Firefighters' Pension Plan Board of Trustees Regular Meeting

special promotion today. >> you with China. You ? ? ? ? Well, funny you, Mike. No open containers. And here I can't do this. >> Hump, you open voice there. But the police under your conference room number by pound or ? >> number, except it. >> If you are the organizer ? ? >> available command >> One, there ? >> you there. >> Peter, that you've got to try. >> That thank you. there are just tweaking your audio connection here. So we might we're going to be back on you and then we'll rejoin and I meet the phones right around 9 o'clock. ? ? ? ? ? ? >> is either going. ? ? ? ? >> mean, you're out there you, correct? >> I >> I just received an email from Peter's stating that they may some technical issues on if it continues and that the meetings you may disconnect from the conference bridge and then reconnect a minute or 2 later. just, you know, back in the we should stay on or we should just come back. But he didn't want to know to do that yet. So stay on. And if there's one for instruction, just want to get update >> shocked >> just thank you, Justin. Recheck your levels here. One more But yeah, we're connecting with the bridge. And so far it seems to be okay. Yeah. I think we can hear you guys OK? So. You can hear us OK? You still there. >> responded that that we can stay on the line, told stay >> Dan, can you hear us? Anyone from Congress? Hear us? I think it's going to be. >> If you can hear us, we're going to disconnect and try reconnecting. >> Good. We couldn't hear you there. Peter. >> The mechanism of just connection there. >> there. >> You can hear can you hear us now? >> And they come in and >> You might have to Bear a >> You might have to bear with that because that we had a little issue here. We can hear you fine. So we'll try speaking up a little bit. >> good. Thank you. ? >> That's with way that we And just a reminder the microphones like a letter from you want to right into good looking man of the dice. We're going to so I think it right into the microphone. >> The men bought then. you can your question or something. If we have one, I can hear a little quieter related. If you all can hear >> But all >> You know Yeah. credit. ? ? ? ? ? >> The parking lot. They're just the kind of snake kind figured you got here really The park across the street from sticker in the window. we'll see what happens. Yeah. And he said that's perfect. I use them about that and restrooms. find out if we can park across street a law. That's where stick around. And they told me that years ago, the and anything which I did, I do. You've got its cities. The mine's on my. I just keep mine on there. Wind chill and so cracked. You have I used I just I stuck it on just to make sure because I'm which you told before. I didn't know which one I'd be bringing to the meetings. So it's kind of hard to. When you by and just want you to know, we stand the big to be looking ? >> I look see, isn't. ? this it It's funny. My wife is going through the desk. Clearing things out. And I guess be here. And with that conference had bunch Caesars Palace Nelson. Now she said you want to take these to getting the money because we just have so maybe just people Sure. Now students are going to come in. Caesars Until you're tired the season. I actually had one going in my life. I like you better without it. I felt like I like me better with it. Pace's you like you're 100 >> And she's like which one really matters right? And he says you don't think you're 150 years old. >> That's what I around a bit. And around 5, 7, just too scruffy for me. And I'm doing this and it drives me crazy. And I got yeah, it's right. And you that. It can. You have been talking about man. just replace it. ? >> That's what I say to questions. You know. ? ? ? ? Next Wednesday. get a fine line here. Well, we're but he's will be here. Are you sitting in for her okay. Stuff. He's got to think that the man Spring is present viable >> Just be prepared do the roll. Call. Yes, sir. Put you on the spot. she because you're you've in Ames in front of you, chair Gabbert. Vice chair, meeting. ? ? ? Ministration had do. Our key at club. There's probably. 80 people in the audience. I started out. Start My name's Mike and I'm an alcoholic. >> from needed. >> Haha. >> Everybody laughed. And then one guy stands up. Like its OK, have been there. Yes, at a buy a Haha. Haha. ? ? Now that's the way it is. Every morning. Now there's a crash that statement just on ramp to 7. >> You want to go into the meeting in the building next door. >> You're welcome. close to from City Hall. Most I was like shut production. I this was the most well. Now about here for. >> Yeah. Then they're redoing 41 over here. >> And by the airport, students all in today. Yes. >> Well, they are a start. Construction in August, September, October to get ready for the snow birds to come. make even worse for the next 4 months that well. >> I think that you about an hour. >> They start working on the bridge is here to go over the island and November December so that they can cog for January. make sure it will be ? >> Hamilton is coming on the interstate when. I got lucky through like Paul. And side of the She got on the river. As soon she got on traffic. 75 in Tampa. ? >> 15 at camp and I oh, my gosh. That's terrible. feel about about >> Good morning, everyone. It's 9 o'clock. We'll start the. Call. The meeting to order for the firefighters pension Plan Board of trustees for our regular meeting for October 22nd. First on the agenda is the Pledge of Allegiance and we can all stand we need ? United States of America and to the Republic for which it stands. One nation. Justice for all. ? Thank you, Chuck. The next is the pledge of civility. And I'll do that is as we may disagree, but we will be respectful to one another. We will direct all comments to issues. We will not engage in personal attacks. I know this board has done well in the past. So we look forward to continuing roll call. Chair Hartley president vice chair just hasn't secretary Treasurer Rusty Snow, president and trustee Mushrush. >> Present. >> Thank you. Public input. There's nobody in the except for Scott Owens will be speaking later on the time, if it's not a from kind on the line, a hard time hearing. >> Yeah, we have a little bit of an issue with call in today. So we're going to speak as loud as we can, but we can adjust because we get a bunch of back feet. So they're going to try working on it another time, but we'll do the best we can today. ? All right. Next the agenda is 6.1, the approval of the minutes. You'll notice in your packet that those are the minutes from our September 24th meeting. Anybody have any comments or input regards to minutes. ? Here's that. There has a nothing to add or to change. So entertain a motion for the adoption of the minutes for September 24th. Make a motion to adopt the minutes. Time to move in. Second for the adoption of minutes of September 24th that there's no other discussion will roll call approval vote Chair Hartley. Yes, vice chair Joseph. Yes, secretary Treasurer, greatness. >> Trust the snow. Yes. Frosty mushrush us motion passes unanimously. They're going that. >> or minutes will move on. Then to our investments performance review. So Congress were it to you and going to discuss your. review of a performance as of September 30th. The only thing I wanted to. To add, if I can before. You get started, is the front cover. Of