Conversation that is going on right now. But were definitely monitoring that and well try and plug into that process when the opportunity presents itself. President tsen okay. Thank you. Okay. So the next item, please. Its adjourned. President tsen all right. Thank you. Director richardson before we adjourn. Yes. Director richardson i have two statements to make. Just to acknowledge mr. Jim smith for helping us out through the technical glitches today. And i would love to with your permission to adjourn this meeting in the memory of the late congressman john lewis and it was put eloquently, some thoughtful recognition of this great man. And we are all in gratitude to mr. John lewis for his life long fight in systemic racism and injustice. So he was a leader by all measures. And may his soul rest in peace. And thank you. President tsen thank you very much. With that, well adjourn. Thank you, all, for a great meeting. Thank you. [roll call] we have a quorum. You may begin the meeting. Thank you, madam secretary. The motion is whether to disclose the closed session. I move we do not disclose the results of closed session number one or closed session number two. Second to that. We do not disclose the results of closed session one and two. We will take Public Comment at in time. Please open the phone lines. Callers if you have not already done so one moment, please. Callers, please press star 3 to be added to the queue to those on hold, please continue to wait until the system indicates you have been muted. Moderator, do we have any callers on the line . Madam secretary, there is one caller on the line. Thank you. Please state your name. You have two minutes to speak. Caller i am john. Can you hear me. I can hear you. Thank you. I emailed three Public Comments on monday for inclusion in the minutes. I will emphasize a few points. In the july 15th document they said 10 year return is 5. 0 and for the current strategic allocation it is 5. 5 . He said if we had no cash flows no political sensitivities what short terms would be rather than 49 of public and private equity i recommend 100. I highly commend his honesty. New cash flows. Very gradually reset the stakeholder expectations about longterm returns starting with recession and stagflation in any pc july 15 study. 70 30 doesnt work with 10 year treasures and sp500 very high. There is no good diversifying assets. Given overweighting good ideas from the staff excellent management. Hopefully staff can be compensated for continued outperform answer. That is the end of my first Public Comment. I will comment on other agenda items later. Thank you for your comments. Moderator. Do we have any further callers . Madam secretary, there is one caller on the line. Thank you. Caller, please state your name. Your two minutes begins when you speak. Are you still on the line, caller . Moderator, please let us know if there are any further calls. Madam secretary, there are no more callers on the line. Thank you. Hearing no further calls, Public Comment is closed. President bridges. Thank you, madam secretary. Again, it has been moved by commissioner and seconded that we do not disclose sessions one and two. 67a. Madam secretary. Roll call vote, please. Commissioner bridges. Aye. Commissioner casciato. Aye. Commissioner heldfond. Aye. Commissioner safai. Eye. Thank you. Commissioner stansbury. Aye. Thank you. 70. Motion passes. President bridges. Thank you. Next item, please. Action item number 5. Approval of minutes of the july 8, 2020 retirement Board Meeting. Are there any corrections or omissions . If not a motion is in order. Can you hold for just one moment we need to do general Public Comment. Have we received any Public Comment via email . We received one general Public Comment via email from johjohn stenton. He wrote the client asked the Hedge Fund Manager where has my money gone . No, it just went to somebody else. Most hedge funds go out of business after losing most of their clients money i recommend you turn the hedge funds investments into cash. In the last recession cash gave better market protection than hedge funds. When the government stops giving out stimulus we will go into deep recession and the pension fund will lose billions of dollars, ps, the former chief Investment Officer is looking for a job. He is an expert in hedge fund and chinese investment. With best regards from john stinson. Any further Public Comment . Madam secretary. Next item. Item 5. Action item. Approval of the minutes july 8, 2020 retirement Board Meeting. A motion to approve the minutes. If there are corrections or omissions . I move. I second. It is moved and seconded that we approve the minutes of the july 8, 2020 retirement Board Meeting. We will take Public Comment at this time. Thank you, callers. If you have not already done so, please press star 3 to be added to the queue. To those on hold, please continue to wait until the system indicates you have been unmuted. Moderator, do we have any caller on the line . There are no callers on the line. Thank you Public Comment is closed. President bridges. Roll call, please. [roll call] 70. Motion passes. Interest. Next item, please. Number 6. Action item. Consent calendar. Motion to approve consent calendar. I make motion to approve consent calendar minus one correction that i forwarded regarding a retiree that appears on the list that he could not he did not want to retire. He changed his mind. I am aware of that. I can make that correction. Is there a second. I will second and request that we have everybody put it on mute. Thank you. It is moved and seconded that we