And stansbury one up here today can we do please take roll call cohen speak, here. Bridges, here. Driscoll, here. Makras. Mdm. Clerk its time for close session open up or Public Comment on our close session items. Seeing none, Public Comment is closed. At this time [gavel] thank you we will resume at in 15 min. At 2 30 pm. Excuse me. Good afternoon. We are going to take a motioncan come out of close session and make a motion not to discuss what we discussed in close chat session. Is there a motion . [inaudible] [off mic] not just us what was [inaudible] motion has been made by commissioner bridges and second by commissioner cohen we can take that without objection. Thank you. Clerkfirst i want to thank the public for allowing us a few more minutes. Your time is important and i want to recognize that. Thank you for being flexible and honoring our request. I would like to go to item number four mdm. Clerk and you call that for me . Item 4 general public on ive one public card. If theres anyone us dont like to speak these, not or one or i pool not to reveal the minutes of the close session. Anyway one thing i want to comment on his hedge funds. One of the idea, supporting hedge funds is in an economic downturn maturities will take a less beating. Now i think that perfectly good fund, especially those which the dow jones 30 are very faithful relatively speaking and they take less of a begin what is the sense of having hedge funds . Because theres such an overhead expense. Theyre not transparent or not accountable. Also, its [inaudible] okay. None of the hedge funds are based in the Cayman Islands. Okay but do they have dealings with the Cayman Islands . That in itself is suspicious because the Cayman Islands are a hotbed of monica money laundry, crime and what else you can think of that is bad. So i think that to go with traditional securities, to go with stable stocks is the best way to go and i think this is an elementary thinking about the stock market. It used to be thinking about the stock market if you would watch wall street brief with willisor any of the other programs. Basically, thats my critique of hedge funds and i was sick with to share it with this group. Thank you. Thank you mr. Weiner. [calling Public Comment cards] good afternoon. My name is johnanimate 42 year member of the pension funds. Id like to start up i telling you and make you all happy telling you a unmet Hedge Fund Manager joking is called confessions of a Hedge Fund Manager. As many two words to him just peered every time a pension fund asked why our returns are so bad, we tell them we are managing risk. We convince them that we are less downsize risk than the market even though 13s art a terrible with excellent [inaudible] and that they are better off getting low returns in exchange for minimal downside risk. Then we throw in a few greek words. We now convinced that investing in a hedge fund is good downmarket protection. Youve got greek words in all Hedge Fund Managers know a lot more greek words and you do. I will tell you that. Anyhow, you are supposed to get downmarket protectant when was the last downmarket . 2008, think that was the thirdlargest downmarket in stock market history. What happened in that downmarket . More than 2000 hedge funds went out of business after losing their clients money. The average hedge fund lost 18 and when the hedge Fund Loses Money you can kiss it goodbye. Its gone forever. And the great [inaudible] he started out 1 million bet with the top Hedge Fund Manager in january first 2008 and how was i that going so far . Well but that was that vanguard 500 index fund would outperform hedge funds picked by him to he picked five hedge funds and the best so far is the hedge funds are 21 and the Vanguard Index funds is up 65 . Now i think you will all ill give you a prediction if you invest in hedge funds you will average about 5 a year over 10 years. If you want some shock, Financial Therapy as mr. Coaker in the tenure period how much you will pay in performance and Management Fees to get it 5 return. Thank you. I realize this is the only opportunity to bring holiday wishes to all of you on the board from ra ccsf and also from ci you must pay retirees. David is unable to be here this afternoon. But also to let you know that we will still be here at every meeting watching and listening and we let some people speak first. We let the attack dogs out first. Dexter is not here so i can use that phrase. But thank you all very much for all your dedication and your hard work during the year. And for watching over for our pension plan. We just want to wish you the best of the Holiday Season and we will see you next year after we survive what i hope is a short meeting today. Thank you. Thank you thank you for those kind words. Clerk anyone else that would like to Public Comment seeing none, Public Comment is closed. [gavel] call item 5 item 5 action item approval of the minutes of november 9, 2015 meeting moved and seconded. Without objection Public Comment, and Public Comment on the approval of the minutes . Seeing none, Public Comment is closed. A motion has been made and seconded and without objection that passes without without objection [gavel] clerk next item item 6 consent under lets take Public Comment seeing none, Public Comment is closed. Moved and seconded. Without objectionwe took it. You missed it william. [laughing] without objection the motion passes mdm. Clerk item 7 item 7 Investment Committee report the Investment Committee report sent as printed. Its highlighted in what we covered