your portfolio? Shows Sarasota County Fire Department emblem. I would just like to ask because the Sarasota counties no longer. >> The inner local change. So now it the pension plan for the retired firefighters for the city so that you can put a city emblem on there or we can get you. The old fire and one for the city of Sarasota. Either one is fine. So all have staff to direct to do that. For the next. Next year. >> really we mentioned we get life. be ? >> they all men with Congress manage Matt and I'm the senior regional director covering Florida on the line as well. verify know was a regional can cover in Florida as well. We have Chris, why and our president here Congress on the line with thought and then find we are 2 and the win. >> With the committee chair for the role strategy at Congress and portfolio manager. And then Zach is the F and portfolio managers. While. >> All stopped there and see if there's any questions. Otherwise I'm going to turn it over to Zach to do the update. >> No questions. I only usually let everybody know we we have a review for about 15, 20 minutes and then we'll ask any questions after that. So you that you have the floor and you can continue. We can hear you. Well, and I understand that we're very light on this. And but we can hear you. >> Great ? >> Sam, thank you very much for the time and opportunity. going to turn it over to in that. >> good morning, everyone. >> you, with ? ? >> it's all part of year. It was really a lot of optimism that. Driven by continued growth of really food. They cannot it you make the play a different trap. write that, you know, that the Fed really way and that to really the sense that But the year. >> leak happened in late January at that was just really on knew that, you know, the Chinese AI helped develop their own version of a I which with at lower costs. And that is why a lot less a few days. However. So this news release the technology sector as well as isolated company. Fire out. But thankfully, I've noticed that was really lived and what thought, if we found And within that get news, you realize that model really could expand the overall market to see if that it for like the world area. They still investing in AI and we slow down that In fact, indefinite and Apple to stop before. >> That and that it expects to 350 billion dollars here. >> And 250 billion last year. So this is a 40% increase. NASA investment into that safe at the park it this year. next and sending it really could fired up next as you know, energy half the that most really my hope They're industry sector. And that that really the is as you know, out the market right now. It's really around And really created lot of around that. The company ability to be able to get rid any profit. a lot, you know, Liberation Day, which really good April. think within we saw market go down But it happened cover Get the hair and even the information implementation of that Well, I really good to go. Pak that after play the company's outlook, which really include, you know, how they got half the labor that they need. The inventory have in business at I think look at it all from a perspective. We have seen the impact of inflation has really, 5 AF. How come they want to out there and fact that we have our of income bracket, we have full and complete a back on that day and they really allocated it purchases, more support me for while. So but on the side it up to see the higher income bracket defending still at very, very solid. They're ones that are really holding up the overall market So it a, you know, a label it. I hovering around which is really low Earth that, you know, that love for Africa or So if you're in a very good day. >> If I it. you some right to top in the labor market and we have the company break the law not And now playoff happening. So that we can But we have right now the it with one part that I that I great. So it's not to see a lot of that but But on the right track that the Fed has recognized and a feeling very late. And the great to have really important at the head of the which actually started last week. So get out, you know, know that buy all the volatility that we the 5. let that. Expect see can actually put 3rd quarter. So really felt like on site going to be little cold fact that we have seen that in the market right now. here it there any questions know is that people in >> Yes, this is a this is Scott Owens. You have a just a quick question. Your benchmark is the Russell. 2500. Is that correct? 2500 growth. Could you talk a moment about percentage of companies and the 2500 that have negative earnings and and how they are affecting the the the benchmark returns. What percentage of the benchmark returns are driven by companies with negative earnings? >> So so 40 cent of the rest that are non not profitable. >> questions. >> What percentage of those come wonder? What impact are they having on the return? So are they are they are those non earners a driver of return with a participating in this big of market than they've had this quarter. Are talk about that? >> Thank you for that question. This is fact out of the portfolio manager here working closely with on product. That's a great. That's why I'm from I-40 that well, the portfolio. How a performer relative to the benchmark to the course of the year of our I think that question high and I'm pretty nicely here. just High I fly to our live. That can be disseminated. I get value of the portfolio about their key 0. 1 million dollars. We remain fully high quality growth in the I a area the currently on 43 portfolio. And then moving off the execution of that for I'm going to kind of that, which is not like 3, by the I'm going to kind of walk through of the year day calendar year to date performance portfolio, going court by water talking about how we perform about. It's about 2500 grow throughout the different fees. That kind of move the benchmark around throughout the year. Kind of man, man it. For the calendar year today. The portfolio has returned 11 and a half percent benchmark that 10% and a very up and down year. But through it in able to outperform. But not during the drive down the red dot that environment while keeping during that period rapid price appreciation. But I think it's been kind of affirmation of how we affect our. You know, I call the call you to perform. It, you? Of this year. At the markets started off on a rocky, but he has boost too. The benchmark about 400 growth that it fell 11% during that time period. However, we outperform because all 4, but out points. But with our largest pickup of the it again driven by revelation hitting the market, which really took its toll in February and March. If you're huge draw down in that we acknowledge E the technology sector 19% in the benchmark in the 1st quarter. If expression of bell. 12%. But that out. But again of our portfolio, kind of construction profit, aren't that is that had to be underweight the growth here year, higher beta type of a cop. So they're in that market right now. Yeah, it's pretty significant outperformance specifically in technology, a discretionary and even Well. may off that in the 1st quarter. Why are all the within real? The sector tend to be in the air. It will be a Hear that. And kind of make up some of that beta, that any good health. When the portfolio, it kind of where a lot of sure I of Then it fell in the 1st quarter. the down a bit. But overall, portfolio outperformed because of