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Asset Management Committee: December 3, 2015

Chairman Stephen Lacy presided at the regularly scheduled meeting on December 3, 2015. The following actions were taken:

Meeting minutes for the November 12, 2015 Asset Management Committee were approved.

Staff began the meeting with an overview of the global markets. Staff then discussed the current interest rate environment and potential opportunities to invest in the Energy sector. Staff asked for the committee’s input given its experience in both the Financial Services and Energy areas and discussed potential risks that need to be addressed.

Staff reviewed the Endowment Pool implementation, including an overview of Strategic Asset Allocation. Staff presented a review of the current rebalancing policy to the committee as well as the rebalancing formula applied to liquid asset classes and discussed how the formula drives decision-making.  

Attribution for the Growth Engine portion of the Endowment Pool was also discussed. Staff noted that manager selection is the main reason for the Growth Engine’s excess returns in relation to its internal benchmark.

Staff updated the Committee on the recent change from the beta trend overlay to utilizing a managed futures strategy within the Diversifiers allocation. The transition went smoothly without any material issues. Staff also noted the savings in fees as a result of changing strategies.

Chairman Lacy introduced the December topical discussion regarding the Growth Engine. The Growth Engine represents roughly two-thirds of the Endowment Pool and will be the driver of long term returns. Staff discussed the merits of investing in public equity, private equity, and long-short equity investments. Portfolio construction regarding the various types of assets within the Growth Engine was also discussed.

Staff explained the background on Trust Management governance and a policy was structured and presented. Semi-annual reports and minutes of the Trust Management Advisory Group will be presented to the Asset Management Committee going forward.

Chairman Lacy concluded the meeting with a discussion of the future format of Asset Management Committee meetings. It was agreed to hold two teleconference meetings year instead of four going forward.