approve the consent calendar with the state the the stated co be made by staff based on the retiree has changed their mind. We will take Public Comment at this time. One comment. Regarding item 6c it is not about a case. I will bring this up under executive directors report. Thank you, commissioner driscoll. Callers press star three. If you are on hold wait until you are unmuted. Do we have any caller on the line . Maddat secretary there are no callers on the line. Thank you. Hearing no callers, Public Comment is closed. President bridges. Aye. Roll call. [roll call] 70. Motion passes. Thank you, madam secretary. Next item, please. Item 7, action item approval every viced Investment Policy Statement he of the revised investment pa policy. Staff is requesting in addition to the ips and processes and procedures of the security Lending Program just restarted a number of months ago, good news the security Funding Program is off to a very strong start. We will deliver an update next month or in october. We are requesting some modest changes. Very good, bill. Good afternoon everyone. On may 13 this year the retirement board conditionally approved the initiation of Credit Facility up to 250 million. With the custodian with the cash release program from the securities lending on the investment account. The final approval of the facility was contingent on the approval of the needed changes to the Investment Policy Statement related to the Credit Facility, and the acceptance of the internal processes and procedures for the securities Lending Program including the cash release program. So today we are bringing the original changes to the ip to include the Credit Facilities for the plan and we also bring the new internal processes and procedures documents for the Lending Program. So first i will outline the key proposed changes to the Investment Policy Statement to accommodate Credit Facilities for the plan. The proposed changes are in two sections. One is the section called Investment Policies and procedures. We introduce section 12 for subsection 12. Second is in the duties of responsible parties. We amended the duties and responsible investment staff as it related to the Credit Facility. On page 8 of the marked version of the ipf document, we introduced the use of section 12 that allows the trust to initiate Credit Facility under four conditions. First, Facility Needs to be reviewed and approved by the board and general investment consultant. Second, total amount of outstanding loans should be less than 1 of the trust. Third, initiation of any loan through the Credit Facility should be approved by both the chief Investment Officer and the executive director. After careful consideration of the potential sources of liquidity. Number four, the detail reporting through monthly cio reports and annual review to the board should be provided by investment staff in line with the procedures. These are the changes to the Investment Policies and procedures section. I will briefly outline the changes and amended to the duties of responsible parties section. [please stand by] we continue monitoring the process and the security Lending Program and we plan to report the results of the Previous Fiscal Year to the board within a couple of months. The program is operating as intended and so far, the fiscal fiscal year lended for the plan. And the oversight of the account any oversight that we have for any managed account. In line with any public Equity Income equity and retention document. That includes quarterly reviews that covers the compliance with adopted guidelines. We also cover any credit down kraids on our account. Costs associated with the Overall Program and with the cash release program. Review quarterly performance of the program and issues and outlines. We review the lending markets and the credits facilities available towe review the counter monitoring processes since they guarantee the program. We review the other requests such as[indiscernible]. Thats the monitoring. As it relates to the overall security Lending Program. Now id like to quickly outline the process fees for the cash Credit Facilities. First, the initiation of the facilities. The c io and director need to approve the cash release Credit Facilities. We expect to make the Credit Facility. We think of it as a safeguard that allow us to continue meaningful investment. In a way you can think of it as building a hand rail that will help us to recover in time. We dont expectsecond theres a statement period. Were setting it for six months. But expect to repay within six months. Large market may require longer timeframes to prudently pay the cash and pay down the facility. We have large expected cash flows such as projected employer contribution repayments for statement redemption received. That could potentially take longer than three months. Thirdly, we require transparency and reporting in the process and procedures through the documents. The monthly c io reports through the lick the liquidity managemet oversight on a fiscal year. With that staff recommends to approve the proposed changes to the San Francisco city and county system Investment Policy Statement. Independent processes and procedures to the Lending Program. Ill open up for questions. Any questions regarding the[indiscernible]. You can walk through that process. It actually seems we rely on melon. If you remember the way we structure, dual indemnification with all counterparties that they initiate the program. We really rely on the melons process. We do review and monitor them. Because they provide indemnification in the event