you. And think that I mean, that that the fact that eat a rapid effect there and with industrial, it's not only national, but kind of allow that he let her outperforming throughout the course of the year through different environment. And then he quickly on the 2nd quarter pointed out that it kind of it, the hair care in the first the market again. why that is so 30% in the first 8 days. Again, that is when we delivered a performance I capture 2 minute stretch Erie, which is a factor that probably bows to care. Within our consumer. Only whole company it all. We are tracking the fight for either very stable strong balance sheet. Generate relief free cash flow, and the jury that period the markets track. But the market can't to rotate be more defense. That means would benefit of that during that got and you can move forward to mid-April. That kind them are. >> To get picked up are looking through. >> All snow, And if that they became a period rapid price appreciation from to the end of 2 feud about 2500 round about 25%. And yet we managed to outperform in 2 to 5 got 208 points. So during the first day we gained ground throughout the remainder of 2 we kind of get a would go back and I think our ability to keep pace in the market. again, our goal that is again, where we take a lot of us your check of that. And if the market kind of got over the immediate concern in Hara, we've got those of means relief for him. I'm very strong way looking of our companies that we own with an industrial. And the first at 2025. them. We're learning per share. 75% year-over-year. There are 80 for shocked learn for sure. 45% year-over-year right for 30% year over year. That the to your tax money. It allowed at unable to keep pace. >> Yeah. During the on the environment. >> So why do you keep up with point 3rd quarter? It's good that the beginning of your question, it kind of really when the market began to take >> into the lower quality Haifa bucket with Kenny fact, wrote point that it's not really can be said. My environment, not the most to For I think that we would definitely that. Yeah. I think this trend really pick up during August and September. >> It came fear that would easy pick up any from the one thing when they packed. It continues to 500 billion dollars buy for the benchmark and investors farther out on the risk that term cat and investors were looking to won a generation type of cash company, all that they that lower quality really after 4. And it could buy that. hard up. You can let our kids to that. And a lot of that, Steph, what they had one for us in the order and led to a year from there. We did manage to that get from from our Holding. But nonetheless, the general and Harry to data and will them more in technology, consumer and healthcare minor Thank that fully what we did that given our blocked buy that 3 have fun here we managed to stay the our ability to. left and that shot. I kind of want to hire need to work end of the and but not my guy. You know, our focus capital generation and company far track be. And lastly, just cannot for the Asian the into the 4th of the year. That I look at our lady of best part. I would just say that it looked fairly from the beginning. then the year. >> Not a lot has changed. We've got about a trade 2025. >> County here that is >> so >> trending toward about 25% turnover for the full year, which again, I >> But how we operate it Intend to trade on the number of me in absolute terms. We've added second in 2 are stable and the track that from energy industrial. However, that actively the ever make that We carry our large overweight >> consumer staple well, underway financial the right. that there is for the question. >> Good morning, Mister Zeller on Page 3 of the report. If you had to take a moment, too. The traverse back there, please. >> are you just stated or yeah, could it. >> Back if you can, please turn back Page 3 of the report. >> The very first line item for the portfolio. If you could confirm that that is the City of Sarasota is holding. And that the one-year return is 11.6 1%. And then that one year period is October. First 2024 through September, 30th of 2025. >> Yes, that's correct. >> Thank you. I got a question on page. 22 Zach. Which is the historical performance. Can you walk me through 2021? Why was it so significant? And were you defensive in 2021? ? >> Taking review >> To find why? 22. If you can go back to the year 2021. and talk a little bit about what happened that year. If I heard the question, right, you want to know where we defense of that year or what were we doing that you're could you repeat that quickly, please. >> Yeah, I'm just looking. That's an anomaly year because it was during a coven. But I saw the significant return compared to Russell. 2500. I just wanted to I just want explanation of that. >> here so when everyone was really he shakes out to here can market rest, high quality, more company. It very, very well. In fact, not only did growth fully out for that up for months because if if if really to our process in our you know, I can drill down on what worked, what didn't work, but it nearly all the questions that really helped here. >> Okay. Yeah. I was just wondering what would the driver was? So great stock selection obviously in 2021. >> The >> the other thing is I'm pretty sure it's a typo, but we started with more than 8 8 million on Page 2 says Congress was retained for 8 Million. I think we started around 12 million correct. >> there's a there after. >> million. But there is it deposit for 2 point something million. >> I don't remember historically, but I doubt in one year we went from 8 to 13 million views. >> I think we say is it was initially provide >> I think what you're saying and we'll have Anthony, maybe you can offer some clarity. I think there was initial by and then there was an additional Biden taking up too. I think about 11 or 12 Million. When we made the change probably from the other and rebalance our rebound You know something, okay. It in here because when I saw this on fly. >> like how could they make so much in such short period of time? And it shows 2 point something million dollars somewhere. Yes, so makes sense. We look my report you have to look, we can look at it. But >> there was initial inception was 8.9. And then you have net contributions. That's money going in at 2.5, 9. Okay. That was the additional money that was at an end. As the board have any questions for Zach or Nancy. ? We appreciate your review. We have no other Thank your team. I know we just started a year ago looking at the one year performance. You're right there with the index and we your company, your firm. >> There's been no changes in the overall management, correct? We might lost them. So yeah. Well, if you're still listening us, we can't hear We appreciate it. And we're going to move on. To our presentation with Graystone consulting a quarterly Performance River Review. We'll turn it over to you. Scott. All right. Thank you so much. Appreciate it again. Appreciate the opportunity in present everyone. >> At of was so we've had several quarters. We've been had a lot of moving parts. A lot of things taking place at the last meeting that I attended. We redid the investment policy statement. We selected a manager. We made alterations, I believe. And Anthony, please correct me if I'm wrong. I believe Chairman Hartley came in and signed the updated IPs on 9.24. and that which means we have to wait 30 