and i just want to say public thank you to the Investment Team and mr. Coaker for facilitating and giving some really good speakers in for the informational session for the Investment Community meeting. But as the report states this is what was covered in hulk where private equity insecurities have done the oh so thank you to mr. Coaker and the Investment Team and all our assistance thank you. Thank you for the presentation. I too want to acknowledge not only investment staff but also the committee. Thank you very much. Mr. Mitts thanks for doing an excellent job with working with mr. Coaker putting together an amazing year for education in the investment field. Lets take Public Comment on this report. Seeing none, Public Comment is closed. Can i get a motion to accept . Excuse me me its a discussion item only. Thank you very much. Clerk the please call item 8 and i together item eight and 9 report on Investment Performance and Retirement Funds and number nine report on managers under review they are intrinsically linked. [inaudible] [off mic] mr. Martin intend to see cover some macro issues and about but in briefly on performance for the quarter. Im joined by dan hennessy who i know you all nobody joined us about three months ago. He is a wharton grad. He spent seven years at Franklin Templeton in research that spent four years with our bill or a major consultant down on the peninsula. He joins me as part of your team get your member dan lobo has returned to his home in rhode island due to illness and his family. So dan has been working with us for 23 months. You finally get to meet him. Along the theme of a very good year, as youll see in a moment before quarter which is your first fiscal year quarter was a very Strong Quarter for you all, 3. 7 net return. Which capped off a strong 12 month period. 9. 55 . So we do talk about this low return environment but since february weve had very very Strong Equity markets and Strong Capital markets and you benefited greatly from that. Since the report was generated the s p i wrote in my note this morning, was up an additional 5 but that was before the fed raised Interest Rates and so now its up an additional 4 . We had a little back off. The fed as you know raised Interest Rates 25 basis points at the last meeting with an expectation to do that again maybe more frequently in the next year. We did have despite that 4 since the report was produced the month of october was actually down 1. 8 and then a recovery which it was rates the point that we do face potentially higher volatility in the market as we go forward as the market adjusts to new expectations. You have before you on the projector the economic environment. Im not point to spend a lot of time on it. It has not changed a lot since the last period of time. At least through the end of september, we are 70 years into a cyclical expansion although its been a very slow one and we are no longer in a depressed economic environment but that expansion has taken place within the context of the lever to get deleveraging is a fancy word for paying down your debt. So the challenge of the debt overhang does remain in place in the new administration will have that challenge to overcome to the extent that revenues do not exceed expenses at the federal level. More borrowing is required and more borrowing will and impact on Interest Rates. I wasnt not cover each of these other than the point out down the page the fed funds rate was unchanged during the Third Quarter but that fed funds rate todaynot the fed funds, the treasury yields today is 2. 49 and heard as the we look at not just the constant maturity rates that we have here but the spot rate for on the run treasuries. That number is also in that 2. 5 range. So weve had an 80 basis point increase in Interest Rates since the close of the quarter. That is big news. I would be happy to take questions on the economy but as i say, its been a slow recovery in the us. We are at the aging part of that cycle. We have a new administration with new plans and so will be talking more shortly about the implications of that. If not, i would just take you to mark themselves on the next page to give you the backdrop of whats been going on in the market. As weve seen the economic aggression, you can see looking at the first column of very Strong Quarter across the board did other than in commodities andus equities were up 3. 9 with small cap stocks recover reasonable exposure finally catching up in generating over 9 . Thewhich is the nonus developed market of 6 emerging markets up 9 . Those bboth benefited your portfolio in the Third Quarter but ill tell you, both of those things have been reversed since then because of the strength in the dollar. Using some back off there. Core bonds in a period rising rates about half a percent. By the equity, up 4 . So you see generally very good numbers for the quarter and and if you look at the one your returns, very strong numbers in us equity, 15 . Emerging markets 17 . Credit related bonds, very strong. So across the board this is been a very forgot for investors in general and your portfolio has been well positioned with respect to over weight in areas that are done well. Pages 17 print for San Francisco msu one comment, first, bob . Go ahead a couple comments but go ahead way to the top line percent San Francisco, you see the top line there is your total funds time weighted rate of return net of all fees. The quarter was in the 57 percent out of the public fund. Group of greater than 1 billion. The oneyear, one 91. 