak? you can decide who wants to speak. >> i am rosa. i tarted -- started working in chula vista. when it closed we moved to national city. i was glad to work there. i loved the people there, everybody working was struggling, knowing that the store was closing. that was the only income that i had. it had taken me a long time to start working. i didn't know the store was going to close, that it was in bankruptcy, and i had no other job planned. i helped close the store which gave me an extra month of work because i got transferred.

my only income right now is my son working. he is paying the bills. it is hard. i have four kids. i am here today. i want to be here today because i want to share my story with you. solelas and other wall street companies did this to us. the slickwidation -- liquidation took our jobs away. we all have kids, family to take care of, pay bills, and they were depending on this. it was all just taken away. i ask you to please contact solelas to tell them to take responsibility in the part of what 33,000 are going through. they need to pay their share of the money. they need to contribute to if

funds for toys-r-us employees. thank you. >> my name is armena lopez. i am going to be short on this. i am a single mother, and when i was working for toys-r-us, i have another job before and i lost it six months before toys-r-us closed. i found out that toys-r-us was closing. right now i am on unemployment. i have two sons to support, and living in california is so hard that everything is so expensive. i have a struggle to survive over there. we are planning to move because it is very hard to find a job over there. i found out they were going to pay $3 million to solelas. i don't think that is fair.

why do they want to pay to them that they left a lot of families without income? you know, that is all i want to say. >> what store were you in. >> i was working in chula vista for seven years, chula vista, california for seven years i worked for them. it was a very happy place. there was a lot of joy for the people, for the customers working there, also for the employers. it was a very happy place and very sad when they closedown. there was a lot of people crying. it was for the kids. especially for my son. he has depression very often. right now i have problems with him because he has depression, and he knows that i don't have a job and stuff, you know, it is

tough for him and for us. that is all i want to say. >> yvonne. >> hello. i am yvonne. i am from chula vista. i worked there for 20 years. toys-r-us was the first job i ever had. that is where i stayed. i lost my job. as of june 30th all stores are closed. 33,000 co-workers and myself are out of a job. i invested in the company along with co-workers we gave up birthday holidays, school performances with family because of the job. i have a 13-year-old boy with autism. he is a true toys-r-us kid. i put so many of so much of myself. i lost two companies and have a

shoulder injury because you have my work. it was my responsibility to tell co-workers there for 35 years they were losing jobs. i started having breakdowns also because my work experience is based in the same store. who would higher me now with such you specific experience? part of the job loss i also lost medical coverage for myself and my son. solace turned down potential buyers that profit you had from the slickwidation. 14 years ago the retirement fund was used to buyout my store. i am here before the board unemployed, requesting your support. can you imagine your employees in 15 years needing to do the same. i call for your support in holding this financial firm accountable for the job losses

that are responsible at toys-r-us. i speak for my could -- co-workers. we need support today. please help us get what we are owed, thank you. >> any other public comment? >> afternoon, commissioners, i am speaking as a representative of seiu. my colleague david williams appeared before you a number you have times. what we asked is that this organization not invest in companies that work against our best interests. that coke brother companies and other organizations that lead political and labor efforts against our best interest and against our members, against our

employees and retirees are the kinds of investments that we feel are imprudent and we ask you to actually not invest in those kinds of companies because we are giving money to those organizations that then use that money to run campaigns against our personal interests. in this case it reminds me of one, and i think it was the henry hotel. it was a hotel downtown actually off union square. we brought in local two and sat down to work this out. again, it was a company that bought up a going business and closed it and changed the function. there were a lot of issues. we finally came to some resolution. i am reminded of that when i listen to the workers. a lot of us were surprised when toys-r-us closed. we thought this is going to be

they are going to reopen, not realizing the restructuring going on and we are inadvertently supporting that as long as we invest in the company us that actually find these practices are what they find most lucrative and they continue to do that. i think to the best that we can work something out and understand that we do have some social responsibility to not invest in companies that work against the best interests of americans who are working hard to sustain their families and against people who live in our community, and while these people are from chula vista we know the stores that are toys-r-us in the bay area and a lot of our kids benefited from our shopping at those sports. we -- stores. we have all been contributing to that. if there is a way to hold

