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LAST UPDATED: Friday, January 25 2008
7:15 CONTINENTAL BREAKFAST AND REGISTRATION 8:15 CONFERENCE OPENING Albert Neubert, Senior Vice President Business Development, INFORMATION MANAGEMENT NETWORK 8:25 WELCOME TO DELEGATES Richard Cordray, Treasurer, STATE OF OHIO 8:40 KEYNOTE ROUNDTABLE: GLOBAL & NATIONAL ECONOMIC OVERVIEW FOR THE PUBLIC RETIREMENT SYSTEM COMMUNITY What is the consensus of pundit views on todays world and national economies and their economic forecasts for the next five years? How will economic cycles affect particular investments? What can be done to keep plan portfolios performing in the economic environments to come? Moderator: William J. Estabrook, Executive Director, OHIO POLICE & FIRE PENSION FUND Presenters: James W. Coons, Principal and Economist, COONS ADVISORS Michael Grupe, Executive Vice President - Research & Investor Outreach, NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS (NAREIT) James E. Newton, Chief Economist, COMMERCE NATIONAL BANK; President, ECONOMIC PERSPECTIVES, INC; Adjunct Professor Economics, THE OHIO STATE UNIVERSITY (Marion and Newark Campuses) 9:40 PRESENTATION: ASSET/LIABILITY MANAGEMENT STRATEGIES TO ENHANCE THE PENSION FUNDED RATIO The pension funded ratio has not improved in the last five years, nor the last 20 years, leading to higher pension contributions and cost. By focusing on asset/liability management strategies, pensions can enhance their funded ratio and reduce costs and risks. Presenters: Ronald J. Ryan, CFA, Chief Executive Officer, RYAN ALM, INC. 10:25 REFRESHMENT BREAK 10:40 FIDUCIARY RESPONSIBILITY IS YOUR STAFF AND BOARD ON THE RIGHT TRACK? Fiduciary responsibility is a term that has gained renewed importance in the wake of personal and group misdeeds and mis-judgments in the public retirement arena. To avoid the potential for breaches of fiduciary responsibility, experts believe that every public retirement system staff and board member should have sufficient education so they may understand what it means to be a fiduciary and their responsibilities to the retirement plan and its participants. Also, staff and board members should be aware of the potential legal actions that could arise and the consequences of fiduciary responsibility breaches. What types of educational training should board and staff members have to be confident that they are aware of and understand their fiduciary responsibility? What should management do to ensure board and staff members receive sufficient fiduciary education and training? What are some of the consequences and legal actions that may be taken when fiduciary responsibility has been breached, using examples of recent litigation? Introduction: Lisa Morris, Deputy Executive Director, SCHOOL EMPLOYEES RETIREMENT SYSTEM OF OHIO Presenters: Mary Willett, Consultant/Owner, WILLETT CONSULTING Susan Mangiero, President and CEO, PENSION GOVERNANCE, LLC 11:20 CASE STUDY: WHAT CAN BE LEARNED FROM SAN DIEGOs INVESTMENT IN AMARANTH ADVISORS? In a recent filing with the United States District Court, Southern District of New York, the San Diego County Employees Retirement Association alleges fraud relating to (among other issues) the hedging policies of now defunct hedge fund, Amaranth Advisors. In response, Amaranth filed a motion to dismiss, citing the pension plans duty to investigate risks before allocating monies. What lessons can we learn from this situation? This case study addresses operational risk, derivatives trading, valuation, trading limits and fiduciary oversight of external money managers. • Who is responsible for monitoring investment risks? • What red flags should pension funds identify before investing in hedge funds? • Once invested, how can pension funds stay on top of potential problems? • How do fiduciary best practices extend to the hiring, assessment and possible firing of portfolio managers for other types of assets and strategies? Presenter: Susan M. Mangiero, Ph.D., AVA, AIFA, CFA, FRM, President and CEO, PENSION GOVERNANCE LLC 12:00 NETWORKING LUNCHEON 1:30 ROUNDTABLE: TRENDS IN ASSET ALLOCATION How important is the role of asset allocation? How often should plan asset allocation be reviewed and adjusted? How can the right asset allocation strategies