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LAST UPDATED: Friday, May 30 2008
7:30 Continental Breakfast and Registration 8:30 Co-Chairpersons' Welcome John Day, Assistant Executive Director Emeritus, TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS Timothy Schoolmaster, President, Board of Trustees, EVANSTON POLICE PENSION FUND & Former Executive Director and Founding Member, ILLINOIS PUBLIC PENSION FUND ASSOCIATION 8:45 KEYNOTE ADDRESS Presenter: Richard Berner, Managing Director, Co-Head of Global Economics and Chief U.S. Economist, MORGAN STANLEY 9:15 EXECUTIVE ROUNDTABLE: CHALLENGES IN FUND MANAGEMENT Trustees and directors will discuss the “bigger picture” issues and developments in public pension fund management. Representatives from Illinois largest funds will compare and contrast their views on the first half of 2008 and what lies ahead: • New and noteworthy developments. • Challenges public funds are facing and proposed solutions from a portfolio, constituent and legislative standpoint. • Market volatility and its impact on fund stability Moderator: Emily A. Reid, General Counsel and Chief Compliance Officer, ILLINOIS STATE BOARD OF INVESTMENT Panelists: Jon Bauman, Executive Director, TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS Dan Slack, Executive Director, STATE UNIVERSITIES RETIREMENT SYSTEM OF ILLINOIS David Paredes, Trustee, VILLAGE OF SUMMIT POLICE PENSION FUND Timothy Schoolmaster, President, EVANSTON POLICE PENSION FUND 10:00 ILLINOIS PENSION REFORM According to Governor Blagojevich’s 2009 Budget Proposal pensions have been chronically underfunded since the 1970s. In 2003, the pension systems were only funded at 48% and without reform the state owes 8.5% interest on a $43 billion unfunded pension liability annually, which comes out to $3.7 billion a year. While some progress has been made, such as reducing the state’s long-term 2045 pension liability by $83 billion, pensions are now 63% funded. However there is $43 billion in unfunded pension liabilities. The Governor proposes that the state refinance high-interest pension debt into low-interest pension obligation bonds (POB). • Is this the best solution for Illinois pension woes? • What are the long and short term ramifications to investing in POB’s • Should smaller pension funds take advantage of Fed interest rate cuts and refinance their liabilities? Moderator: Elizabeth Coolidge, Managing Director, SIEBERT BRANDFORD SHANK & CO, LLC Panelists: Dion Smith, Manager of Financial Policy, CHICAGO PUBLIC SCHOOLS John Filan, Chief Operating Officer, STATE OF ILLINOIS Sandor Goldstein, Consulting Actuary, GOLDSTEIN & ASSOCIATES Katrina Clingerman, Associate, ICE MILLER LLP 10:45 Refreshment Break 11:00 CONSULTANT ROUNDTABLE: CHASING RETURNS Investment consultants are advising public pension funds on investment related matters that are requiring increased specialization—e.g. alternative investments. In addition, consultants are now held to a higher level of fiduciary responsibility. This session discusses how consultants advise trustees and support pension fund management within an increasingly complex set of operating rules. • The consultant’s perspective on investment challenges facing public pension funds. • The emerging role of consultants in specialized areas. •Guiding clients through a vast legal web Moderator: Greg Turk, Director of Investments, TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS Panelists: Douglas J. Kryscio, Principal, MERCER INVESTMENT CONSULTING P.J. Kelly, Principal, ENNIS KNUPP & ASSOCIATES Brett Christenson, Managing Director, MARQUETTE ASSOCIATES, INC. Russell Kuhns, Chairman & CEO, R.V. KUHNS & ASSOCIATES, INC. 11:45 WHAT'S AHEAD IN REGULATORY REFORM: STORM CLOUDS ON THE HORIZON? Presenter: Carol V. Gilden, Partner, COHEN, MILSTEIN, HAUSFELD & TOLL, P.L.L.C. 12:00 ASSET ALLOCATION SCORECARD: A REVIEW OF COMPARATIVE INVESTMENT PRACTICES Why do certain public pension funds favor more traditional investments whereas others prefer higher risk investments such as venture capital, private equity and hedge funds? Speakers will discuss asset allocation models and their application in today’s market climate. • What is the present fund flow pattern between equities, bonds, alternatives and cash? • Different approaches to diversification through asset allocation. • Views on alternative investments. Moderator: Stephanie