further investment until this is resolved and to also say to those managers we about, we hire for investing we can't invest in companies that take political positions that are adverse to our membership in any way, shape or form. thank you. >> thanthank you, clair. >> herbert weaner. i am a member of local 1021. i would like to speak on behalf of human beings. hedge funds destroy lives. hedge funds come to a corporation, get rid of the c.e.o. they don't like i do it by unethical means with private investigators, elliott is a standout four this. they will make an xorbitant loan

the company can't repay and they will sell the company at a profit. this destroys the economy. this board has no interest in investing in that. i strongly support holding back on investment in this company. it should send a message. we are not going to put up with it. hedge funds that can destroy our economy. there is more presence on the executive boards of corporations. they are good companies until these guys get hold of it. please hold back on investment in this company. you can see the example right here. four people have testified to that effect. thank you. >> thank you, he herb. >> i am john spence. 43 year member of a pension fund.

i didn't make the last meeting. i understand one of the subjectses of discussion was the dywas thedye investment of foss. the private hedge funds are not included for fossil fuels. that doesn't make sense. if you can't go in to invest in firearms, tobacco, why should you go in the backdoor to invest in the hedge funds to do this. i would recommend you immediately divest in all of your hedge fund investments. you new members of the board, i hope you don't go along to get along to invest in hedge funds. i would like to see our retirement fund divest them. thank you. >> thank you, john.

any other public comment? in that case there is no additional public comment we will move to action number five. >> item five action item approval of the minutes of the september 12, 2018 meeting. >> i call for public comment on that item. i see no comment. could i get a motion to approve the minutes of september 12th for that retirement board meeting. >> i can second it. you want too second it? >> we have a second from our supervisor and commissioner. any discussion on that? if not, i will call for a vote. all in favor.

any denied. okay. the motion passes for action number five. go to six. approval for the minutes for the october 10th meeting. i would call for public comment. no public comment. can i get a motion to approve those minutes somebody. >> i will make a motion. >> we are a motion. do we have a second? second from commissioner driscoll. a vote. all in favor. any deny? motion passes. item 7. action item. consent calendar. call for public comment. no public comment. can i have a motion to accept the consent calendar. >> i make a motion to accept the consent calendar.

commissioner casciato did the motion. >> one item written by a hearing offer regarding john f darman classifying him as lieutenant fire suppression. he was never a fire suppression lieutenant in case there are any that recent him associated with that. the hearing officer wrote that, not staff. >> item 8. action item. >> we need a second to the motion. do we have a second? okay. >> all in favor. any deny? the motion passes. >> action number 8. recommend to convert from the equity strategy to the extension

strategy. >> a couple months august there was education on the extension strategies relaxing the law to allow for a manager to go short and increase their long exposure and the like. arrow street is an existing manager that has outperformed nicely. this strategy that they are about to recommend has significantly outperformed the incumbent strategy. >> first i want to acknowledge is the han's return from maternity leave. she is hannah's mother. we missed her. i will talk about active

extension strategy process, make a few comments and then the virtues of arrow street strategy. in september we presented the concept of active extension strategies. these are portfolios allow shorting but extend the manager opportunity us. the resulting portfolios hold hundreds of security. you get diversification benefits of index strategies. they have the alpha benefits of more concentrated strategies. our expectation is returns over 3 purse or more. these can be in the domestic markets and international markets and global markets as well. when i joined at the beginning of the year we recognized we have three quantitative managers in our portfolio today each of which run extensions of our existing mandates.