help to avoid a funding crisis? What are the U.S. trends in asset allocation for equities? How will new asset classes and approaches affect allocation decision-making? Moderator: Brandi L. Wust, Senior Consultant, EVALUATION ASSOCIATES LLC Panelists: Edward H. Friend, FSA, FCA, EA, President, EFI ACTUARIES James L. Haskel, Director of Portfolio Strategy, BRIDGEWATER ASSOCIATES Jeb Graham, CEBS, CIMA, Retirement Plan Consultant, CAPTRUST 2:20 ROUNDTABLE: ACTIVE AND PASSIVE - A HAPPY MARRIAGE OR A HOSTILE SEPARATION? Should indexing be confined to large cap equities? Why indexing works in all asset classes How do you determine an optimal blend of active and passive strategies Should enhanced indexing substitute for plain vanilla strategies? Moderator: R. Keith Overly, Executive Director, OHIO DEFERRED COMPENSATION Panelists: Albert S. Neubert, Executive Director, INDEX BUSINESS ASSOCIATION Len Haussler, President and Portfolio Manager, OPUS CAPITAL GROUP Paul Brakke, Senior Managing Director, STATE STREET GLOBAL ADVISORS 3:15 REFRESHMENT BREAK 3:30 ALTERNATIVE INVESTMENTS - MORE QUESTIONS THAN ANSWERS? Pension plan sponsors are increasingly investing in a range of alternative asset classes that are not typically included in standard asset allocations to diversify their portfolios. Sizeable investment inflows have taken place into convertibles, private equity, real estate and timber, to name but a few. How do alternative asset classes create value in an investors portfolio? How should alternative investments be evaluated in todays complex financial markets? Which asset classes are right for your allocation based upon risk tolerance and liquidity needs? What policy considerations need to be evaluated to integrate alternative asset classes? Introduction: Dick Curtis, Executive Director, OHIO HIGHWAY PATROL RETIREMENT SYSTEM Presenters: Christopher Baucom, Managing Director, FORT WASHINGTON CAPITAL PARTNERS GROUP Hart Woodson, Managing Director and Portfolio Manager, ADVENT CAPITAL MANAGEMENT 4:25 CONSIDERING 130/30 STRATEGIES Loosening long-only constraints on equity managers in pursuit of higher alpha has gained adherents among institutional investors in recent years in the form of 130/30 investment strategies. While product offerings weigh heavily on quantitative investment processes, fundamentally managed 130/30 strategies are becoming more prevalent. This review of different investment approaches to 130 investing can provide insight for managers considering 130/30 as well as add perspective for investors who may be invested in a quantitative strategy already and seek to diversify to a fundamentally-managed strategy. Presenters: Douglas Kryscio, CFA, Consultant, MERCER INVESTMENT CONSULTING Jim Dwinell, Vice President and US Equity Investment Director, PYRAMIS GLOBAL ADVISORS 5:05 THE RATIONALE FOR ADDING EMERGING MARKET INVESTMENTS There are more than 150 emerging market economies in the world today. That figure alone suggests that there may be some attractive and quality global investment opportunities. However, the savvy and prudent public retirement investment manager knows that these opportunities need to be examined carefully with the help of current research or a proven external emerging markets manager. What investment styles and strategies have proved to be the top-performers in the recent past and is this a good predictor of the future? Should these investments be considered long-term opportunities? If so, why? What are the diversification benefits of these investments? Introduction: James R. Winfree, Executive Director, SCHOOL EMPLOYEES RETIREMENT SYSTEM OF OHIO Presenters: Ardra Belitz, Director and Portfolio Manager, LAZARD ASSET MANAGEMENT Kristin Finney-Cooke, Consultant, MERCER INVESTMENT CONSULTING 5:45 COCKTAIL RECEPTION 6:30 DINNER FOR ALL DELEGATES Dinner Speaker: Peter J. Gardner, CFP, CFA, CIMA, Senior Investment Consultant, CAPTRUST LEARNING FROM EMBARRASSING MISTAKES IN FLORIDA Several pools of capital in the State of Florida made national headlines last year due to potential monetary losses and/or alleged conflicts of interest. In late 2007, the State of Florida municipal fund incurred significant withdrawals in a run on the bank, leading to a subsequent freezing of the fund, part of which remains illiquid still today. Earlier in the year, the Wall Street Journal reported that a major investment house was implicated in a lawsuit for failing to adequately disclose compensation arrangements on certain public retirement plans in Florida. At the heart of the problem is the question of independence and objectivity. 