Police and Fire Retirement Board

Item 4 B. March 12, 2024 CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING February 13, 2024 Page 1 of 6 The regular meeting of the Center Line Police and Fire Retirement Commission was called to order at 3:01 p.m. by Chairperson Petroff. Members Present: Richard Stys, Gregory Suma, Danny Petroff and Jorge Bermudez. Members Absent: Gregory Pearl. Also Present: Timothy Brice from the Graystone Group of Morgan Stanley. AGENDA ITEM 2. – Approval of the Agenda: A. Motion by Trustee Stys to approve the February 13, 2024 agenda was supported by Trustee Bermudez. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Pearl. AGENDA ITEM 3 – Public Comment Seeing there was no one in the audience this item was closed. AGENDA ITEM 4 – Approval of the minutes A. Approval of the Regular Meeting minutes held on January 9, 2024. Trustee Stys made the motion to approve the January 9, 2024 minutes was supported by Trustee Bermudez. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Pearl. AGENDA ITEM 5 – Remembrances of deceased Members and Beneficiaries: A. None. AGENDA ITEM 6 – Presentations: A. Timothy Brice from Graystone Consulting a division of Morgan Stanley.  Item 4 B. March 12, 2024 CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING February 13, 2024 Page 2 of 6 i. On The Markets – And the Beat Goes On – February 2024. ii. 4th Quarter 2023 Money Manager performances and asset allocations. iii. Market Values through February 5, 2024 ~ $ 13,397,722.38. Mr. Brice addressed the On The Markets document. Mr. Brice said Morgan Stanley does not believe we will have a recession but there will be a slowdown in the economy. The market is seeking price for perfection. Meaning, if poor earnings come in on a stock then it may take a big hit. Today an inflation number came out and it was .01% higher then anticipated and the market is down 700 points as a result. The FED will probably not cut rates until June or even later. Mr. Brice said if stocks continue to climb it may be a good time to trim some equities and park it in cash at 5.00% and use it to pay some bills and benefits. Mr. Brice said China equities have been so depressed that it may be an area to explore along with emerging markets equities. For the fourth quarter of 2023 the portfolio was up 9.63% and our custom index was up 9.90%. Year to date we were up 16.07% and our index was up 15.25%. Mr. Brice said the index is the gross return and does not include the impact of fees. Fixed income did well in the fourth quarter as the markets believed the FED was done raising rates. Our bond managers Western and Boyd returned 7.20% and 8.94% respectively while the index was up 6.82%. For the year Boyd was up 5.90% and Western was up 6.99%. The fixed income index was up 5.33%. John Hancock was up 15.53% for the fourth quarter and was up 33.77% for the year. Their index was up 11.69% for the quarter and for the year was up 26.29%. Confluence was up 11.72% for the quarter and its benchmark was up 9.50%. For the year they returned 16.80% while its benchmark was up 11.46%. Aristotle was up 14.54% for the quarter and its benchmark was up 9.50% and for the year they were up 21.23% with the benchmark gaining 11.46%. They are a relative value manager. Meaning they would purchase Apple stock. Clearbridge was up 15.14% for the quarter with its benchmark up 14.16%. For the year, they were up 45.22% and its benchmark was up 42.68%. Pioneer For the quarter was up 13.25% and its benchmark was up 14.16%. For the year, they were up 33.34% and its benchmark was up 42.68%. This manager buys growth stocks at a reasonable price. In 2022 they were down -19.45% and the benchmark in 2022 was down -29.14%. So, they are a diversification manager when markets are bad. Mr. Brice said the “Magnificent 7” stocks account for nearly 45.00% of the Russell 1000 index and called that ridiculous. Earnest our mid/small cap manager returned 1.94% for the quarter and 16.10% for the year. Its benchmark returned 12.94% for the quarter and 17.23% for the year. Mr. Brice said they missed their benchmark and usually do not do that as you can see over time. They have been our manager since 2006. Kayne Anderson was up 12.59% for the quarter and its benchmark was up 13.35%. For the  Item 4 B. March 12, 2024 CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING February 13, 2024 Page 3 of 6 year Kayne was up 24.15% and its benchmark was up 17.42%. Clearbridge International was up 10.71% for the fourth quarter and its benchmark was up 10.42%. for the