. >> president yee: of the 26 neighborhoods we have in west portal, it's probably the most unique in terms of a small little town. you can walk around here, and it feels different from the rest of san francisco. people know each other. they shop here, they drink wine here. what makes it different is not only the people that live here, but the businesses, and without all these establishments, you wouldn't know one neighborhood from the other. el toreador is a unique

restaurant. it's my favorite restaurant in san francisco, but when you look around, there's nowhere else that you'll see decorations like this, and it makes you feel like you're in a different world, which is very symbolic of west portal itself. >> well, the restaurant has been here since 1957, so we're going on 63 years in the neighborhood. my family came into it in 1987, with me coming in in 1988. >> my husband was a designer, and he knew a lot about art, and he loved color, so that's what inspired him to do the decorations. the few times we went to mexico, we tried to get as many things as we can, and we'd

bring it in. even though we don't have no space, we try to make more space for everything else. >> president yee: juan of the reasons we came up with the legacy business concept, man eel businesses were closing down for a variety of reasons. it was a reaction to trying to keep our older businesses continuing in the city, and i think we've had some success, and i think this restaurant itself is probably proof that it works. >> having the legacy business experience has helped us a lot, too because it makes it good for us because we have been in business so long and stayed here so long. >> we get to know people by name, and they bring their

children, so we get to know them, also. it's a great experience to get to know them. supervisor yee comes to eat at the restaurant, so he's a wonderful customer, and he's very loyal to us. >> president yee: my favorite dish is the chile rellenos. i almost never from the same things. my owner's son comes out, you want the same thing again? >> well, we are known for our mole, and we do three different types of mole. in the beginning, i wasn't too familiar with the whole legacy program, but san francisco, being committed to preserve a lot of the old-time businesses, it's important to preserve a

lot of the old time flavor of these neighborhoods, and in that capacity, it was great to be recognized by the city and county of san francisco. >> i've been here 40 years, and i hope it will be another 40 yeararararararararara

adjourned. >> shop & dine in the 49 promotes local businesses and challenges residents to do their shop & dine in the 49 with within the 49 square miles of san francisco by supporting local services within the neighborhood we help san francisco remain unique successful and vibrant so where will you shop & dine in the 49 my name is jim woods i'm the founder of woods beer company and the proprietor of woods copy k open 2 henry adams what makes us unique is that we're reintegrated brooeg the beer and serving that cross the table people are sitting next to the

xurpz drinking alongside we're having a lot of ingredient that get there's a lot to do the district of retail shop having that really close connection with the consumer allows us to do exciting things we decided to come to treasure island because we saw it as an amazing opportunity can't be beat the views and real estate that great county starting to develop on treasure island like minded business owners with last week products and want to get on the ground floor a no-brainer for us when you you, you buying local goods made locally our supporting small business those are not created an, an sprinkle scale with all the machines and one person procreating them people are making them by hand as a result more interesting and

can't get that of minor or anywhere else and san francisco a hot bed for local manufacturing in support that is what keeps your city vibrant we'll make a compelling place to live and visit i think that local business is the lifeblood of san francisco and a vibrant community

>> president bridges: rollcall please. [rollcall] >> we do have a forum. >> president bridges:thank you madam secretary you everyone for coming back to open session . at this time i get a motion to propose the session on the cfo february 7, 2012 a.

>> vice president casciato: i will make a motion not to disclose. >> i'd amend the motion it applies to 2 and closed session 3. and i'll second. >> presidentbridges: so . commissioner, youaccept the amendment ? >> yes i do for both sessions. >> is moved by commissioner casciato. we will not disclose items discussed in closed session three the on the san francisco administrative code section 6412. madam secretary, please open the phone lines for public comment.>> members who wish to provide public comment should call 415-655-0001.

press 187-636-6566 and pound, pound. if you have not done so already rest star 3. a system prompt willindicate you have raised your hand . wait till the system indicates you have been on muted and you may begin comments . we will have a standard two minutes to provide your comments . moderators, we have callers on the line. >> madam secretary, there are no callers on the line. >> public comment is now closed. >> rollcall. >> trendline.

>> we have 6aye's, the motion passes . >> you madamsecretary, next item . >> annual publiccomment . >> members of the board, we've received one emailthat we will include in the general public comment . it isfrom john simpson and it reads as follows . your board members very knowledgeable about investing. i hope when it comes to investing in hedge funds miss gandhi does not go along to get along.

you should divest from hedge funds for the same reason public pension funds like hers in the state of new jersey are divesting from them. ds, you should also stop calling hedge funds return investments.best regards from john simpson, a 46 yearmember . that was the onlyemail submission we had for public comment . >> president bridges: thank you,madam secretary if we can open the phone lines for public comment . >> callers, if you have not already done so press star 3. any callers on the line? >> madam secretary, there are no callers on the line. >> presidentbridges: public comment is now closed . thank you madam secretary.