1:30 MANAGING THE RELATIONSHIP BETWEEN BOARD AND STAFF As in any organization, things do not always go smoothly between internal entities. Upon examination, the contributing factors for this phenomenon, such as duplication of responsibilities, cross-purposes, personality clashes, etc., could be endless. What are some of the most notable reasons for rocky relationships between public plan board and staff members? Have some organizations managed to improve their relationships and how did they do it? What process can be put in place to keep improving? Moderator: John K. Boudinot, Executive Director, CINCINNATI RETIREMENT SYSTEM Panelists: Linda J. Dawson, Senior Partner, ASPEN GROUP INTERNATIONAL LLC Mary M. Eicholtz, Assistant Professor Communication, MT. UNION COLLEGE 2:20 IS AN ON-STAFF ACTUARY BENEFICIAL TO YOUR PLAN? What is the best way to approach this decision? Who should be involved in making the decision? What are the determining factors that should be explored? Should the decision be revisited and when? Introduction: Damon Asbury, Executive Director, STATE TEACHERS RETIREMENT SYSTEM OF OHIO Moderator: E. William Butler, Pension Consultant, ARDMORE CONSULTANTS, LLC Panelists: Edward H. Friend, FSA, FCA, EA, President, EFI ACTUARIES Robert Slater, Chief Financial Officer, STATE TEACHERS RETIREMENT SYSTEM OF OHIO Tom Cavanaugh, Chief Executive Officer, CAVANAUGH MACDONALD CONSULTING, LLC 3:15 REFRESHMENTS 3:30 THE FUNDING CONUNDRUM WHAT CAN BE DONE? There are state and local retirement systems that already are under-funded or dangerously close. Even plans that currently are over-funded must be diligent. They may be facing funding pressure in the near future due to world and national economic conditions, a growing number of retirees or increasing costs. What are the current actuarial assumptions and what is their impact on funding status? How does the trend toward Financial Economics and Liability Driven Investing impact funding? What is the appropriate response when projections indicate that there wont be enough assets to cover liabilities? How does the lifting of certain investment restrictions play into this issue? Why is fund asset allocation increasing in importance? What other creative solutions to funding problems are being utilized across the country? Introduction: Robert Theller, JD, MBA, Investment Officer Public Markets, OHIO POLICE & FIRE PENSION FUND Presenter: William B. Fornia, FSA, EA, Senior Vice President Public Sector Practice, AON CONSULTING 4:30 DEVELOPING AND MAINTAINING A "BEST PRACTICE" INTERNAL AUDITING FUNCTION Operational risks of money managers: if you are not auditing them, what then? Sections of the IIA Research Foundation CBOK Steves Top 10 List of Best Practices Presenter: Steven M. Harding, CPA, Senior Vice President, INDEPENDENT FIDUCIARY SERVICES 5:45 COCKTAIL RECEPTION 6:30 DINNER FOR ALL DELEGATES Dinner Speaker: Peter J. Gardner, CFP, CFA, CIMA, Senior Investment Consultant, CAPTRUST LEARNING FROM EMBARRASSING MISTAKES IN FLORIDA Several pools of capital in the State of Florida made national headlines last year due to potential monetary losses and/or alleged conflicts of interest. In late 2007, the State of Florida municipal fund incurred significant withdrawals in a run on the bank, leading to a subsequent freezing of the fund, part of which remains illiquid still today. Earlier in the year, the Wall Street Journal reported that a major investment house was implicated in a lawsuit for failing to adequately disclose compensation arrangements on certain public retirement plans in Florida. At the heart of the problem is the question of independence and objectivity. LAST UPDATED: Friday, January 25 2008