days to do anything. So that puts us about now. So Friday was the 31st Day. This coming Friday. The >> all spring will receive 10.5 approximate million securities from Brown. It will receive 115,000 in cash from Brown. And 6 point 7 million from Sawgrass for compliance with the IPS. They will begin trading on Friday morning. >> Fantastic to all of the things that we worked on over the last several quarters are going to be implemented this Friday. So so that's great. And so that's the big move. In part, what's going to be the total then? Again, you said 6.7 in. 10.5 million in securities >> 115,000 catch. >> And 6.7, 8, 6 million, 6 million, 786,000. >> Again, the proximate numbers and can okay. The initial calculation was The date of the allocation for exactly 10%. The plans holdings to go to the core strategy. >> And so what we're going to have is we're going to large cap value managers, one large cap growth manager and a large cap or manager. >> And we should be on that that we should be pretty close to all of our targets on that because we have the updated IPS. >> Short of real estate, which we're we're not adding to. And we're underway. Real estate. Everything else should be pretty close to the targets. Forget starting questions, comments, concerns anything at all. I do have one thing I wanted you to go to. And I was looking at this last night on Page 2. >> I I and I understand what our primary objective is trying to meet our Target index. But we're also trying to get our secondary objective 3% per year. Coinciding with the CPI Consumer Price Index. Can you let me know or tell me what the come summer price indexes? >> right now is about 2.9 3% 2.9, 9, 2, 0.9, 5 summer there. So it's about 3%. Let's call it. Yeah. 3% of that they 6%, which is a little under what our assumption rate is. And so we're we're exceeding that so long as we're based on that now. And and the fence trying to get it below 3. targets, too. So CPI, 1.1, 9, right? And so that was that's inflation. And so they're targets 2% right now. It's tough. It's been stuck in 3 for about a year year by the year. So, yes, we're we're achieving both of those targets. Perfect. Thank you. Yes, sir. Thank you. You know, again, you know it's going to be a repeat of of last quarter, really when we talked tariffs and and tweets and and it's it's still a lot more of that. What you heard briefly by this manager is they talked about how the economy shrunk and there's there's a difference between the market and the economy. So the economy is what's happening. That's GDP. That's unemployment rate. That's, you know, inflation. That's the economy. And that's that's pretty strong right now. As you said, we were fully employed. CPI is about 3%. So that's inflation. It's not egregious. What we had is we have wages go up during when inflation starting on that we have this wage The cost of labor went out and then inflation came down. So that was pretty good, which which means as inflation. So here's this is think about it this way. If you have something at a dollar. And the price goes up by 10%. Inflation. So dollar tent the next year. If it goes up by another 8%, just call that a $1.18. the next year. If it goes up by 4%. Let's call that $1.22. now and the next year. It goes up by 2%. What's happening is inflation is coming down. But that price is still going up. Right? And that's what people say. Well, and we can't afford this. We can't afford that. I thought, you know, prices are going. There's a difference between inflation and price. So unless there's negative inflation or deflation prices are going to continue to go up. Right? So. So what's happened is the economy continues to be strong. People are working fully employed were 70% consumer driven. So as long as that's happening, that's going to be pretty good. And as inflation is going down, those prices are still going up. So what we've seen is an increase in credit defaults. You an increase in the use of credit. People trying to stay ahead of it. And you heard Nancy, I think, say that the the higher income our well that you have said this a couple times now over the last 2 years and called the K curve. So people who are doing people are high income earners, they're doing fine. They're spending their money and find inflation hasn't really affected them that much. But it's the lower income earners. And she said that they're not mine wants anymore. They're buying needs. So they're buying needs. And there's a higher use of credit. That's to be determined. What's going to be the impact of that and how we're going to fix that, right? So its that it's the it's the bottom. 3rd of of consumers in this country that are really being negatively affected about what's happened over the last 4 or 5 years where the top. Hasn't hasn't been affected. That much has an effect. It hasn't affected their buying. So and then and then you have the impact of of the market, right? So the market. Is is what we're going to. It's it's tough. You know, all of these indices that we're talking about and one of the that's why I asked that question. What's going on in the small cap space in the mid cap space 40% and the Russell 2500 are losing money. 40% of the companies are losing money but the but the index is up pretty dramatically. It's doing really well. Well, there's there's there's 2 reasons for that that it's done so well. And she talked about when they came off that bottom. So after April up the Liberation Day, the mark, the market tanked. What goes down the most? Usually what comes up, the most rate went down. So it recovers. Well, those are your low quality. And then on top of that, what's happening in the small and mid cap space? So we talked we talked about the Max 7 for a decade and it sees large AI companies. And and she talked a lot about the AI trade. What's happening is? Well, a lot of people already have them They're already there already saturated with that prices are you know that they're already the valuations are calm, stretch. So market participants are now looking for the next best thing. What's going to be the next in video, the next Palin tear the next app love. And that's up for 500% of the year. So those are all of those once midsize and small sized companies. So now you have the market trying to find that next. Best thing, even when they're not earning money. So it's making the price go up. I say all that because that's a cautionary tale. As we're investing. USO has a close plants pension plan. When you're investing, you do not want to buy things that are not earning money. You want to buy profitable companies. So sometimes when the benchmark is going up and you're not keeping up with that, that might be OK in those type of environments. Those are typically short-term short-lived environment. We heard Congress say that their period of Outperformance was when the market went down. Why we have them, they're not there to try to find the next best thing they're there say, hey, let's get that CPI. Plus 3. Let's get the 6 point. 