of the counterparty, we rely on them. Its interesting as a side to note that in march, i believe march 17th there was a counterparty and melon had exposure and we did not even notice it. They worked it through. They have plenty ofremember when we reviewed security lending, with their counterparties. As a result it was a non event fraud by melon as a whole. I wasnt sure what percentage of collateral[indiscernible]. They do monitor my second question is the cash of the balance [indiscernible]. Do we have enough time in the eventim worried about the time line here. We usuall usually know the ch flows within a week. Its rare when we have a large flow. Remember we are preparing for the event when theres a Large Capital flow from one of our managers. They usually give up the time for a couple of weeks for the scheduled pension payments. With that, we think we have enough time to ask for the approval from the c io. We need to move. Right. Thats what im worried about. If we need to move quickly. Thats the timing im worried about. We have about[indiscernible]. Commissioners, any other questions. This is an action item. Move for approval and adoption. I second but would like to make a comment. Adding the requirement for the c io to be counter signed with the security, the point i want to make is this just another bullet point of why or how much finance knowledge the executive director must have in that position. Most organizationsthis duty would fall to the cfo. Thats all. Thank you. Thank you commissioners. Moved and seconded. Madam secretary, please take Public Comment at this time. Thank you. Callers, if you are not already done so, please press star three to be added to the queue until the system indicates you have been unmuted. Moderator are there any callers on the line . Thank you very much for your time. Thank you for being available and holding your meetings so we can all participate. Thank you. This is john. Can you hear me . Hello . Yes, thank you. You may begin your comments. Thank you. I strongly support this change. Given the highly successful heavy waiting in private funds, it was imperative for analysis and tools and this cash release program. The best way of dealing with lick iliquidity of diversifica. Theres a very deep bench. To also help with liquidity, the allowable ranges are huge. We have made a Restructuring Program and this past year alen will report next month for the end of june public equity for up to six and a half percent. North of three percent and that includes passive and passive like strategies. Access returns are higher. We recently had some European Asset managers are currently under way in europe per say. They invest in global heaters. Its not entirely a european based region in terms of where they extract their revenues and profits. Its concentrated. Quantitative analysis in all 20. In conjunction we developed a request for information which last august they approve logos d and was sent out to eleven managers. All of which were visited in europe the following month. He is the third partner and joined shortly after they launched. Investment banking experience. He is a professor at a leading Business School where he teaches a class on financial analysis. We are recommended today 15 to 18 high quality businesses. The detail for cash flow analysis allows strong defensible businesses that are misunderstood by the market. The resulting portfolio highly differentiated from the benchmark. We provide an investment example on page 14 of the memo. This is a good sill straition of the kind of companies for a long Term Investment approach. Biologic manufacturing is very complex. The facilities they use takes years to build and upward of a billion dollars. Bio logics is a growing part of the industry. Most companies dont want to invest until they have regulatory approval. It takes more than ten years to get a drug from initial trials to see the market. Regulatory approval of biologics are contingent on the environment they see the child in. Once they get that approval its a race to get that drug to market before their patent expires. Its usually five to ten years which provides predictable revenues for the companies. Potential vaccines for covid has been in the neuf news a lot lat. If it does get fda approval for the vaccine they will need to scale up fast. They are currently doing their phase three trials. If they do get approval, they will literally scale up a vaccine in a short period of time. It would be significant for the company. A lot of investing, the staff was under valued. Its a great opportunity in bio logics. Theyve been building up their manufacturing capability bs andd facilities. They saw it was well positioned to benefit. Theres a gross ir of almost 50 . It would be additive to our current portfolio. The only managers that have it have less than a one percent and these are diversified investments. We are not[indiscernible]. That has lagged the last ten years relative to the u. S. The growth has been weak. You can see that on the chart in the memo. The net returns of 10 . Returns analysis are on page 18 of the memo. In addition to strong absolute and relative returns as measuredtheres up capture of 100 . Down can down capture of 80 . It will create over the long term. Were recommending capital. I will now turn it over to nat c to make any additional comments. Thank you. As curt mentioned. They were involved in helping to contribute interesting strategies for the rfi as well as reviewing and editing the questions that went out and fit the respondents for us. Two groups of our Research Team work with hahn a