next item please. >>item number five, action item, minutes of the may 12 21 retirement board meeting . >> president bridges: commissioners, youreceive the minutesfrom the may 12 toward meeting . what is your pleasure ? >> moved to approve. >> i will second. >> president bridges: second by commissioner casciato that we approve the minutes from our boardmeeting . may 12,2021 board meeting . madam secretary, please open the phone lines or public comment. >> a reminder to the callers to press star 3. any callers on the line much in mark ... moderator, do we have any callers on the line in mark

... moderator? can you hear me? we are having a little technical difficulty rightnow . >> madam secretary,there are no callers on the line . >> president bridges: ring no calls,public comment is now closed . >> president bridges: rollcall vote please . [roll call vote] thank you, we

have6 aye's. motion passes. >>president bridges: thank you madam secretary, next item please . >> item 6, action item consent calendar . >> president bridges: what's your question? calendar. >> president bridges: it has been moved by commissioner casciato seconded by mister driscoll the consent order. madam very open phone line for public comment. >> any callers star 3 to be added to the queue. do we have any callers on the line? >> there are no callers on the line.

>> public comment is now closed. >> president bridges: will. [roll call vote] we have 6 aye. motion passes. >> president bridges: next ite . >> item, investment. >> president bridges:. >> thank youpresident bridges . >> president bridges: commission report, i'm sorry, commissioner friends. >> scott heldfond: that's okay bill, go ahead. >> president bridges: for over

to him but you are the chair, i willover to commissioner heldfond seven go ahead bill . >> ahsha safai: >> bill coker: the investment committee meeting was held last month regarding a walk through the different futures of the committee and model. it was an presentation and discussion. it was an educational item only. the board can take the model up as we go forward. >> i appreciate your team organizes these meetings and i think the turnout in the historical turnout has been the evidence is that we are getting substantive and meaningful time information so all the help for the report.

>> president bridges: thank you mister coker on the investment committee. this is a action item only so if there are no questions from i will open it for public comment. >> cfo over made on summarizing the paper written by people from the world bank aboutthe 80 was well done. there were some illusions regarding their experience . we had a lot of bumps on the road to their success over there and although they only usedfloorplans represent what occurred in canada , there were many things not discussed that we would want to be aware of in case we tried to go down towards that type of a model. i just want to point out there were a lot of issues we did not

discuss even though it was a great presentation. >>president bridges: any other observations or comments ? if not, again, the discussion item so now at this timeyou can open the phone lines for public comment . >> if you have not done so already pressáthree. for those on hold continue to waituntil the systemindicates you have been on muted . moderators, do we have any callers on the line ? >> madam secretary, there are no callers online. >> presidentbridges: public comment is now closed . >> commissioner heldfond and cio coker, thank you for really convening a great investment committee meeting all year.

the information was very timely and the research was done well so thank youto the team and thank you commissioner for leading that at thecommittee chair . madam secretary, next item please . >> item number eight, discussion item, reports on investment requirements for retirement fund forthe quarter end of march 31 2021 . >> thank you madamsecretary . i will turn this over to miste coker . >> bill coker: we had another outstanding quarter on top of a most extraordinary fiscal year to date. returns have been truly spectacular. i'll have more to say in the cio report on the quarterly report as well as returns in april and may meanwhile alan will walk us through this item . >> can everyone hear me?

thank you. you have before you the goods andperformance analysis report for calendar quarter january 20, 2020 . this report was generated through last friday the essence b is up another 6.7 percent and we would estimate total fund is up even more than the 6.11 percent bills report for the quarter. that would bring your total fund return through may 31 two 30.62 percent which is truly extraordinary and there's more to come assuming the markets don't reverse in june. as profiled on page 2, we are experiencing massive strength in us consumer demand you'll by ongoing low interest rates and unprecedented financial stimulus. initially as you will recall coming out of the financial crisis, that stimulus was disproportionately led by the

top file in income and benefited household and folks like you that financial assets. in contrast the capability to generate this broad fiscal support enables a much broader participation in the current expansion and you start to see that when you look at the next page because a briefsummary of the first-quartereconomic environment , gdp growth up 6.4 percent . the sales the end ofthe year quite strong . unemployment was down although we added at commissioner driscoll's request, unemployment does not measure people who have left the labor force and aren't actively looking for a job. labor participation which is the percentage of the population that's actually working as continued to stay stubbornly high, reflecting the fact that a lot of americans

just did not come back into the workforce andin the long term that is on what disturbing . the fly in the ointment to all this is the potential for significant inflation and rising rates so if you look down you'll see cpi saw an uptick, 2.7 in quarter one and as of may that year over your number is up 4.2 which is the largest increase in inflation we've seen in decades. the federal reserve as you will see raised interest rates on the 10 year treasury from .92 1.6 percent and the yield curve as deepened and you will see that when we look at the end tax of rising rates on fixed income. the market although the equity markets have done quite well but not nearly done as well . the fed continues to be committed to his stimulated action and you can see with these stocks are continuing to price at a high level.

