Oklahoma City Employee Retirement System receives Earnest Partners investment portfolio update

The Oklahoma City Employee Retirement System convened on May 8, 2025, to discuss key updates and reports concerning the management of the city’s retirement funds. The meeting commenced promptly at 10:00 AM, with the first agenda item focusing on the election report, which was approved following a motion and a second. The minutes from the previous meeting held on April 10, 2025, were also approved without objection.

A significant portion of the meeting was dedicated to a presentation by Earnest Partners, represented by Trey Greer. Greer provided an overview of the firm, which has been managing a portion of the retirement system's portfolio since February 2003. Currently, Earnest Partners oversees approximately $50 million, representing about 5% of the overall portfolio, focusing on small to mid-cap value investments. This strategy complements the existing small-cap growth management by Silvercrest.

Greer emphasized the firm’s commitment to a long-term investment strategy, highlighting their approach of selecting undervalued companies rather than making speculative bets on market trends. He noted that the firm maintains a low turnover rate of about 20%, indicating a focus on stable, long-term investments rather than frequent trading.

The presentation also addressed current market conditions, particularly the impact of tariffs and recession fears on small and mid-cap companies. Greer pointed out that small-cap stocks have underperformed compared to large-cap stocks for five consecutive years, primarily due to market volatility and economic uncertainty. He expressed optimism about the eventual recovery of small-cap valuations, which are currently trading at a significant discount compared to historical norms.

In discussing sector performance, Greer noted that utilities have emerged as the best-performing sector this year, driven by a return to basic needs during economic uncertainty. Conversely, the information technology sector has struggled, largely due to its high volatility and reduced merger and acquisition activity amid market uncertainty.

The meeting concluded with a reaffirmation of the retirement system's diversified investment strategy and a commitment to monitoring market trends closely. The next steps will involve continued collaboration with Earnest Partners and ongoing assessments of the portfolio's performance in light of evolving market conditions.