Neely, Treasurer, CITY OF CHICAGO Panelists: Quintin Primo, Chairman and CEO, CAPRI CAPITAL PARTNERS Matt Moran, Vice President, Chicago Board Options Exchange (CBOE) William W. Pierce, Principal, ACCESSALPHA WORLDWIDE LLC 12:45 SOCIALLY RESPONSIBLE INVESTING: CHANGING ITS SPOTS As companies have increasingly embraced corporate responsibility, be it by adopting"greener" policies or a better work environment, it has become clear that such new philosophies are here to stay. Once viewed skeptically by investment professionals, today there is a growing belief that what is good for the environment and society, can be good for investor returns. In this presentation, we want to highlight one pillar of sustainable investing that has gained a great deal of traction over the past few years: the environment. Presenter: Vijaya Govindan, Equity Strategist / Director, UBS GLOBAL ASSET MANAGEMENT 1:15 LUNCHEON Special Featured Speaker: Kwame Raoul, State Senator, 13th District, ILLINOIS GENERAL ASSEMBLY The afternoon sessions will be tracked into two investment categories: Track A - Alternative Investments Track B - Current Trends in Traditional Investment INVESTMENT TRACK A – ALTERNATVE INVESTMENTS 2:15 COMMODITIES AS A HEDGE Commodities are used as a diversifier to the portfolio to insure against fluctuations in markets and innovative products help to realize this concept. As demand has grown, so has the need for advice on how to best allocate commodities within institutional portfolios to maximize their benefits. This session will feature a discussion on the latest developments and strategies. • How can commodities benefit the overall portfolio in a volatile market? • What are the latest trends and innovations? • Challenges of incorporating commodities into a portfolio. • Who is currently using this form of hedging? Moderator: Brett Christenson, Managing Director, MARQUETTE ASSOCIATES, INC. Panelists: Kevin Ireland, National Accounts Manager, ALPS FUND SERVICES Bryan K. Patterson, Portfolio Manager, JPMORGAN ALTERNATIVE ASSET MANAGEMENT Christopher Burton, Vice President, CREDIT SUISSE ASSET MANAGEMENT, LLC 3:00 HEDGE FUNDS VS. FUND OF FUNDS Fund of funds offer due diligence and diversification to public pension funds and have remained the choice over direct investment in individual hedge fund products. This session takes a closer look at fund of funds vs. hedge funds in the areas of transparency, historical rates of return, risk factors and other key determinants. • How are fund of funds performing when compared to hedge funds? • How has recent market volatility affected hedge fund investing? • What returns and risks are involved? • Levels of transparency and other key disclosure areas. • Survivorship bias and performance measurement. Moderator: Stan Rupnik, Chief Investment Officer, TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS Panelists: David C. Saunders, Founding Managing Director, K2 ADVISORS Philippe T. Schenk, Director, CREDIT SUISSE / TREMONT INDEX LLC Cathy Sweeney, Managing Director, MAXAM CAPITAL 3:45 Refreshment Break 4:00 REAL ESTATE: WHERE ARE INVESTORS GOING AND WHAT ARE THE PROJECTIONS FOR RETURNS? Real estate investing offers the possibility of above-market returns, or alpha, but it comes with issues such as performance measurement, monitoring and risk. Real estate investing requires a specialized expertise that often exists only at large retirement systems. How can small plans participate in this asset class and fulfill prudent man investing practices? • Benchmarks for performance for REIT's and direct real estate investments • Local, national and international real estate investing strategies • Risk and when to avoid real estate investments Moderator: Steve Kelso, Finance & Investment Officer, CHICAGO TRANSIT AUTHORITY RETIREMENT Panelists: Rob Kochis, Principal, THE TOWNSEND GROUP Peter Palandjian, CEO & Chairman, INTERCONTINENTAL REAL ESTATE CORPORATION David Morrison, Executive Director, MORGAN STANLEY 4:45 CURRENT TRENDS IN PRIVATE EQUITY Private equity has demonstrated its ability to provide higher returns than typical equity investments. While producing compelling returns relative to public markets, investing in the space can be challenging. What has been the traditional view of private equity and how is it changing for Illinois investors today? In this session, the significant benefits and issues of private equity investing are