the results of those extension strategies relative to the strategies today are materially better, both on risk adjusted basis and absolute return basis relative to the strategies today. resisting my temptation to convert we went through first educating the board about the types of strategies and worked with pc and others to send out an rfi. the purpose was to validate and confirm the exist you go managers we have today are among the best in these active extension strategies. this group of 12 we went was a compilation of groups i worked within the past. we sought names from pc, cambridge and black stone. there is a lot of overlap in the names. in fact, from aren't that many

firms who i amment active extension strategies. if we look at the investment database there were only six firms that do this internationally, 11 globally and 25 firms that do it in the u.s. we send it out to 12 managers, two have global strategies. five international strategies, six u.s. that totals 12. one manager submitted rfi for international and us strategies. staff along with pc did on site visits to all of them. given her quantitative background we asked her to give us a quantitative perspective having worked for one and her experience. as we do with all firms we under wrote all of them considering

the platform, process, and of course the returns. collectively we made the decisions about the strategies to pursue. the 3030-20 strategy. before arrow street i want to describe what collectively we think differentiateses the top firms from the rest. you have heard this adapt daptor die. the best firms have to evolve the availability of data, improvement this is technology, artificial intelligence or machine learning that causes these guy to have to evolve. the best managers are constantly it prove -- improving the ability to obtain to maintain

and clean data. the best managers are constantly improving signals or models. constantly improving the optimization approaching and trading techniques. any of the managers who rest or become contents with any of those areas are destined to really mediocre return us. there is a term of decay. the pace at which signals decay is greater now than 15 or 20 years you go. you have to evolve. we are looking at the ability and willingness to evolve the process cease. in our view there are probably less than 10 truly exceptional returns. not only are the returns competitive they have a culture of innovation and revolution.

the product we have been in for three years has produced good returns and outperformed the benchmark by 250 basis points annually. the alpha extension has outperformed by 530 basis fees annually. since it was formed it has outperformed the msci equity by 110 points annually with similar risk to the strategy we are in today, with much less correlation. i will pause and turn it over to alo to reinform you our give a brief update and then we will talk about some of the considerations. >> good afternoon. our street is an existing relationship. i will touch on the firm and the

history before moving to their investment philosophy and portfolio construction and touch briefly on performance. beginning with the firm arrow street is boston based equity manager managing international equity since 1999. the co-founders have been working together at van gore asset management since early 1990. today sarrow street managed $100 billion in assets across 194 clients. they employ 250 employees with most of them based in the boston headquarters. the firm is 100% employee owned. that ownership is spread across 24 members of the senior team and senior management. we note that since the 2014 memo

there have been month major organizational changes the leadership changes that happened to anthony ryan has been smooth due to reference checks the staff have done. we have to become comfortable with the organizational stability. moving to the investment process. to reiterate staff is recommending today a conversion from the existing investment in arrow street's strategy to the active extension strategy. the universe for both strategys msci all country world index u.s. markets, other developed markets and emerging markets. it is important to notes for all strategies including these they use the same investment philosophy and process. arrow street believes markets are inefficient. by combining the investment

insights with quantitative tools and framework this can result in risk returns over the long-term. the signals that arrow street house in the library can be broadly classified into six families. value. quality, momemtum, catalyst and high frequency signal. to pick one. the quality family of signals earnings quality and profitability. a tenant unique is the emphasis on less obvious information still material to stock prices. a large part of the research is focused on information not readily available or apparent to other investors. one of the main ways to do this is through the application of

signals through the direct dimension and indirect dimension. direct is where the signals generated by the company are being apply study ride investment forecasts for the company. on the other hand applying the signals across temperature indirect dimension forecast force other companies related to that company. arrow street street has been using indirect effects since inception. methodses evolved over time. many years ago they used simple associations to group companies together. today that has evolved to an expanded linkage to use techniques such as cash flow correlation to map out industry

relationships between companies. indirect effects are differenceniate you go features that set them apart and as example of the models and research. moving to the portfolio construction, applying the signals across the direct and indirect effects resulting in suggested waitings for security. these suggested ratings are fed to the optimizer which imposes constraints related to exposure, position and sector and country ratings and apply the penalty for tracking error. that means two securities that would be expected to have a similar level of return but one is expected to have more tracking would have liar penalties. on exposure the optimizer

imposes plus or minus 3% benchmark to individual stocks, plus or minus 10% active weight to individual countries and plus or minus 15 purse active weight to sectors. at the september board meting, curt introduced active extension strategies. the standard construction 30/30 of the product we recommend today. in addition to the 130/30 there is a component of 130, 20, 20 index future data management. that allows arrow street to take advantage of the missed pricing of data i in the market.