2.6, 6.6 with the last amount of risk. So we saw 2 things happened this year in the small and mid cap space that off of the bottom. There's a big bounce and then we're seeing I don't know how long this is going to last. I know can't last long term because companies have to make money but it it becomes scary. When you start seeing companies losing money, the price keeps going up. You hear me say it all the time. One of 2 things are gonna happen either. The earnings have got to go up or the price is gonna come down. No matter where they are. So that's something that we're keeping released. And that's that's why I really like the fact that we've got high quality managers managers to focus on high quality and that space. If we take a look at Page 4. How did the market do? So you take a look from the corner. Another good quarter. But again, you look down at the bottom, the Russell 2000 that are small companies up 12. There's your best performers are small. Cummins was the last time that's happened. If you take a look at the 12 month data. All good numbers. But you can see the big dispersion between value and growth again over the 12 months. If you look at the Russell 1000 value versus growth values up, 9 growth is up. 25 in the mid cap space values up 7 growth is up. 22 and in the small cap Russell 2000 values up 7 and growth was up 13. I mean, those are pretty big dispersions. If you out to 5 years. Pretty close think so. And that's that's also representative of what we've seen this year. Right? So if you think about. Where we are on the on the year to date number for our portfolio. Year to date. Number 4.4%. You think about that for a moment. Think about where we were in January. Things were great. And then in April, it was a disaster market down. 25%. And then it was up. That's up for its all-time highs. Again. So you have a lot of to it. And we've been saying this. The law is very tumultuous in the market. But if you just, you know, hold your nose and enclosure, eyes works out that averages out over the time. So it works every single indices. That's what you're seeing right. And then we can take a look at. Let's take a look at international on the next page. Page. 5. Same same kind of idea. Look at international for that for the U.S. dollar for year to date up, 25%. If you look at year to date with any of our U.S., none of them are that high is nearly double. Most of our U.S. returns. So that was the last time that that's happened. So and that's why we have diverse portfolios now where it gets really interesting to me anyway, as if you look to the right, so where it says local currency year to date, that's only 14%. So what that means is their stock market. 14%. But our return was 25. Because over that time period, the value of the dollar declined. When the value of the dollar decline. That's a tail wind. Our benefit to us. Look for the quarter. Their market was 5.4. The value of the dollar actually went up a little bit. As we have a lower return. 4.7, 7. The value of the dollar is going down because our interest rates are short-term rates are going down. So that trend should continue. We've talked about this for 2 years. How the value of the dollar is high relative to its historical and high relative to other currencies as that normalizes, it's going to be a tail wind or benefit us as international investors. Additionally. If you look at the valuations and the international markets, they're stretched as they are in U.S. markets. They haven't gone up yet. They haven't participated yet. So if they continue to have, you know, 12 month number, 13%, right and local currency, 3 year number 17%. And the value of the dollar continues to go down. That should be that should be a A contributor to the portfolio, which is not something that we've seen in awhile, which makes sense the U.S. large cap market's been the thing. If you have investments by design, when you build a portfolio, if you have assets that do not correlate, that means of this is out. This is not going to be up. And when this is up, this is good. It's going to be the opposite. That's why we have these alternative investments in here. And then lastly on fixed income. Take a look at the year to date. For the Bloomberg U.S. AG up 6%. Take a look at the 5 year number 5 years as negative you 10 years. 1.8. So it's when we have a target of 6.6 and you can get 6% in fixed income. That's a home run for us. We've had to overweight the risky asset classes because we're only getting one or 2% on fixed income. It's one of the reasons we wanted to alternatives. That's one of the reasons we went into real estate is because we were we were getting a very low return on fixed income. And when you have a low return and fixed income, let's say you're getting one or 2%. Rates have got to go up at some point when rates go up, the value of bonds goes down make sure return to go down. So we went into those other asset classes I could imagine a scenario with this plan, especially close plan risky versus you all are that if we were getting 5 or 6% on bonds, maybe we get out of walls. maybe we'll put more in fixed income. We're almost there on. And then, you know, we can. The rest the portfolio. So that's thanks to think about going forward. We're not there yet, but things to think about going forward. So what does that mean for us? Take a look at the portfolio. The one-year number 7.9, 4 net 7.4, 6 versus the benchmark of 11.3, 4. So a little bit lower return. But well in excess of well in excess of our of our targets, most are targets. This breaks it down. If you take a look at the quarter and out, what I'll do is I'll go to the pages that shows the risk and return so you can see the difference. But, you know, you have a couple we took the take a look at Brown for the quarter. Mike Brown, who was a big hit. 1, 1%, versus the benchmark in 10 and a half. Sawgrass 5 versus 10 and a half. If you take a look at what we just talked about, Congress, 6 versus 10 and and Dr Zee 5 versus 12. So during the quarter there was significant difference returns between some of the active managers in the benchmark. But for all the reasons, especially in the small and mid cap space, when you have low quality drive the market, we still want to be part of that. ? Any questions on any of the returns. I do think it's important to note we're at 180 million dollars. We have an update on that. Anthony. As of as of September 30th, we're at one 87. 28, I'll give you an update in one moment. I do have a quick you offered. So on Page 7 preview the GRAYSTONE report. has a 11.9 5% year return for the fiscal year. That just ended September 30th. As I asked Mister Zeller Congress. Yeah, that's a gross number. Congress is reporting an 11.6 1% gross return. >> So 3rd of a percent. If you wanted to review that discrepancy, you know, let me check on I will say that. That's not uncommon depending on Well on, Ali, that is the accounting, our our >> like dividends, for example, or counted. And this on our valuations versus their valuations. But let me check on that, Anthony and have a Miami. Let's take a look at and see what that 30% is. But it's not uncommon over short periods of time. A year as as you get longer. Typically the the align. But I'll I'll double check. I want to give you an answer. >> As of the close of the markets on October, 15th. The total market value was 176 Million. 