shared. • Where to look for future opportunity in private equity? • How do you evaluate and screen for investment manager styles? • What are the most effective quantitative and qualitative methods for selecting managers? How can you measure skill? • How to choose a manager that consistently beats the benchmarks? • Are there unique opportunities in IL for private equity? Moderator: John Freihammer, Head of Private Equity Research, THE MARCO CONSULTING GROUP Panelists: Robert Finkel, Managing Partner, PRISM CAPITAL Lamar G. Villere, Senior Investment Officer, TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS Linda Lynch, Managing Director, FISHER LYNCH CAPITAL INVESTMENT TRACK B – CURRENT TRENDS IN TRADITIONAL INVESTMENT 2:15 GLOBAL INVESTING A decade ago plans that utilized global investment strategies had mediocre results. Public pension funds, on average, increased their allocations to international equity in 2006 to 18.3% of the portfolio from 17.8% in 2005. Some say the BRICs (Brazil, Russia, India and China) are the way to go, but there has been some emergence from Eastern and Central European nations lately. • How does global investing fit within a portfolio’s allocation? • What are the unique opportunities and risks to global investing? • What are important barriers to consider when investing in emerging markets? • What new strategies and countries are worth watching for the next wave of opportunities? Moderator: Shane Schurter, Senior Investment Analyst, ENNIS KNUPP & ASSOCIATES Panelists: Brian Dillon, Portfolio Manager, Structured Emerging Markets Strategy,EATON VANCE MANAGEMENT Heather Flick McMeekin, Security Analyst / Portfolio Manager, TURNER INVESTMENT PARTNERS, INC. Chris Davis, Vice President and Portfolio Specialist, FISHER INVESTMENTS 3:00 INFRASTRUCTURE INVESTING While already established in Australia, Canada and Europe, infrastructure as an asset class is just emerging as a new investment strategy in the United States. Recent headlines highlight a variety of infrastructure assets, including toll roads, airports, seaports, water distribution, wastewater collection, electricity transmission and distribution. Learn about this asset class. • Why long-term investors are attracted to infrastructure investing • Infrastructure investment’s return profile • Infrastructure’s low-to-negative correlation with other asset classes such as equity, fixed income and real estate Moderator: Douglas J. Kryscio, Principal, MERCER INVESTMENT CONSULTING Panelists: Edward Keating, Client Portfolio Manager, LAZARD GLOBAL LISTED INFRASTRUCTURE Ben Heap, Senior Investment Executive, Infrastructure Asset Management, UBS GLOBAL ASSET MANAGEMENT Michael Smerdon, Managing Director - MACQUARIE CAPITAL FUNDS 3:45 Refreshment Break 4:00 EQUITIES: PERFORMANCE SCORECARD During volatile market conditions, investors evaluate their equity programs for value and tend to move toward quality. This session compares performance of various equities. • An overview of the equities matrix • Current performers • New opportunities within the matrix • The impact of equities on overall fund performance Moderator: Joseph G Costello, Chief Financial Officer, REGIONAL TRANSPORTATION AUTHORITY Panelists: Sean O'Hara, President, REVENUESHARES INVESTOR SERVICES Richard L. Potter, Principal, BECKER, BURKE ASSOCIATES 4:45 FIXED INCOME: PROTECTING RETURNS FROM EROSION Inflation has the greatest negative impact on fixed income returns. In this session, we address current economic conditions and their impact on fixed income portfolios. • How to protect return erosion during inflationary, deflationary & stagflation periods. • Planning for the long term and protecting against short term volatility • Strategies for current conditions. Moderator: Scottie D. Bevill, Senior Investment Officer - Global Bonds and Real Return, TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS Panelists: Kristen S. Monson, Executive Vice President, PIMCO Daniel D. Dolan, Managing Member, DOLAN MCENIRY CAPITAL MANAGEMENT, LLC 5:30 Cocktail Reception hosted by:  LAST UPDATED: Tuesday, May 27 2008