an example is the model favoring lower beta stocks and short position to higher beta stocks. that results in beta miss match with the benchmark. by using index futures they are able to bring the portfolio in line with the benchmarks. in evaluating the conversion of the long only strategy we currently have to the active extension strategy, staff evaluated a number of facets. one of the things we made sure was that the strategies had equal effect of creating short forecasts as well as long forecasts. creating short forecasts is a

co-opponent since inception. buy removing the constraint this allows higher bets in the negative forecast securities. the other thing we looked for was experience in managing the sport folios. arrow street has been managing since 2004 and active extension 130/30 type structure us since 2008. in addition to numerous universes added to the list of universes that are covered in addition to the capabilities and introduction of the data management we can show on page nine exhibit c is an exhibit that shows the correlation of our streets current prediction to the predictions generated by the model at various points in time. if you com compare it from 10 ys

ago. it is a forecast with the model generated today. quickly on page 12, note that all the performance figures are net of the standard arrangement with arrow street. on the bottom left growth of $100 over time. on an absolute basis the extension has outperformed the strategy in addition to the bench mark. i would like to turn to the top right corner where the horizontal we plotted risk and on vertical return. the alpha strategy has a higher level of return at similar levels of risk. finally, looking at the bottom panel in the middle with the chart titled rolling year correlation we see relative to

the long only strategy alpha extension has lower correlation to the bench make resulting in benefits. in summary, there are things to live you with. arrow street continuously reinvests in research and development. the extension strategy 130, 30, 20 construction and application of signals across direct and indirect dimension ask a fresh and unique approach and represents a strong competitive advantage. for the extension strategy versus long only strategy, arrow street targets a higher value of 5.5 versus 3.0. higher information ratio .79 versus .55. higher potential for better

returns with better diversification benefits. >> okay. >> a couple of things in the considerations. i put them in three categories, firm, strategy, implementation. firm side assets big. $100 billion firm. the way we get comfortable with this is the way that arrow street thinks about capacity is the percentage of what they own relative to the cap. a level of 35 basis points where they close the strategies. further, they have had a discipline and demonstrated willingness to close other strategies. they have been others that have been long closed. second. it is complicated. we list a variety of things we consider. long short strategies are complex. managing multiple brokers

complex. turnover is higher. you have to have an infrastructure that is strong. they have been run you go this since 2004. we have been running from separately managed to commingled funds. an observation. i will point out the fees if they are successful are higher. we are paying them today about 47 or 48 basis points. you note the fees they propose to us are 20 basis points as the base fee. they will earn an incentive fee of 20% for profits above the index. while the fees are potentially higher we have achieved a far greater alignment of interest. if they don't outperform in a one-year we will pay 20 basis points.

if they performed the way they have 8% annually. that is net. our fees will be substantially higher. in our view we look at the net bases. they have outperformed 8% annually. >> is that 8% a year? >> i will pause. if you have any comments we would open it up to questions. >> i would reiterate this was a joint effort between napc and the staff. we were jointly involved in developing the list for the rf i's. we did the trips together. we evaluated the various respondents separately and communicated our independent conclusions and found that both staff and napc rated this arrow street strategy extremely highly. other strategies are on our

list. this is not. it is a candidate for the fdl list the next time they turn attention to this area. we strongly support this recommendation. >> we may order two more of these. for the educational piece in september was the intent to do more. we have to evaluate. this is not the first. we will do a couple more of these over the next several months. >> board members questions? >> commissioner casciato. >> who proposed the conversion airvo street or us? >> us. >> we sought the conversion? that's it. >> that is based on more

uncorrelate you had assets and returns. >> it is philosophical solution to have more gross exposure but sameness exposure. flexible. it is superio in practice, quantitateted strategies, size can be a benefit here. we prefer small leaum. the deeper arsenal to research signals. it is superior all the way around. >> among bill and myself we have a lot of experience investing in these strategies. we joined at the beginning of the year. this was obviously something we wanted to pursue. >> commissioner leona.