259,000, $483 and $0.72 and that's a great number, meaning we've had fresh numbers from UBS for both of the homes. So really within a short period time at the end of the fiscal year, we have the September 30th figures from. UBS. >> send you the ascent of I'll send you answer to that question regarding the differences are, Let's take a look at how are allocated so and this is going to change. This is what you're going through them individually or no. You just want to I was going to do that with the risk page so we can talk about the risk talking to each individual. One. But if we look at Page 13. Well, we'll see. Is this is your allocation. We were kind of waiting on all of these things to rebalance the portfolio. >> we're going to be underweight. Real estate will stay underweight real estate, which means we're going to be overweight. Everything else by little bit. All right. So let's talk about all that. The performance of individual managers. If we turn the page 14 wage, this is your large cap value manager. And again, it's done a fantastic job. Wedge just continues to be very consistent. Performer. >> If you take a look at where they are on that at that chart up on the top right. Have a little bit higher return with a little more risk. Always go right to that. Bottom line and say, OK, let's look at the return. 11.3, 7 versus 8, 9, 7, the standard deviation and beta, our little bit higher. That's high risk. But then you look at the up and down capture. The that that more volatility only on the upside, it's actually less volatile. On the downside. You can't you can't draw it up any better than that. To have 105 on the up. She got plus 5 on the upper -5 on the Dow. That's what's going to give you that big golf of 2%. So that's a that's a home run. Hudson, which is a previous age, UK Saint kind of the same story. They have a a little bit higher risk about the same return since inception. So if you look at if you look at their annual lies, number worse as manager and last performance, something kind of the middle left of the page. What you see is the since inception date within 15. That's a little bit behind. And then the 3 year number is a little bit behind this. Bottom line is only the since inception number, right? So we've you know, they've done very, very well over every other time frame. The 1, 5, 7, 10 fiscal year to date. A little bit more of Over that particular time. We don't like to see that negative alpha. But that's over. That's over that since inception period. If we look at them over a ten-year period, they've corrected that problem. And then Sawgrass. So you know, we talk about them a lot. They're very consistent manager, very, very low volatility. If there are about 20% less risk than the benchmark that didn't that there are 20% less than that. If you look at the beta. The bait is 0.8. That's 20% last year and standard deviation 13 for 16. If you look at the up and down capture, I mean, it's about 20%. Less volatile. So what's again, you know, you get the since inception number where their little bit behind you. Take a look at the one-year number there. Lot behind 15 percentage points on 24 million dollars. That's that's. Now when the market goes down, they protect. Right. And it's if if you if you are below 6% or if they were in negative number, I would there be a sense of urgency to make a change on something that but since we've 11 and a half percent and over the one-year number, which is behind dramatically. They still May 10%. If if the market was 10%, they were down 5 and that would be a big problem. But there's still earning money and they have a they have a positive So for the risk for the return you're getting you're getting a lot better train, often risk. Brown is the manager. We that we're actually getting rid of on Friday and you see they have that, you know, big negative off. >> We're laughing at that Yeah. >> Yeah, it You know it. They got 10%. I mean, but you you you're taking too much risk. So there's a big difference. You've got to managers here. Let's just take that into account. You've got to managers here on the one-year number Sawgrass and Brown, both of them got 10%. We're getting rid of Brown and not Sawgrass because Brown took too much risk. Right? So not a lot less risk, right? I mean, they're they're more risky. return with more risk where song grasses, 20% less risk. You see there's. And so there's a big difference. Not just about return. And then Dr Zee the Prince races there in the small cap space. Again, you know, I look at this. You look at you look at the chart. You look at the since inception number. They've really added a lot of value. But then you look at that one year number. And so that's why I asked those questions. You know, when you know, I look at all the stuff and try to figure out what in the world has happened. And when you take a look at what happened after people off of that, bottom and then you take a look at what's happening when you have 40% of the company's losing money. You're active managers are not going to have those companies in their portfolio. You know, and again, it's it's very concerning. Very concerning. Like I said, it's one thing if you're making, if you're so there's a 13 percentage points different here. There's a 15 percentage points. Difference with Sawgrass, but they're up 10. So it's less. If you look at this, these are down 5. I mean, you're losing money here. So, you know, we've got a call scheduled would brz I try to have before me and just couldn't make it could make it work. They've got very good long-term numbers. I'm I I I can I've talked to other small cap managers and they're going to say it's been a low quality rally. And if that's the case, we'll see what happens in my questions. Okay. Well, how long low quality rally going to last and what are you going to do to either protect us from it? Our take advantage of it. And you look at their inception number. I mean, it's. >> Yeah, I'm really hoping that. This year's just been a bad year for high quality small-cap managers. The question is, is it going to last? So the reason I talked about off of the bottom and then I talked about the AI trade. Off of the bottom aberration. That's a one-time hit right? I trade it could be problematic. Market participants, buyers continue to look for the next best thing and don't worry about quality. That could be very problematic. So that's something we've got to keep an eye on. And then we would have to make a decision either to underweight or go to a benchmark or or something else. Artists, we might decide. We don't want to be a part of that at all. Does that make sense? >> Just a second to Lee, though, when you see there up at, I think it after and their offense just. I think it is it. So I want you I want you to take this into account. >> So there that's a look this year's terrible. The sense are the 10 year numbers say, you know, it includes this bad year. That's how much better they were doing up until this point. I don't think I don't think the managers, you know, get Dom overnight. I don't think, you know, they didn't change their style. Nothing happened. But you know, we had a The other thing is called Nate who's with yeah. I said tell him all the kind of can't go on vacation. This winter's right >> right. >> Well, the other thing that's happening, as you heard it is that these smaller companies, anything that they get from overseas is being very disrupt the right now because of the tariffs. They don't know if they're going to be if there's going there's going to be in 10% tariff or 50% tariff could have an impact on their profitability. So there's it's a mess right now. I'm hoping that this is an anomaly. It's a short-term issue and that know they'll get back on track. But it's you know, it's one thing to have make less. It's another thing to actually lose money So this was a lot more concerning. We heard from Congress. Lazard. So was is you I you know, I was hoping to have better news for them. If we take a look at Lazard, this