[{"_1":2,"_98":-5,"_99":-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",[32,75,87],{"_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",6560416,"mediaKeyId","3340621-af2e60ac5bd3cd7bdfbf709f5139b7b4","parentId",3340621,"title","Public equity team reports outperformance in 2023–24, portfolio diversification and new construction framework","audioSeconds",161,"startMs",4406000,"endMs",4567000,"viewUrl","/Search/View?dp=1&key=3340621-af2e60ac5bd3cd7bdfbf709f5139b7b4&start=4406&end=4567","thumbnailUrl","https://assets.pipeline.soar.com/3340621-af2e60ac5bd3cd7bdfbf709f5139b7b4/thumbnail_4406000.jpg","articleUrl","/articles/6560416/San-Francisco-City/San-Francisco-County/California/Public-equity-team-reports-outperformance-in-202324-portfolio-diversification-and-new-construction-framework","mediaUrl","https://secure.pipeline.soar.com/6560416-b75c1969f9ac1a7d1a531384515f6fc4/orig.mp4?Expires=1775443486&Signature=d4OA2TwCh~Vqp5p6DY9rmqpD~HjvHbJfWjSJofa-yY5lTu9oCPOtzkT5kmWzd4ZakoYAD29FDKA58OkAjaGXaCiFEe9r9oV1ISRyb3w8uwXwvPnooiGL-p5jiqfxq8Liif-0J9SZUOq46blfHGuQTa~zgMohYoAi7KtsILL56A4JdHobuuxuJ~D5vb43fHYoFJGI71~FQZYz4E9yFls0dcMsFSk1nMtlKxCItxhAYfSOClWBZd3rGRxyM1dhVKrco7~C9gzlw2-WgDBPJvvcEEX~Z07PviM7VvtSXIaW0b0xTJOPAL19mYjVgTQOaT45sDwiuRDgfT~9Ae5lZZz-2g__&Key-Pair-Id=KUT5TJCACFTXG","author","City of San Francisco","date","2025-05-14T00:00:00Z","article","The San Francisco Retirement Board’s public equity team presented its annual review on May 14, 2025, reporting outperformance versus the MSCI All Country World Index in 2023 and 2024, a programmatic reduction of direct China exposure, and a new portfolio-construction framework designed to increase the role of idiosyncratic (stock) selection in driving returns.

Presenters said the public equity portfolio represented about 29% of plan assets at the end of 2024. The team reported the public equity portfolio returned 16.8% in calendar year 2024 versus a 16.4% return for its benchmark; the team emphasized that the outperformance occurred while holding lower relative exposure to the market’s most concentrated positions. The presenters noted the MSCI All Country World Index’s top 10 holdings comprised more than 21% of that benchmark in 2024 while the plan’s top-10 exposure was roughly 16.7%.

The team described several substantive portfolio changes and the motivation behind them:
- Reduced direct onshore China (A-share) manager exposure and shifted to obtaining dynamic China exposure through global active managers and EM managers, rather than through dedicated onshore managers. The transcript records staff saying the reduction was deliberate and intended to give the plan more nimble, manager-driven exposure.
- Continued thematic tilts to technology/innovation and biotechnology, while recognizing those tilts create higher tracking error. The team said these thematic positions were being actively managed and that they trimmed technology exposure as valuations rose.
- Enlarged use of active-extension (long/short) and systematic strategies as a means to add stock-selection alpha while managing net market beta; staff said active-extension managers provide long and short exposure with a net beta near 1 but the capacity to generate stock-selection alpha and reduce portfolio drawdown risk.

Portfolio-construction framework and risk controls
The public equity group described a new portfolio-construction framework adopted over the past year. The framework decomposes tracking error to show how much of active risk derives from stock selection versus common-factor bets (country, sector, style). The team said the objective is to increase the fraction of tracking error that comes from security selection (idiosyncratic alpha) and to limit concentrated factor bets. Staff described internal tools developed with the risk team and external consultants (Mercer and Wilshire) to measure manager-level alpha quality, correlation of alphas, contribution to tail risk and the contribution of sectors/countries to total tracking error.

Liquidity and manager oversight
The team reported it raised about $1.9 billion in cash in 2024 (part of nearly $3 billion raised over two years) to fund other asset classes, beneficiary payments and tactical allocations. Staff said the portfolio remains conservatively liquid: at year-end, roughly $4 billion of public equities could be liquidated within a month and more than $7 billion within three months under ordinary market conditions. The team also summarized a robust manager oversight cadence: more than 100 manager meetings and manager monitoring activities over the past year, plus operational due diligence through Mercer.

Board questions and discussion
Commissioners asked about the effects of global macro and geopolitical tensions on region allocation, how the team treats emerging-market/country exposure as distinct from individual company selection, and whether currency and repatriation risks affect liquidity planning. Staff said most current regional and country-level exposures are driven by global managers’ active allocations and that the team now evaluates exposures more at the company level rather than by maintaining large direct country bets. They added that currency and repatriation have not been a barrier to meeting obligations and that managers typically factor currency into valuation decisions.