>> thanks for bringing the strategy. it is my experience. the turnover is what i worry about. usually you experience a high amount of turnover. have you seen that in your previous strategies you managed like this? >> these strategies model driven do lend themselves to a lot of turnover. that is why not only do these sites have to evolve in terms of models. it is how they trade. that is an element we have to consider. those managers that don't think about optimizing training. arrow street and others spend as much time on trading and optimizing trading. >> they model it all of the time? >> constantly. >> when you go from a separate

account you get the economy of scale in a lower pricing. this is reverse, right? >> can't refute that observation. what we gain, they have the relationships and the ability for a separate account is a nonstarter. it is the ability to affect the strategy. they have scale we could never replicate. yes, the fees are higher. they have to do well. if they don't we have to pay them well. >> these are lower. >> in terms of the prime brokers they have a approved set of prime brokers? >> five of them.

>> why i can support this. first question. the long only strategy. they did not submit a request in the r.f.p. that we did it earlier this year. they didn't bid. why not? >> no, they did not. if i may. it was the scope and intention of that rfd for a specific type of manager with very concentrated holdings. as you can see here. this manager does not have a short list of typically fundamentally chosen strategies. three invested hundreds of different strategies. different style of investment approach. >> i believe it was a minimum requirement. >> would they have qualified if they had bid? >> no. >> they would not have qualified? >> then they win a contract with

a chance to earn higher fees? >> better risk adjusted returns. >> we have not finished reviewing of this. >> upside and downside. it is doubly important. this is a long short strategy. is it one set of numbers? >> my apologies. we should have included that in the memo. it is smug commissioner driscoll asked. i will compare the long only versus active. it is short of six years. long only has captured 1.1% of any up markets which is pretty good. it has captured just 83% of the down market. that is good. capturing more of the up and less of the down. however, this strategy 130, 20

captured 67% of the down markets. that is comparison of two products. over the last five years the msci average up performance on monthly basis is 2.4%. it is average performance down su2.4%. up months, arrow street's average up is 2.9%. down month us it is down 1.5%. it outperforms the product we are in on up and down capture bases and much, much better that the industry. that is among the best of all products that we consume. >> is it worth paying 2% rather

than half percent. >> if they outperform we would pay close to 2%. >> question is that worth it? >> i think so. >> we have done this before in another area, but this is with the benchmark relative, not absolute. should we be concerned if it is big or not? fees are almost same. >> alignments are much greater if you think about other strategy that charge incentive fee above zero. here they have to meet the benchmark. as you know the odds against the active manager beating the benchmark are low. the potential is there. the 8% per year is net. >> that leads me to your page 12

appendix b. the table in the middle of the page. maximum draw down peak to trough. do i recall correctly, mr. coker, the reason for the whole series of the stuff, not just the absolute return was to lessen the draw down, go for higher consistent return us? is that true. >> that is an absolute return strategy. this is not an absolute return. >> is that worthwhile? >> it does improve it, yes, the downside capture is only 67%. this is completely different. this is a near beta one strategy. absolute return data point 15. >> it is different. one of the objectives was the effects on the draw down.

why am i concerned about the draw down. it affects contribution rates. the draw down may or may not affect supplemental colas. another reason for doing this is it worth paying more for better results? >> yes. >> tell me approximately how many dollars they have in this strategy or product. wild guess. >> $7 billion. we are proposing convert or exchange what we have. $650 million or so. we would not be among the largest in the commingled fund. >> we won't have guidelines, we take what they have? >> right. >> if we had our own separate account, i would suggest to them before they ask to do it they should include in their universe of looking for securities,

emerging markets and micro cap. >> this including emerging markets. it is global. >> thank you. >> you it was different than this. >> was a labeling issue. i assume we are talking about the same thing. >> they are different. >> sitcitit is not an issue. they have a universe to search

for. thank you. >> commissioner bridges, driscoll. we have had all questions. can i call for public comment on this? >> how many of you remember that old smith barney commercial we make money the old fashioned way. pension funds are the old fashioned way. bonds, stocks and real estate. in the last 10 years 40% bonds. in the last 10 years the annual return of 9%. how many pension funds in this country investments of annual return of 9%. there are not too many. if you get back to the old fashioned way. look at the asset classes.