i did want to read a quote from bridgewater about the environment which would be the ongoing fiscal push into a strengthening economy is creating strong pressures on growth and inflation . the fed could be forced to pull back which increases the risk assets underperformed the economy . there's a wide range of potential outcomes and a rate of risk in inflation than there has been in a decade and many portfolios are not prepared. a few benefit from having taken actions several years ago with broader diverse indications across assets and geography . so with that if we take the step to the next page tojust look briefly at the underlying capital environment , you will see that in quarter onewhich is that first column , everything is up except public fixed income which was down 3.37

percent which is also impacted i rising rates. that's why you strategically shifted what has been is directly public market fixed income into private debt. you'll see over the same period looking at your private debt portfolio later it was up 5.05 percent so strong reward or a strategic action you took a while ago. s&p was up 6.3. our 2000which is that you smallest docs is up 12 percent . private equity was up 13 percent. commodities which influence real asset returns 6.9 everything did well with the exception of fixed income and real estate has alsolacked . if you look at the year everything was up. the snp up 56 percent but fixed income which is the 40 in a 6040 portfolio was only a 70

basis points. small did well, international didwell , real estate lagged so you see a supportive environment for financial assets. with that if we turn to page 18 which is the summary page, i'll give you a chance to get there. the top line on this report is the net time returns for period indicated with the ranking in your group universe of 83 public funds with more than $1 billion in assets .the most important result on this line is we have generated returns that meet or exceed the rate sufficient to amortize our liability. currently at 7.4 percent and virtually every time period reported here though the answer is we generated sufficient returns? the answer is strongly yes

including if you flip to the next page over 1520 and 30years . we've added value versus simply indexing the assets in a global 6040. or a domestic 60, 30, can be in real estate over all period's greater than a year. as bills cio report will indicate we've chosen to diversify our assets with the expectation that in down markets over a full cycle , we will outperform , but recognizing an extremely strong market upswings will be carried up with the market we will slightly underperform the pure groups which tend to have slightly more inpublic markets . at the condition we're looking atwhen you look at the fiscal year-to-date and one your returns . wrong returns thatfrom a competitive standpoint not nearly as strong lastly , the fund as a policy

index which reflects our asset allocation targets and benchmark returns for each asset class. the policy index attempts to mirror what we would have earned if the staff were to always have each asset class a its policy target .and the asset class earned what the benchmark earned. as a result, the difference between the total funds return and policy index represents value added or detracted from portfolio positioning and or manager selection. you can see over the past five and 10 years the next of the results if you compare the top line to policy index has been a very strong 2 to 3 percent and i will tell you counseling a lot of public funds that is a strong result. to put that in a dollar context, over five years the outperformance of our policy,

17.79 minus 10.37 over the 640 is 1.42 percent in dollars that would be $2.01 billion. in the 2.8 percent outperformance versus, i'm sorry. that's versus the policy index. the 2.8 percent of outperformance versus a global 6040 index is or $.04 billion so we had a strategy. we consciously chosen to diversify so we are not subject to reversal and over the longer term that rewarded us in a very strong way. one of the objectives of that diversification is to operate a total fund with less volatility than the markets that sell. protecting the funds from severe market pale risks. the most common measure of that volatility is the standard deviation of monthly returns and if you look atthe two

tables to the lower right , the annualized standard deviationin their portfolio , 7.6 percent over the three-year 6.23 over the five-year, both of which rank in the bottom six percent meaning you are less risk in terms ofvolatility than 90+ percent of your peers . the different plans choose different asset allocations and volatility levels and wemeasure your portfolio efficiency , yourreturn to unit of risk . as measured commonly by the sharpe ratio by the fortino ratio. the sharpe ratio is simply the return above the risk free rate and for this you can virtually think of therisk-free rate of zero with interest rates as low as they are divided bythe volatility . so for five years ,you see your sharpe ratio 1.71 , top two

percent of your pure group, three years 1.32, top three percent of your pure group. the sorrentino ratio is a similar measure but itlooks at return for downside . it's developed by san francisco state professor frank sorrentino and his design look at the return and down. and you see a strong ranking i the top two percent of the pure group .lastly for the year ending reporting one, the investment gain of 29.63 percent equates to $7.62 billion and as of 3:31, the market value for plan assets is 3.06 million is an all-time high very little troubling information here. the underperformance versus peers in that one year is easily understood i having a lower riskexposure . if there are no questions here i've got a couple of comments to follow on compliance and

where theperformance came from. i'd be happy if there are any questions . if not, if we go to page 20. this is a compliance page so the, this chart compares your actual performance in each asset class as of 3:31 with the long-term target range and indirect target. you can see all the allocations arewithin the ranges .they're very close to both indirect and long-term targets with the exception ofprivate credit . i think the board members understand you got into private credit 3 to 4 years ago. it is a private asset class it takes time to deploy money so you're up to the five percent which is good progress but still below the target and you see and underweight to treasury because that's where we put the leverage but we are not leveraging the portfolio at

this moment in time justto show we have approval but we don't have any . all the asset classes are clos to target . most public funds building private market exposures are below their long-term target in private equity. you listen long enough in private equity to be actually at or above your target very welpositioned . any questions on compliance and policy ? if not, if we flip to the next page, 12:22. they aresimply here to point out two things . one, the fund -like most matur plans is cash flow negative . you pay out more than you collected contributions and it has to be expected of a mature public fund.you also note for every period, the investment returns far exceed a