7:30 CONTINENTAL BREAKFAST 8:15 DAY TWO OPENING REMARKS Aristotle Hutras, Director, OHIO RETIREMENT STUDY COUNCIL 8:30 FEATURED PRESENTATION: HEDGE FUND PERFORMANCE - FACT OR FICTION? Dr. Karolyi is an internationally-known scholar in the area of investment management with a specialization in the study of international financial markets. He has published extensively in and serves as an associate editor for a variety of top-tier journals in financial economics. He is a past recipient of the William F. Sharpe Award for Scholarship. During this presentation, Dr. Karolyi will share his survey of the recent research evidence on hedge fund performance. Presenter: G. Andrew Karolyi, Charles R. Webb Professor of Finance Fisher College of Business, THE OHIO STATE UNIVERSITY 9:10 PRESENTATION: PRIVATE EQUITY: CHARACTERISTICS AND ISSUES Many pension plan sponsors are adding or increasing allocations to private equity. While private equity offers compelling returns relative to public markets, investing in the space can be challenging. Significant return dispersion, lack of mark to market pricing, the limited number of transactions and realizations in most portfolios, differing reporting standards, and appropriate benchmarking are some of the major issues that will be discussed. Direct vs. fund of funds investment strategies will also be examined. Presenter: William T. (Billy) Charlton, Jr., Ph.D., CFA, Managing Partner, CONTEXT PRIVATE EQUITY ALPHA 9:40 ROUNDTABLE: ECONOMICALLY TARGETED INVESTING OR ETI WHAT CAN IT MEAN TO THE INVESTORS AND FOR THE STATE OF OHIO? Economically targeted investing is meant to provide a current rate of return for the investor as well as having the entity that receives the capital benefit positively. That's why there are strong advocates of ETI in Ohio who believe that a portion of state pension fund assets should be allotted to this type of investment. How has the rate of return compared to other types of investments historically? How would a lower rate of return fit with mandates for optimization of investment return and fiduciary responsibility? What actually has been accomplished in the past year or two because of ETI in Ohio? What are some of the ETI investments available to Ohio public funds today and in the near future? How will these benefit Ohio and our constituents? Introduction: Christopher DeRose, Executive Director, OHIO PUBLIC EMPLOYEES RETIREMENT SYSTEM Moderator: Albert Neubert, Senior Vice President - Business Development, INFORMATION MANAGEMENT NETWORK Panelists: John Logue, Professor of Political Science and Director of the Ohio Ownership Center, KENT STATE UNIVERSITY Melford Carter, In-State Investment Specialist, CREDIT SUISSE 10:20 REFRESHMENT BREAK 10:35 AN OVERVIEW OF THE REAL ESTATE INVESTMENT PROPOSITION How can public retirement plan sponsors access the real estate investment marketplace? How are plans using real estate within their portfolios? Public and private investment in real estate What are the differences? Considerations for plan sponsors in deciding how to use real estate within their pension plan Global Real Estate Investment What is the global investment opportunity in real estate? What choices are there in implementing a global real estate investment program? Introduction: S/Lt. John R. Allard, Board Chair, OHIO HIGHWAY PATROL RETIREMENT SYSTEM Panelists: Michael Grupe, Executive Vice President - Research & Investor Outreach, NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS (NAREIT) 11:10 TRUSTEE EDUCATION AND THE POLICY FOCUSED BOARD Retirement boards oversee sophisticated administration and risk management systems and in the aggregate, trillions of dollars of assets. All this in a fish bowl! There is a growing awareness that the importance and increasing complexity of retirement systems call for new approaches, whereby the boards can keep up with the complexities of these systems without radical changes in the enabling legislation and governance practices. This presentation will: Describe the financial model of the DB pension plan with the associated risks Summarize the Clapman Report Suggest a management model on how such a system can be overseen by boards Present the findings of a dedicated research project into effective board education and orientation practices Introduction: E. William Butler, Pension Consultant, ARDMORE CONSULTANTS, LLC Presenter: Dr. John T. Por, Founding Principal, CORTEX APPLIED RESEARCH INC. 12:15 CONFERENCE CLOSING | ||||||||||||||||||||||||||||||
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