8:00 Continental Breakfast 9:00 LEGISLATION AND POLICY UPDATES Local pension plan leaders are in constant dialogue with constituents on issues, problems and concerns of membership. This session explores the statewide and national agenda and proposed changes that will no doubt affect you and your members. Learn of new policy initiatives and determine how they are going to impact your community. • Funding of municipal police and fire funds • Legislative priorities and regulatory changes • Oversight update Moderator: John Day, Assistant Executive Director Emeritus, TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS Panelists: Chris Lauzen, State Senator, STATE OF ILLINOIS, 25TH DISTRICT James M. McNamee, President / President, ILLINOIS PUBLIC PENSION FUND ASSOCIATION / BARRINGTON POLICE PENSION FUND 9:45 EFFICIENT RISK MANAGEMENT IN PUBLIC PENSION PLANS In the context of managing public pension portfolios, defining appropriate risk metrics is important for both balancing the interests of participants and taxpayers (current and future), and detecting potential capital inefficiencies in current asset allocations. Factors ranging from inflation indexation to sources of tax revenues should prompt public plans to further seek exposure to real assets and other types of alternatives investments. Additionally, modern immunization strategies can be used to provide attractive potential return expectations while mitigating concerns that many Treasury departments have with issuing pension obligation bonds. Presenter: Chad Hueffmeier, Executive Director, MORGAN STANLEY 10:15 THE SUDAN ACCOUNTABILITY AND DIVESTMENT ACT OF 2007 At the end of 2007 President Bush signed the Sudan Accountability and Divestment Act of 2007, which authorizes "state and local governments to divest assets in companies that conduct business operations in Sudan, to prohibit United States Government contracts with such companies, and for other purposes." Our panelists will discuss the specifics of this new law and what it means for managers and boards. • How will fund managers comply with divestment legislation and social investment mandates while growing their portfolios? • The impact of forbidden investments on various assets classes: global equities, private equity, domestic funds etc. Presenter: Adam Sterling, Director, SUDAN DIVESTMENT TASK FORCE 10:45 REFRESHMENT BREAK 11:00 MWOB/EMERGING MANAGERS Every year all Illinois pension funds appear before the State Senate Select Committee to testify on their utilization of MWOB investment managers and brokerage firms. The committee feels that there are good MWOB managers and brokers out there. Who are they and what means have the funds used to locate these firms? How does their performance compare to other firms? What funds have used a manager of manager program and graduated MWOB managers. Should the funds do their own due diligence on brokers to create a qualified list of brokers? How can the list of good MWOB firms be shared in order for us to increase utilization? • Goals of the Illinois Select Senate Committee in requiring data • Criteria for MWOB and emerging designation • Appropriate use of designation during RFP process • Creation of an approved brokerage list Moderator: Timothy Schoolmaster, President, EVANSTON POLICE PENSION FUND Panelists: Ivory Day, Senior Consultant/Senior Advisor, GREY & COMPANY/UNITED INVESTMENT MANAGERS Leslie F. Bond, Jr., Senior Managing Director, ATTUCKS ASSET MANAGEMENT 11:45 FIDUCIARY RESPONSIBILITY: IMPLICATION FOR ILLINOIS PENSION FUNDS AND THE EMERGENCE OF GUIDING PRINCIPLES After a turbulent year, it is apparent that there needs to be an emphasis on principled practices and standards of performance. How are best practices evolving and how does one stay on top of the many changing expectations and accountabilities? This session will review the evolving standards for fiduciaries and emerging markets in everyday decision making as well as methods for avoiding the unintended consequences of not being aware of or adhering to best practices. • Raising the bar • How do you know when you are meeting your fiduciary responsibilities? • Implementing ethics policy and guidelines • Comprehending the various layered state and local ethical rules and regulations and applying them to daily decision-making Moderator: Alex Rivera, Actuary, GABRIEL, ROEDER, SMITH & COMPANY Panelists: Tony Halachoulis, President, MOUNT PROSPECT ILINOIS POLICE PENSION FUND Anthony Martin, Trustee and Recording Secretary, CHICAGO FIREMEN'S ANNUITY & BENEFIT FUND David Paredes, Trustee, VILLAGE OF SUMMIT POLICE PENSION FUND 12:30 Illinois PERS Summit Concludes | |||||||||||||||||||||||||||||
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