might be our next search. You know, we've had them for a long time now, when we look at the 1, 3, 5, 7, 10, that that's all that, right? That's all a little higher risk. They're up and up and down captures upside down. They don't have as much. You know, they're not doing as well as the benchmark. But when we look at them on a year to year there, what happens as we look at them and then they'll have a good year and like, all right, let's get a little bit of a longer leash and they'll have a bad year and then is so impact right now. They're in a bad year. What I'm going to recommend is that we take this is to search, not necessarily recommend a change. Let's see if there's something better out there that we might want to consider. One of the reasons we have Lazard or have had Lazard is they were supposed to provide a lot of downside protection. If you look at Lazard over over different time frames their standard deviation, the risk is lower but not hasn't been right. So always hear me say it. When we hire a manager, we hire manage because we want to do a specific job in the port fall again. Sawgrass is a perfect example of that. They their risk mitigate ERs. We know they're not going to knock it out of the park. So that's why we hired him. And that's why we're keeping them Lazard. We wanted them to be risk mitigate years, but they're they're not doing that. And we're not making the return. So please, the board. I'd like to put together a search of a take a look at managers and now, you know, bring several that have a higher returns. I want to have lower risk. And then we can always use the benchmark. ? I think it's a good idea. I mean, I've I've always believed >> Due diligence when. Our other international manager. >> So this is interesting. So if we would look at Renaissance International growth manager, so a renaissance in the past we've talked about happened we have and they've turned and they've turned it around. So this is why this is what I would just because the managers out of favor. I'm not always on board a changing it right. Because in order for manager to be the benchmark, they have to do something differently than the benchmark. They're not going to be right 100% of the time. And that could, you know, but it doesn't mean they're not going right over time. Renaissance is a perfect example of that. Renaissance takes a 2%, 15 different holdings, roughly and then they make the trades accordingly. So if you have a, if you have a market that's concentrated, they're going to underperform or if you have a market that has higher percentage and several names and they'll have to pretend they're underweight some of the names that are doing well, we're going to underperform. But over time that should work out. And that's exactly what's happened there. There. If you take a look everything that we've looked at them before and everything was wrong, negative alpha, all that we said, let's get a little bit of time now. They have a positive alpha up and down. Capture. It's they're both elevated. But the up captures higher than the Dow. So that's what gives on that positive alpha a little bit more risk. But they got the return. That's commissioner that. So it's it's paid off for them. So again, I'll do the search for Lazard. That doesn't necessarily mean we're going to a change will just we're going to know that. We'll look at each years performance. Find out why they're underperforming right now. And I think we had this discussion at the last meeting, but I think isn't was are coming in next month. No, they were just here. They were just hear that, OK, what did they say? High quality. They have had local, right? Yeah. That selection. We talked about them in the last meeting. Yeah. And we didn't take action because you want to hear from them. Is that still the case? I mean, the I mean, are you okay with doing the searcher? I'm okay with that. But mean, that's what we. We're paying you to get less opinion based on what you starkly C you think we should do search to search my opinion? Yeah. I want to get a search where what's out there and what's been happening with other companies that's so that should do search doesn't necessarily mean recommending a change. What it means is why are they performing the way they're performing compared to the benchmark and other are other managers doing something differently right? So actually, in the last 5 years. On a fixed income. fixed If you take a look again, you know that they've just a steady, any right. They've got a little bit more risk. You know, when you say more risk in fixed income, it's a different animal. You go from 4 to 5 instead of, you know, 16 to 17 that volatility. So it's just a little bit more. They continue to have just a little bit higher return slightly positive alpha, you know, just chipping away. The one-year number again is 2.9, one to 3 number 5, 0.2, 6. So it's nice to have those positive returns in fixed income. The 5 year numbers negative, right? So far, you know, so it's nice to have those when you go from low interest rates like we talked about it, you keep interest rates can stay at one percent ever. They've got to be 5, 6%. But going from one to 5 is painful. That's that. That's that 5. Your number negative. And then real estate. You know that it's very nice to see that it's finally has a positive return. I'm Anthony, what did you did? You have the the benchmark return. For the NEA Crieff. As of as of the quarter. And we didn't have this. When we printed we did OK, that's usually well last month. flags. But for the for the one, you're number 5.2%. So if you remember what we talked about as we took the money from fixed income, you know, it's it's had its ebbs and flows. You know, that their 10 year number, it's about the same. It's a non correlating. So, you know, both of them, if you take a look at the 3 year number for rich minutes at 5 for UBS. It's -6. If you take a look at the one, your number real estate at 5.2. Now, keep in mind, it pays about 4 and a half percent. Someone that ballpark. Of that 5.2, most of that income. And that was the big reason we bought real estate to look to look like a bomb in one of the income from it. We wanted the cash flow. And then when interest rates skyrocketing to put that hurt, the it hurt the real estate market. evaluation is go down and that's what happened. Your your cash flows always been something like a bond. If interest rates change your bond prices can change, but you still get your cash flow. That's kind of what's happened here. And then we have the tpi Fund which is in the income fund and it's very similar, you know, wasn't quite as bad. A 3% 3 your numbers and negative year. But, you know, take a look at the one-year number 6%. First, the benchmark of 2, very, very you know, I'm very, non correlating. And then lastly, we have Cohen steers years. We've got into 5 years ago infrastructure fund. They they out of you have historically had a little bit lower return, but they have a little bit lower risk. I'm real happy to see from this quarter. They really nothing out of the park up 4.9 versus the benchmark of 1.5. They too have about a 4% yield. So it's a cash flow play on on infrastructure, with them on correlating asset. So we're getting about since since inception. But 8.9%. From a compliance perspective where yes, across the board, there's nothing out of compliance. We do have, as Anthony said, we're going to some rebalancing this Friday on the portfolio. And then I'll bring a search for Lazard at the next meeting. Any questions? That concludes my prepared remarks? Anything from staff. UBS for the first time since January. Give a quarterly redemption on October. 