14:06The most notable topic of discussion was the potential for investment in real estate, with board members considering a million-dollar commitment. The current market environment was described as favorable for loans in the 10 to 13% range due to limited competition, enabling lenders to secure advantageous terms. An educational session scheduled for May was proposed to further explore these possibilities and review managers active in the real estate sector. The board acknowledged the importance of maintaining a healthy leverage ratio and discussed the ongoing sale of properties, particularly noting ASB’s sale of $500 million in assets, which is expected to enhance cash flow.

Alongside real estate discussions, the board also touched upon the potential for cryptocurrency investments. Although no current positions exist in Bitcoin or other cryptocurrencies within the funds, there was acknowledgment of other plans exploring Bitcoin ETFs. Concerns were voiced regarding the volatility and regulatory landscape of cryptocurrencies, and a request was made for a hypothetical assessment of how a Bitcoin ETF might have influenced fund performance in the past.

0:10Carrie from Mariner provided a comprehensive quarterly report, detailing market volatility over the past quarter. Market sentiment was shaped by political events, leading to fluctuations in the S&P 500, which ended with a 2.1% gain, largely driven by the “magnificent seven” technology stocks. Despite this, mid and small-cap stocks showed limited growth, and international equities were adversely affected by tariff discussions impacting European markets. The report also highlighted corrections in the previously inverted yield curve.

Carrie also noted the performance of the police and fire pension funds, with returns aligning with assumptions from previous meetings. The police fund’s market value was about $19 million, while the fire fund was slightly higher at $19.4 million, both achieving around 7.1% over ten years. The funds were within their investment policy targets for asset allocation, though both showed slight overweights in domestic fixed income and underweights in global fixed income and real estate. Carrie suggested focusing on long-term growth strategies and potentially making loans against well-collateralized commercial real estate holdings, rather than emphasizing equity investments.

14:06The meeting also covered performance metrics for the funds, which were marginally down for the quarter but outperformed the benchmark. Domestic equity segments, particularly growth stocks, contributed positively, while fixed income investments were down by approximately 2.5%, attributed to domestic segments underperforming. There was a discussion about the potential future yield of fixed income investments, with a forward-looking estimate of 5% suggesting improved performance prospects.

25:27As the meeting proceeded, there was a brief discussion on specific investments in well-known technology companies and the potential overvaluation of equities, especially the “Magnificent Seven” stocks. This led to a proposal to review the investment policy at the next meeting to ensure alignment with best practices for managing equities, bonds, and cash.

14:06The meeting concluded with a commitment to revisit the discussed topics in future sessions. Additionally, there was an agreement to handle sensitive matters, such as a disability application, in private to maintain confidentiality.