MINUTES OF THE CITY OF SARASOTA POLICE OFFICERS' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING APRIL 23, 2021 Present: Chair Demetri Konstantopoulos, Vice Chair Johnathan Todd, Trustee Ronnie K. Baty, Trustee Joseph Jody" Hudgins. Others: Attorney Scott Christiansen, Pension Plans Administrator Debra Martin, Senior Pension Analyst Anthony Ferrer, and Pension Specialist Peter Gottlieb. Absent: Secretary/Treasurer Shayla Griggs 1. CALL MEETING TO ORDER: Presenter(s): Chair Konstantopoulos. Chair Konstantopoulos called the meeting to order at 8:15 a.m. 2. PLEDGE OF CIVILITY: Presenter(s): Chair Konstantopoulos. Chair Konstantopoulos stated for the record, "We may disagree, but we will be respectful of one another. We will direct all comments to issues. We will not engage in personal attacks." 3. ROLL CALL: Presenter: Anthony Ferrer, Senior Pension Analyst. Senior Pension Analyst Ferrer called roll. He advised Secretary/Treasurer Griggs will be absent from this meeting and will request an excused absence at the May meeting. Also appearing in chambers were Attorney Christiansen, and Pension Specialist Gottlieb. Pension Plans Administrator Martin appeared telephonically. Chair Konstantopoulos requested an excused absence from the March 26, 2021 meeting. Trustee Hudgins made a motion to excuse his absence. Trustee Baty seconded the motion. The motion carried unanimously (4-0). Trustee Hudgins requested an excused absence from March 26, 2021 meeting; Vice Chair Todd made a motion to excuse his absence. Trustee Baty seconded the motion. The motion carried unanimously (4-0). 4. PUBLIC INPUT: None. 5. APPROVAL OF MINUTES: 5.1. Approval Re: Minutes of the Police Officers' Pension Plan Board of Trustees Membership Meeting of March 26, 2021. Book 1 Page 222 04-23-2021 8:15 a.m. Book 1 Page 223 04-23-2021 8:15 a.m. Presenter(s): Chair Konstantopoulos. Vice Chair Todd made a motion to accept the minutes of the March 26, 2021 meeting. Trustee Baty seconded the motion. The motion carried unanimously (4-0). 6. RETIREMENT REQUESTS: None. 7. INVESTMENT PERFORMANCE REVIEW: 7.1. Presentation and Discussion Re: Sawgrass Asset Management LLC, Investment Performance Summary as of March 31, 2021. Presenter(s): Liridon Gila, CFA, Fixed Income Portfolio Manager, Sawgrass Asset Management LLC. Liridon Gila appeared before the Board telephonically and introduced himself. Mr. Gila stated that he is a fixed income manager at Sawgrass and thanked the Board for the opportunity to manage investments for the Plan. He began by discussing the Portfolio Summary noting the Plan has $14.3 million under management with Sawgrass as of March 31, 2021 which is up from $13.5 million as of March 31, 2020, and up from $11.2 million at inception on March 3, 2016. Mr. Gila reviewed the Portfolio Performance and asserted that, despite a negative first quarter in 2021, the portfolio has exceeded its benchmark, the Barclays Capital Aggregate, over every other timeframe with less risk. He discussed the Treasury Yield Curve change, explaining interest rates are being driven higher by COVID-19 vaccines- related news and events, federal stimulus money going into the economy, and federal monetary policy. Mr. Gila discussed the US Treasury 5 Year note, noting federal borrowing and spending has increased values of commodity prices which gives cause fori inflation concern however Sawgrass believes this is a transitional phase to a normalized economy. He explained that the performance during the Q1 2021 was the worst since 1981; he discussed the credit market as indicated on the Sector Performance and the portfolio positioning relative to the benchmark stated on the Security Selection slide of the presentation materials. Mr. Gila discussed the sector weight changes stated on the Quarterly Changes slide, Current Attributes and Sectors. Regarding its Current Duration Distribution, Sawgrass sees an opportunity in the 5-1 to 7-year maturities along the yield curve and is therefore overweighted in that section of the Treasury curve, and reviewed the Sensitivity Analysis - 12 Month Horizon, noting these are predictions of future performance using various assumptions. Gregory Gosch of Sawgrass Asset Management appeared before the Board telephonically and introduced himself. Mr. Gosch thanked the Board fori its business and confidence. He asserted there is current instability in the market and Sawgrass is therefore taking a conservative approach to investments. Trustee Hudgins asked Mr. Gila if the slide titled Consistent Outperformance in Varying Environments, which shows data as of June 30, 2020, was a typographical error, or if not, what was the significance of that data. Mr. Gila explained Sawgrass wanted to highlight the quality of the portfolio by showing its performance during periods of stress, Q1 and Q2 2020 were each separately volatile periods for different reasons, and the portfolio still outperformed its benchmark during those timeframes. Trustee Hudgins asked if comparing Q1 and Q2 2020 to Q3 and Q4 2020 would have been more relevant as, according to Mr. Gila, the fund also outperformed the benchmark during this timeframe as well. Mr. Gosch stated that the page titled Consistent Outperformance in Varying Environments was in their presentation as a reminder that one of Sawgrass's main goals is risk management in down markets. Larry Cole of Burgess Chambers and Associates appeared before the Board telephonically and introduced himself. Mr. Cole asked Mr. Gila if there were currently any floating rate opportunities. Mr. Gila explained the portfolio has an approximate 7% exposure to floating rates, but that current market opportunities are in the short maturities which have rich spreads but not significant values. Chair Konstantopoulos thanked Mr. Gila and Mr. Gosch for their presentation. 