3rd of >> $31,000. Leaving, which went right to He's been 2.8 of their 4 million dollar request. So it's an OK, I was going to ask how much? >> Still, OK? So they also have, did you see the letter about the secondary? So we also have They They have an opportunity to get out in a secondary market. We've looked at pricing changes just like anything else. What they're going to give you. So we get much, if we get money back from UBS. On the redemption, it's based on the value of the properties. If we go to the secondary market, that's based on price right. And so what the last time we looked at it, it was about a 25% discount. To what the value was. It was a significant discount. I'm not a fan of that. We don't need the money. I mean, if we needed the money, we were in a bind, we would have to do something like that. part of them saying when it's, you know, one in the meetings, I'm quite and this is just this is my. What I think they haven't said this to me. You know, a lot of the in every trustee says this is awful. We can't get out. Why would we invest? We we can't get out right? I think this is a way for them to. Answer that so you can get out. We have the secondary market. It's a significant cost. All right. At least it has been so that can if that changes and we're get closer to par, then maybe we'll do that. But I mean, we're we're not under a big sense of urgency. It's not something like we have to raise cash or anything making more than the bond market. And that so that was something that we talked about a long time ago. And we are seeing that with real estate managers. The redemption requests are starting to be rescinded. I know that's something that you have the stomach for. So we have 4 Million. 4 million was placed in a queue in May 2023. and we still have 2.8 million outstanding. But we're still we still have like what? 14 Million. So if we get another 2, 3, we're still going to have 10, 11 Million. We haven't called right? >> Right. We have 10 million right? So the something to think about I'm not advocating for right now, but >> it seems like the real estate market. >> Obama is starting to come out of it. It's starting to normalize. So when we got into real estate. A million years ago. The idea was to get 6 or 7%. It wasn't to get. And so we're right on that right now. You have 4, 5%, in in yield. And 3 or 4% in growth. So you're going to be anywhere from, you know, 7, 8%. That was the idea and it doesn't correlate as as we've demonstrated, doesn't move the same as the bond market are the stock market. Well, I hear your recommendation is to continue to hold it because we don't really need the money. >> Yeah, we certainly know my my question. I I think that's absolutely correct. My question is, if the board we should we. It would. Would you be interested in rescinding the redemption request and not get the 2 million back and just? You know, keep the 10 million that you have. Our yeah, because you have 10 Million. What would you get? You get 10 million right now. You have 2 million still outstanding that they're supposed to get back to you. So you reduce that down to 8 Million. Takes you down 5 ish percent. 4%. ? >> Well, I kind of look at it, too, though, that are rescinding is allowing us to get money for payroll. So my looking at that wrong, >> Not necessarily were closed plan. When you catch up. We do have the income is thrown off and we've been. Utilizing that since 2016. been a long time in a long time. We've had that strategy. So it's for the and in. Wrecked But where you shunned most all of them. here's what's correct me if I'm wrong. But here's what's happened to Money comes in. We use just goes in the cash ball. >> And then when we rebalance, that's why you're overweight. A lot of things. We have a target of 10 and real estate were about 6. So that means your 4% got to go somewhere. >> Let me ask you if we keep the a 10 million, whatever it is. Sorry, my bring it all over. We have to redo our. It won't be 10% anymore. >> We have a range that we're allowed to be in. >> 6% 1000. >> Right. Right now where we're at right now are 10 Million. Yeah. 10 million where where about 6? So underweight real estate. But that's all within the IPS. I mean, it's all it's all because we have a range were allowed to be in. The question means to do you want to take it less than what you have now? Are? Are you okay with rescinding that request? Are they taking it out of the? >> The TPI or THE T P F A T P F. The TBI is I'm not sure. I don't think we have a redemption question anymore. No, there's never hoping that because that's the one that makes right. That's doing well. My question us. Staying in real estate as UBS, the company we want to be with or there a better company out there? That's that's a good question. And that's kind of where we were. So. so couple things can happen. That's a great, great point. Chuck, thank you for saying that. So right now not directly technically you have a target of 10. You're underweight. Let's call. This is qualified for easy math. That means that other 5% is just kind of dispersed throughout the portfolio have should be moving. It and again, where we should be moving it to get them. Well, we're still in the range. So well, you know, we're fine. We're fine. It's OK to be overweight. Only what we could do is also do a search for real estate manager are maybe REIT. To bring your real estate up to 10%. To earth. And then that way everything would be right on top of its targets. You all you all are not allowed to get in any other alternatives. I don't think your statute allows is that. That's correct. That is correct. So you are not allowed to get any other alternatives. So really the only places that you or your alternative exposure as your infrastructure and your real estate, that's it. And stocks and bonds. I think we should just leave it as is. So are you seeing rescind the redemption requests are? Take the money back he taken, OK, we'll take the money back. And then. One of the reasons we haven't been a sense of urgency right That's that's what we're discussing. One of the reasons we haven't had a big sense of urgency to get another real estate manager real estate out of all the asset. Classes hasn't been great. It's only like in the last quarter. 2, I think we need to watch longer, OK? That's That's for But I think that says this is a question we need to have. That's that's for watching another quarter. 2, it looks like things are smoothing out then maybe another reevaluation and then get hammered again. Do you know if you heard any of that? >> It's going to you know, a lot of that had to do with rates. So there 2 things and COVID which wrecked the office space and retail space direct those 2 spaces, which 50% of the real estate portfolio and then interest rates went up to 9 switch, throws the real estate market. All of that happened at the same time. You know, it. We said it going to nothing like this has ever happened before. That is never going to happen again. You know, 6 years ago and all you have to worry about that now. I'm not so sure. You know, I mean, there could be another issue what is happening in the real estate spaces. Residential is really these companies to buy all these residential property because p