Police and Fire Retiree Health Care Trust Board Meeting

CITY OF MADISON HEIGHTS POLICE & FIRE RETIREE HEALTH CARE BOARD REGULAR SCHEDULED TRUSTEE MEETING April 18, 2023 The Meeting of the City of Madison Heights Policemen & Fire Retiree Health Care Board of Trustees was held on Tuesday, April 18, 2023, at 9:43 a.m. at 31313 Brush Street, Madison Heights, Michigan. Present: Board Members: Kevin Barrett, Eric Bissinger, Linda Kunath Others Present: Retirement System Attorney Thomas Michaud Morgan Stanley\Graystone investment advisors Brian Brice Excused: Board Members: Jeff Geralds and Anthony Roberts 20-23 Excuse Board Members Jeff Geralds and Anthony Roberts Motion by Trustee Bissinger and supported by Trustee Kunath to excuse Board Members Jeff Geralds and Anthony Roberts from the regular meeting of April 18, 2023. Yeas: Barrett, Bissinger, Kunath Nays: None Absent: Geralds, Roberts Motion Carried. 21-23 Approval of Minutes of the Special Meeting of March 21, 2023 Motion by Trustee Bissinger and supported by Trustee Kunath to approve minutes of the special meeting of March 21, 2023. Yeas: Barrett, Bissinger, Kunath Nays: None Absent: Geralds, Roberts Motion Carried. Meeting Open to the Public No items were discussed. 22-23 Morgan Stanley\Graystone Consulting Investment Report Morgan Stanley discussed the Plan’s asset allocation, percentage of portfolio and differences to policy target. The Federal Reserve has continued to tighten, inflation is above policy targets and the post-COVID boom’s economic resolution is still not finalized. Morgan Stanley models project the next bull market phase as one of normalized inflation and higher neutral rates. The 2023 seven-year annual return forecast for global stocks remains essentially unchanged, at 5.2%, with projected US equity returns improving modestly to 4.4%, which is below historical average. Hedge fund education material was distributed and discussed. The policy targets 3%, about $800,000, to invest in hedge funds. Morgan Stanley is looking at a single hedge fund manager, for exposure to asset class, but has diversification, a number of portfolio strategies under one ownership. This investment consideration is not to take on undo risk. The manager will typically receive 1.5% management fee plus 15% of the return, and there is up to 3 months to liquidity. Quarter to date returns were up 4.66% net of fees, for the fiscal year to date up 5.88% net of fees, and last 3 years up 12.33% net of fees. The total assets as of April 10, 2023 were $25,605,219 and as of March 31, 2023 were $25,236,150. 1 04/18/2023 Motion by Trustee Bissinger and supported by Trustee Kunath to receive and file the investment reports. Yeas: Barrett, Bissinger, Kunath Nays: None Absent: Geralds, Roberts Motion Carried. 23-23 Graystone Consulting Investment Changes Memorandum Motion by Trustee Bissinger and supported by Trustee Kunath to receive and file the Graystone Consulting Custom Investment Outsourcing Discretionary – Quarter Ending March 31st, 2023 – Investment Changes Memorandum. Yeas: Barrett, Bissinger, Kunath Nays: None Absent: Geralds, Roberts Motion Carried. 24-23 Adjournment Motion by Trustee Bissinger and supported by Trustee Kunath to adjourn the meeting. Yeas: Barrett, Bissinger, Kunath Nays: None Absent: Geralds, Roberts Motion Carried. The meeting was adjourned at 9:51 a.m. Respectfully submitted, Linda Kunath, Secretary 2 04/18/2023