[{"_1":2,"_87":-5,"_88":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,75],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},"mediaId",6677122,"mediaKeyId","2273380-29cd37cf471081d4c89712e8565702aa","parentId",2273380,"title","Baillie Gifford acknowledges four years of underperformance; consultants to study international allocation","audioSeconds",1767,"startMs",1269000,"endMs",3036000,"viewUrl","/Search/View?dp=1&key=2273380-29cd37cf471081d4c89712e8565702aa&start=1269&end=3036","thumbnailUrl","https://assets.pipeline.soar.com/2273380-29cd37cf471081d4c89712e8565702aa/thumbnail_1269000.jpg","articleUrl","/articles/6677122/Lexington-City/Fayette-County/Kentucky/Baillie-Gifford-acknowledges-four-years-of-underperformance-consultants-to-study-international-allocation","mediaUrl","https://secure.pipeline.soar.com/6677122-f34fe65ce5bfd3a4646a28687f32df04/orig.mp4?Expires=1771186306&Signature=A5TydaW9J2YAj8HgMeseo~sBtPHFrjMNtCwH-iAdrZwEWlSZ-TooIedohfVCaSLLZ~a0xBtjv3M6WnHaQk2p4OysRufW56nYTIdWQZ8nlOmRZf8Cw0gxTQbY6sRetw2LNY4FHCvdGSIdnq1QdXTNL9fZhr18vkaKCS6y3MYO0aB0lJXF5c359dCP5jywgR8sLejdUYv~yRTrTfDv-rerDwsYBL7EWuQF5KJgsrfr4MBiFJ6r8aymFlLz9Er0YDE1KRrzLVMI2YVO-Fvr5o0ndmTTB3n20V2hSAawoINTYmM8w4gdvcUuigOzcLm-U-7KyPYOmIva59nZ9HtJ5DVq6Q__&Key-Pair-Id=KUT5TJCACFTXG","author","Lexington","date","2025-02-12T00:00:00Z","article","Baillie Gifford investment staff told the Lexington Fayette Urban County Government Police and Fire Retirement Fund board on Feb. 12, 2025, that their international growth strategy has underperformed for four calendar years and described changes they say are intended to restore long-term outperformance.

\"Our long term delivered returns have, quite frankly, not been good enough,\" Baillie Gifford relationship director Kelly Cameron said during a presentation to the board. Portfolio co-presenter Ian Campbell, the firm's chair of the international all-cap investment team, said the strategy continues to pursue a long-term, bottom-up growth approach and that the firm measures success over five-year rolling periods: \"we aim to deliver outperformance over ruling 5 year periods.\"

Why it matters: Baillie Gifford manages roughly 7% of the fund — cited in the meeting as about $66.67 million — and the board and its consultant said they are considering structural changes to the fund's international allocation if the manager-level review and performance do not improve.

What Baillie Gifford told the board

Campbell and Cameron told trustees the strategy's recent weak returns stemmed from a shift in market leadership after 2020: growth-oriented stocks that benefited in the low-rate, COVID-era environment lost ground as inflation rose and interest rates moved higher. The presenters said the firm underestimated the timing and magnitude of those market shifts and acknowledged they should have trimmed certain high-flying holdings earlier.

Campbell described procedural and resourcing changes Baillie Gifford has made to address the problems: added personnel for the strategy, a dedicated central desk for the portfolio, increased interaction with the firm's risk team, more reporting on individual-stock and portfolio valuations, and a formal quarterly review of overweight and underweight sectors to force greater breadth in holdings.

Campbell said these measures aim to keep the firm \"resolute in our overarching philosophy,\" while giving it more ability to react to valuation extremes and concentration risks.

Board questions and clarification

Board members pushed for timelines and concrete metrics. Commissioner Armstrong asked about the size of the Baillie Gifford mandate and the firm's Assets Under Management for the strategy; the presentation cited the fund's Baillie Gifford holding as approximately $66.67 million and about 7% of the pension plan. When asked about regional exposure, Campbell said, \"we have, about 13% of the portfolio in emerging markets listed companies... In Japan, it's about the same, we're at 13 to 14% of the portfolio invested in Japanese companies.\"

Officer Jennings asked how the firm defines \"long term.\" Campbell replied, \"we aim to deliver outperformance over ruling 5 year periods,\" repeating the five-year rolling performance objective the firm uses.

Consultant response and next steps

John Jackson and Jim O'Connor, the pension fund's investment consultants, told the board they were concerned chiefly about the \"persistency of the underperformance\" but did not recommend an immediate, unilateral termination of the manager. Jackson said the consultants will complete a broader asset-liability study and an international equity structure study to determine whether the plan's overall international allocation or the mix of managers should be changed. \"If it lends itself to a mitigation of some of the growth bias that's present in the Baillie Gifford portfolio, we're prepared to do that,\" Jackson said.

Manager-level updates

Consultants briefed the board on unrelated manager developments they are monitoring: Dodge & Cox's CEO succession, a portfolio management shift at J.P. Morgan's strategic property fund, a new CEO at MacKay Shields, and ongoing review of CI Financial's pending sale of Siegel, Brian & Hamill to Mubadala (an ownership change the consultants said they would monitor but that had not, as of the meeting, prompted any immediate action).

What happens next

Trustees asked the consultants to finish the asset-liability and international-equity structure reviews and return with recommendations on whether to keep, reduce or replace Baillie Gifford or otherwise alter the plan's international allocation. The board did not take a vote on manager termination or reallocation at the meeting.