public equity. you private equity 18%. real essets 17%. hedge funds 15%. you can go to las vegas and win, win, win. the odds are against you. you can invest in high risk investments and wish, win, win, you will lose in hedge funds because the odds are against you. if you don't believe me, ask helpers, ask the state of new jersey fund, ask new york city pension fund. they will tell you what i am telling you. hedge funds. they are the worst investment from an investment point of view, public relations and you

should divest right away. it takes mr. coke two to three years, you should start right now. >> thank you. >> is this a hedge fund yes or no. >> no, it is not. >> i was confused. >> any additional public comment? additional public comment so now request a motion to approve to convert arrow street existing mandate from global exto alpha extension strategy. do i have a motion. >> i move to accept the recommendation. >> commissioner bridges moves. second from commissioner driscoll. all in favor. motion passes. let's go to 9. >> action item.

proxy voting services request for proposal. >> i am not sure how much we need. the proxy service provider contracts? june of 2019. this is a request to the minority. >> nothing to add to that. >> i call for public comment. there is no public comment. we will go on and request a motion to approve that recommendation. >> so moved. >> i have got original, second. darlene, you got those? commissioner casciato. let's have a vote.

in favor. any opposed? no one is opposed. motion passes. we will go to number 11 on the agenda. discussion item the cio report. >> how about number 10? >> excuse me. item 10. amendment to investment guidelines for parametric. >> i will ask anna to come up for questions. this is a request for a minor modification in the investment guidelines. prepare a metric to reduce the duration. do you want to make a comment or two about the rationale for the recommendation? >> in february this year, the board approved recommendation for parametrics associates to

manage cash overlay. they are doing it using liquid futures and equities. the benchmarks that was recommended is 68% msci and 32% now it is bloomberg us universal which used to be the benchmark but now this long-term fixed income benchmark is two-thirds bloom bird barklays, u aggregate, one-third aggregate and two-thirds u.s. intermediate treasuries. the recommendation is toual line the benchmark for the cash overlay with the long-term bench mark for the fixed income which will bring the duration down

from 5.8 years to 4.5 years. >> it is slightly reducing sensitivity to interest rate risk, but it aligns how we are managing the credit strategy with the parametric guidelines. >> it is a fixed income change there. >> yes. >> okay. any questions from the committee? no questions. open up for public comment? i see no public comment. a motion to approve the changes in the bench mark. >> so move. >> second. second commissioner driscoll. article in favor. none against. motion passes. now we are going to call for the

cio report. >> item 11. chief investment officer report. >> thank you, arlene, board members. we have a long cio report. you recall last month we deferred this report. it is two months much reporting closing activities of private markets investments into one. it is unusually long. i will get to the closings in a moment. obviously, we had a really brutal month in october in the equity market. the equity market was down 7%. our portfolio is negative 2.74. it will be 2.9. the hedge point lost 1.0% when the bond market was down and the equity market was down more than 7. i believe it is 70/30 mix lost

5.5%. we did much, much better than 30/30. turn -- 70 clash 30. turning to the narrative. the first item discuss us the returns. the second i did want to thank curt for preparing the graph on page 2. we have been reducing our public equity exposure pretty considerably to the tune you have $1.5 billion since march to fund private market investment, private credit as well as absolute return. all of those portfolios have done well and public equity has gotten tanked here since march, particularly in october. the timing of our reconstitute

asset allocation has really been quite good. we didn't do it because of timing. it was not predictive. this was our recommended asset allocation really to optimize -- optimice risk and return. this turned out good. we have lost a lot less because we have less exposure to public exthan even nine months ago. the turning to item number 4 that is a narrative how we have allocated capital here since october. the bottom line is that our private equity portfolio the board approved in october of 2016 in terms of assets allocation is done. real assets is essentially done. absolute return is essentially fully