year they were up 14.66% and its benchmark was up 18.26%. For the long haul they have done well but have had some issues the last couple of years. Mr. Brice’s office is watching this manager more closely. Aristotle our international value manager was up 9.25% for the quarter and its benchmark was up 9.75%. For the year they were up 18.02% while its benchmark was up 15.62%. Harding Loevner another international manger returned 12.35% for the quarter and 16.16% for the year while its benchmark returned 9.75% and 15.62% over the same time period. Harding Loevner our emerging markets manager returned 6.33% for the fourth quarter and 6.72% for the year. Its benchmark returned 7.86% and 9.83% over the same periods. And Tim touched on our alternative investments in JLL Properties, The Partners Group, Blackstone and Cohen and Steers our REIT manager. Tim said he would bring information on another emerging markets manager to the next meeting on GQG. Mr. Brice said all the traditional money manager returns are time weighted rates of Return but the reporting of returns for alternative investments is different. Private equity, Private real estate and Private credit returns are reported from an internal rate of return. They set a net asset value by funds going into these investments and funds being sold. By regulation the alternative investments return has to be disclosed in a separate report. Partners Group our private equity manager was up 7.60% The Cambridge private equity benchmark was up 5.25% for the year. JLL in Private real estate was down 7.34%, Nuveen was down -.50%, The NFIODCE the benchmark for private real estate was down – 12.02% for the year. Investors were still worried about interest rates at the end of 2023. Mr. Brice discussed our asset allocation. The portfolio has 63.74% in equities, Fixed income is at 18.43%, REITS are at 6.74%, Private credit is at 3.04%, Private equity is at 3.61% and cash is at 4.43%. All of our asset classes were within our targets. Mr. Brice said if our equities get near 68.00% or 69.00%, we may want to trim back that allocation. AGENDA ITEM 7 - For Your Information: A. Correspondence to Justin Ward Re: Packet for refund of employee contributions. A motion to receive and file was entertained by Trustee Suma and seconded by Trustee Stys.  Item 4 B. March 12, 2024 CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING February 13, 2024 Page 4 of 6 AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Pearl. AGENDA ITEM 8 – Old Business: A. None. AGENDA ITEM 9 – New Business: A. Kyle Cobus ~ Request for refund of total contributions. A motion to approve Kyle Cobus’s request for refund of contributions was entertained by Trustee Suma and seconded by Trustee Stys. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Pearl. B. 2024 MAPERS Spring conference May 18th through May 21st at Soaring Eagle, Mt. Pleasant, MI. A motion to by Trustee Suma to allow any member wishing to attend the conference be allowed to do so was seconded by Trustee Stys. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Pearl. AGENDA ITEM 10 – Retirements: A. None. AGENDA ITEM 11 – Annuity Withdrawals: A. None. AGENDA ITEM 12 – Approval of Pension Figures: A. None.  Item 4 B. March 12, 2024 CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING February 13, 2024 Page 5 of 6 AGENDA ITEM 13 – Vouchers: A. January 25, 2024, pensions paid: Pay Report 532 ~ $ 127,233.98. A motion by Trustee Stys pay the January 25, 2024 pensions was seconded by Trustee Bermudez. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Pearl. B. Graystone Consulting – Fourth Quarter 2023 Consulting fees. Invoice # 10062024004 and # 10062024008 Dated: January 4 & 8, 2024 ~ $ 17,103.99. A motion by Trustee Stys pay the Graystone consulting invoice was seconded by Trustee Bermudez. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Pearl. C. VanOverbeke, Michaud & Timmony, P.C. ~ Third Quarter 2023 Legal Services. Invoice # 112047, Dated: January 23, 2023 ~ $ 3,477.30. A motion by Trustee Stys pay the VanOverbeke invoice was seconded by Trustee Bermudez. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Pearl. AGENDA ITEM 14. - Commission Members Comments: None. AGENDA ITEM 15 – Adjournment: As there was no further business to discuss, a motion by Trustee Stys and supported by Trustee Bermudez that the meeting be adjourned at 3:51 p.m. AYES: 4  Item 4 B. March 12, 2024 CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING February 13, 2024 Page 6 of 6 NAYS: None Motion carried 4 - 0. ABSENT: Pearl.