7.2. Presentation and Discussion Re: SSI Investments, Investment Performance Summary for Period Ending March 31, 2021. Presenter(s): James A. Kowal, Vice President, Institutional Client Service & Marketing, Michel Opre, CFA, Portfolio Manager, SSI Investments. Michael Opre and James Kowal of SSI Investments appeared before the Board telephonically and introduced themselves. Mr. Kowal thanked the Board for the opportunity to the Board as one of the Plan's Convertible Investment Strategy managers. He stated there has been no significant structural changes, other than having staff working from home and in the office since March 2020; the team members on the Convertible Strategy have been with SSI for approximately 20 years on average, and SSI has approximately $2.7 billion under management with $2.4 billion in convertible strategies. Mr. Opre discussed Unpacking the 2020 Convertible Market, noting the underlying equity performance drove the asset class performance; he stated that the pages titled Access to Innovation in Convertibles and Access to Cyclical Recovery Investment Opportunities illustrate the themes which have driven the portfolio's performance over the last year and noted, regarding the 2021 Convertible Outlook, convertibles have outperformed other asset classes in rising long-term interest rates, which is currently being experienced. They have been taking profits when appropriate and investing proceeds in areas which are expected to perform during the next phase of the economic cycle, such as health care. He reviewed the Preliminary Performance for the first quarter of 2021, the Fiscal Year to Date Contributors, and the Fiscal Year to Date Attributors. Regarding the Portfolio Construction, Mr. Opre stated the portfolio is overweighted in equities compared to the benchmark and has been taking steps since quarter-end to reduce the equity sensitivity by liquidating some of the gains. Chair Konstantopoulos thanked Mr. Opre and Mr. Kowal for their presentation and service to the Board. 8. UNFINISHED BUSINESS: None. 9. NEW BUSINESS: 9.1. Presentation and Discussion Re: Reallocation of Assets. Presenter(s): Larry Cole, Executive Vice President, Burgess Chambers & Associates. Mr. Cole explained the Plan received an approximate $6.1 million distribution from the JP Morgan Real Book 1 Page 224 04-23-2021 8:15 a.m. Book 1 Page 225 04-23-2021 8:15 a.m. Estate liquidation which should be reinvested. For the quarter ending March 31, 2021, Mr. Cole has an estimated 3.3% total return, and 16.9% fiscal year-to-date return. He proposes rebalancing as stated in his presentation materials as follows: $1.5 million to the Cohen & Steers Global Infrastructure $1.5 million to Lazard Global Infrastructure Fund $1.0 million to Garcia Hamilton Fixed Income $1.0 million to NIS Fixed Income $1.0 million to Sawgrass Fixed Income Mr. Cole noted that although the infrastructure funds are global, the sector would be impacted by passage of a US infrastructure stimulus bill. He stated the portfolio is underweighted in bonds, at about 16.5% versus a target of 25%; while this has served the portfolio well to date, rising interest rates may diminish the momentum in equity markets. Upon question by Chair Konstantopoulos, Mr. Cole stated he trusts global infrastructure because it includes not just roadways, but airports, utility companies with pricing power, water treatment plants, and the like, which will benefit from infrastructure spending. They are more defensive and will pay a higher yield. Trustee Hudgins made a motion to rebalance as Mr. Cole proposed. Vice Chair Todd seconded the motion. The motion carried unanimously (4-0). Mr. Cole cautioned the Board to be mindful, when viewing current performance results, of where the portfolio had been a year ago. 10. ATTORNEY MATTERS: Attorney Christiansen appeared before the Board and introduced himself. Attorney Christiansen noted that the proposed bills in the state legislature have not passed to date but he will continue to monitor them for progress. There is also no update ITMO Van Gostein. Lastly, Attorney Christiansen stated that the proposed ordinance the Board approved at its last meeting is scheduled to go before the City Commission. 11. OTHER MATTERS: None. 12. ADJORN. Chair Konstantopoulos adjourned the meeting at 8:57 a.m. L Chair Demetri Konstantopoulos Seurianyasurds66 Griggs