55 [inaudible] three years 7. 2 , top 3 and the 10 year number, 10. 24 top 11 get very very good numbers and youll notice now that the one year, the threeyear and the fiveyear are either at or close to your assumed rate. If you look at the performance of the fund versus the public fund billion needy and youll see in all periods is outperformed and if you look at it versus a 6040 us Domestic International equity Domestic International bonds, other than the one year youve outperform that index as well. On the other hand, the fund is underperformed your policy index for all periods which were going to analyze shortly. A lot of that has to do with benchmarks specification as opposed to disappointing manager performance although there is disappointing manager performance in a couple of Asset Classes. On a riskadjusted basis, if you look at those tables and you look at your standard deviation versus the median of the fund, your staff, as theyve indicated, has operated your portfolio in a less volatile way then your peers. So your standard deviation is lower. Its below meeting in terms of riskiness and when you combine that a good return with a lower risk the measures that we use to talk about risk adjusted returns, the sharpe ratio being one where you look at the return per unit of volatility, the ratio developed by Frank Sortino looks at risk per unit of downside volatility, you will see your rankings on both a three and five year are in the top 10 , top 12 of the peer group. So very strong risk adjusted results. For the year ended september 30 you express a net investment gain of 1. 89 billion. With 764 of that drain the Third Quarter. Your assets are now at 20. 9 6 billion up for 19. 7 2 billion a year ago. So let me pause there with the headlines. Bob has some specific comments and will come back and talk about attribution. Can give me the dollar amount [inaudible] repeat that please the total value of the fun . 20. 96 the 7291. 8 9 billion is the investment gain and then during that period you also paid out money. The investment game, is 1. 8 under thank you this is on the right up on page 17, also. Thank you. Any other questions for martin . Just a few comments. This is been when i look at the numbers for this quarter all the managers we have in Public Markets including the private marks everything is nice to see there are some areas of disappointment. But id like to focus on specifically emergingMarket Equities. Across the board, we were 200 basis points behind and is the result of underweight in three countries and 2 seconds. Specifically china, taiwan and korea. Three largest countries in the index did phenomenally well during the quarter good as did Information Technology and financials and several managers were underweight those sectors. Longterm its worked out but for this particular quarter given some of the ways that are managers i will point out specifically mandate which were adding to the under with you had no weight in Chinese Technology companies. As a deep value emergingmarket equity manager so not surprised that no weight in Chinese Technology companies. Also nothing in chinese financials that that was the brunt of their underperformance during the quarter. Thats also one of the reasons theyre going under review for performance reasons during this quarter. So during very good quarter when i look out on an absolute basis as alan noted. Were up 3. 7 up during the quarter and a little more for the fiscal year. But there are areas of disappointment. Were also adding oak tree for operational reasons. Organizational. Whether also under review for performance. Now this is it almost sounds a little bit odd but they are Higher Quality junk or highyield manager. People continue to stretch for yield and fixed income as a result this portfolio underperformed its benchmarks. But when you look at the numbers. Are still added of their peers, which is a hopeful comment for us. [inaudible] im sorry . [inaudible] [off mic] were adding additional factor, organization. Sorry. That will conclude my comments unless there are specific questions from the board . I just want to take you to a couple more pages on both attribution of risk and return. If you go to page 21, on page 21, [inaudible] [off mic] if im right by memory now, june 30 at the end of year when we closed out we looked like 500 million decline in our total assets. How does that play on this that shows were making money . In on the analog report it says we are not. Just a you can walk us through that. So people that may compare these can understand. Part of the kneeso separating out performance numbers from changing dollar values. We run once you take into account contributions less pension benefits and expenses, we run between i think it is 80 5 million per month. So 960 some odd Million Dollars negative cash flow per year. Im sgt. I double back is good of you out 500 million negative cash flow. So looking at growth in dollar value while not taking into account the fact that money flows out of the system every month, it becomes difficult to connect total return numbers with changing dollar values. Sorry. Thats not a direct answer all give you more information. If its there with the numbers on page 17 yes. That sort of the crux of where we are at. September through september, july to july, january to generate, if the funds in the pot positive or negative . These are all when your windows and so we dropped a quarter a year ago and weve added what you can see here. We probably should go back and see if we can tell you the quarter we dropped but t