Ending

Baillie Gifford's presenters closed by urging patience and reiterating their long-term, bottom-up growth approach; the board's consultants signaled a follow-up report to the trustees once the studies are complete.","mediaType","Video","parentTitle","Lexington - Police & Fire Pension Board Meeting - Feb 12, 2025","oneSentenceSummary","Baillie Gifford investment staff told the Lexington Fayette Urban County Government Police and Fire Retirement Fund board on Feb. 12, 2025, that their international growth strategy has underperformed for four calendar years and described changes they say are intended to restore long-term outperformance.","taxTitle","Lexington City, Fayette County, Kentucky","taxId",5707,"location","headline","","shortSummary",{"_33":76,"_35":36,"_37":38,"_39":77,"_41":78,"_43":79,"_45":80,"_47":81,"_49":82,"_51":83,"_53":84,"_55":56,"_57":58,"_59":85,"_61":62,"_63":64,"_65":86,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},6677118,"Lexington Police & Fire Retirement Fund board approves routine business, Callan extension and support letter for House Bill 146",202,1034000,1236000,"/Search/View?dp=1&key=2273380-29cd37cf471081d4c89712e8565702aa&start=1034&end=1236","https://assets.pipeline.soar.com/2273380-29cd37cf471081d4c89712e8565702aa/thumbnail_1034000.jpg","/articles/6677118/Lexington-City/Fayette-County/Kentucky/Lexington-Police-Fire-Retirement-Fund-board-approves-routine-business-Callan-extension-and-support-letter-for-House-Bill-146","https://secure.pipeline.soar.com/6677118-181e5de17f36c70d474c0ee7c145dea2/orig.mp4?Expires=1771186306&Signature=hc4B0FvZ7P5Cf0RODK8nfCKjY-lLKYIQbHXyNHeFWfZ4QS89cLYdyPUYqYWfmE0iRCQyDYY261YDjfkCiCK8w6QJKpJe8pasjI6zUzrE0zqF8Pa-X42uXf2jnAOIboIFEp34a41QP-c0M-FSfyze9ZVQTpc7GHsQalQSK~onX8d7O63obMO6xCo4qDFz7nGImLtc2f9h6I5dQan39VrbcWea8uVpvleJoEjqZsticoyJ6dZS~3B08kHSF3xgFe4CfkVz-LKbp2WkR7Azmci6fcR6YtK3np9UMvBHaShiOHuW1bEM0VcQJKhzqvg3OOQJX3rVd8Sw3C~DTisw4Ol4GQ__&Key-Pair-Id=KUT5TJCACFTXG","The Lexington Fayette Urban County Government Police and Fire Retirement Fund board met Feb. 12, 2025, and voted on a slate of routine and programmatic items, including approval of the treasurer's report, minutes, purchases and pension disbursements, referral of disability applications to physicians, a two-year contract extension with Callan, and authorization to send a letter of support for House Bill 146 contingent on a short review window.

Votes at a glance

- Motion to move agenda items requiring votes to the start of the docket — Passed (voice vote). The board adopted the procedural motion so items needing a vote could be heard early because quorum concerns were anticipated later in the meeting.

- Treasurer's report and transfer letter — Motion to accept the treasurer's report and the transfer letter: Passed (voice vote). No roll-call tally recorded in the transcript.

- January minutes — Motion to approve: Passed (voice vote).

- Item 1: Military purchases for Daniel Meyer — Motion to approve: Passed (voice vote).

- Item 2: Ghost town purchases for Jason Wallace — Motion to approve: Passed (voice vote).

- Item 3: Widow's annuity for Carolyn Meadows — Motion to approve: Passed (voice vote).

- Item 4: Callan contract extension — Motion to extend Callan's contract (two-year term) : Passed (voice vote). The board approved extending the Callan contract as presented in the meeting packet.

- Item 6: Disbursements for February — Motion to approve listed disbursements: Passed (voice vote).

- Disability referrals (sent to appropriate doctors): Katherine Sullivan (police); David Baker (fire); Gregory Lingle (fire); Brian Lilly (fire); Jamie Tinsley (fire) — Motions to send each application to appropriate medical examiners: Each motion passed (voice votes). The board recorded questions and clarifications during discussion but directed that the applications be sent for medical review.

- Motion to send a letter to the House Appropriations Committee expressing support for House Bill 146 (which would increase the dollar threshold for pension income excluded from state taxes): Motion passed. The board approved sending the letter on the condition that staff circulate the bill text and that a majority of board members indicate support after reviewing the text within the short timeline discussed (consultant/staff suggested responses by the next business day). One trustee said they might abstain if they had not read the bill; the motion passed by voice vote.

Other business and acknowledgements

- The board heard recognition of the recent death of Ronald Meadows, Division of Fire, noted as passing on Jan. 18, 2025; chiefs and board members extended condolences.

- The board received several managerial and consultant presentations (Baillie Gifford, and an update from consultants on managers and allocation); those were discussion items and did not require votes beyond the studies and next steps described elsewhere in the meeting.

Ending

With those items concluded the board adjourned by voice vote.

Notes on vote records: The transcript records repeated voice votes (","At its Feb. 12, 2025 meeting the Lexington Fayette Urban County Government Police and Fire Retirement Fund board approved routine financial items, authorized medical referrals for disability applications, extended the Callan contract and voted to send a support letter on House Bill 146 contingent on board review.","actionData","errors"]

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Baillie Gifford acknowledges four years of underperformance; consultants to study international allocation

Lexington Police & Fire Retirement Fund board approves routine business, Callan extension and support letter for House Bill 146