The public equity presentation was discussed; no formal vote was required on the discussion item. No members of the public called in on the item.","mediaType","Video","parentTitle","City of San Francisco - Video Open Video Only in Windows Media Player - May 14, 2025","oneSentenceSummary","The board’s public equity team reported that it outperformed global benchmarks in 2023 and 2024 with more-diversified positioning, raised nearly $2 billion in liquidity from equities in 2024, reduced direct China exposure and implemented a new portfolio-construction framework that emphasizes security selection and decomposes tracking error.","taxTitle","San Francisco City, San Francisco County, California","taxId",5751,"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},6560421,"Board hears Absolute Return annual update: portfolio outperformed benchmarks, improved risk metrics and provided liquidity during market volatility",727,2104000,2831000,"/Search/View?dp=1&key=3340621-af2e60ac5bd3cd7bdfbf709f5139b7b4&start=2104&end=2831","https://assets.pipeline.soar.com/3340621-af2e60ac5bd3cd7bdfbf709f5139b7b4/thumbnail_2104000.jpg","/articles/6560421/San-Francisco-City/San-Francisco-County/California/Board-hears-Absolute-Return-annual-update-portfolio-outperformed-benchmarks-improved-risk-metrics-and-provided-liquidity-during-market-volatility","https://secure.pipeline.soar.com/6560421-1727947708bec6594ecb72c423af8f10/orig.mp4?Expires=1775443486&Signature=MEMeR1NMcAYOEGAffP8kxp15eKL47A9JL1h-jb4ty63Kere1rzN~RMxm2avjtz363S25tubQHSAkWerzkasSnvMDKv0vIkZR73toNWSBLSvVTEUTsEuFqfLSz13U4LHXTMKmKxik0IerAWSSl9kBVtzTjz6xg0MHKZ~3Xnv5FFAVQfTEYyOevozoP1elkS5nWke7bpnID0v3d9d4UbjEzM9T~utjcieFlrhN582gR9O-ranjBxmMUQ0Fr1jpiFCOO675~aSBJG72SvsPowoK-eHe6swHAP0pxdZpra0qKQRou6ipEtVL5LPell7dtVsLxVVL56QNATiyfhzZmeslhQ__&Key-Pair-Id=KUT5TJCACFTXG","San Francisco Retirement Board investment staff and Blackstone presented a year-to-date and trailing performance update for the system's Absolute Return portfolio on May 14, 2025, reporting improved risk metrics, positive absolute returns during recent market volatility and meaningful liquidity provided to the plan.

David (investment staff) opened the presentation by defining the program and its role. He said the portfolio “continues to fulfill its role as a diversifier and risk mitigator as well as its role as a source of liquidity to the plan.” The board was shown that the Absolute Return allocation is near its 10% policy target and that strong recent performance has materially reduced the program’s measured volatility and betas to equities and bonds.

Blackstone portfolio managers described market conditions and opportunities. Jay Slager (Blackstone) said that the repositioning work with staff has lowered correlations and volatility, noting that “on a cumulative return basis, [absolute return] has outperformed global equities, the 60/40 and global bonds, with a very stable profile, very low volatility, and minimal drawdowns.” Slager highlighted pockets of opportunity in macro and structured credit driven by global central-bank divergence and continued dispersion between individual equities.

Performance and risk details presented to the board:
- One-year performance for the Absolute Return program was reported at about 10.3%, with the trailing 12 months and recent quarters meaningfully exceeding the program’s primary benchmark. Year-to-date performance through April (included in materials) was reported as roughly 3.8%, with the portfolio producing a positive 0.73% in April alone amid sharp intra-month equity moves.
- Staff presented quantitative analysis showing large contributions to program outperformance came from manager selection in the ‘diversifier’ and ‘return driver’ categories; those manager-selection decisions contributed over 800 basis points of alpha versus the program’s blended HFRI secondary benchmark over the most recent 12 months.
- Risk metrics have materially improved: five-year rolling annualized standard deviation was said to have fallen by about 45% over three years; beta to global equities and global fixed income declined substantially and are now within board-approved guideline ranges.
- Liquidity: the program provided a net $138 million of cash to the plan in 2024 and has provided roughly $1.2 billion over five years; staff presented monthly monitoring of weighted-average portfolio liquidity and noted the program is more liquid now than in prior years because of allocations to more liquid strategies and fewer illiquid investments.

Substrategy performance and positioning:
- Quantitative strategies were the top-performing substrategy year-to-date and consist of nearly 25% of the Absolute Return portfolio; staff said idiosyncratic risk (manager-specific alpha) accounted for more than half of the risk in quant and special-situations holdings.
- Credit- and macro-oriented strategies were shown to have contributed positively; staff emphasized niche structured credit and CLOs as areas of opportunity and cited the suitability of macro managers given central-bank divergence.
- Equity long/short and multi-strategy exposures were discussed, with staff and Blackstone citing an SMA (separately managed account) platform that gives daily transparency and tactical flexibility for manager exposures.

Staff and Blackstone emphasized process improvements: a disciplined portfolio-construction framework that groups investments into three categories (risk mitigators, diversifiers, return drivers); ongoing manager diligence and quantitative analysis, stress testing and third-party risk analytics; and continued work to improve monitoring, liquidity and capacity access.

The board asked questions on how Absolute Return’s repositioning affects the total plan, manager selection in equity and credit substrategies, and how geopolitical or macro scenarios are incorporated into monitoring. Staff and Blackstone described daily collaboration, scenario analysis, and monthly stress testing. Commissioners also asked about how the Absolute Return program’s lower beta gives staff freedom to allocate across other asset classes as part of the total plan strategy.

No public callers were recorded on the item. The board did not take a formal vote on this discussion item; the presentation was accepted for discussion and follow-up work continues on manager diligence and portfolio initiatives.","Staff and Blackstone presented an annual update on the board's Absolute Return portfolio. The presentation showed strong recent performance, improved risk metrics (lower volatility and betas), active manager selection contributing to outperformance, and that the program supplied liquidity to the plan during market dislocations.",{"_33":88,"_35":36,"_37":38,"_39":89,"_41":90,"_43":91,"_45":91,"_47":92,"_49":93,"_51":94,"_53":95,"_55":56,"_57":58,"_59":96,"_61":62,"_63":64,"_65":97,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},6560426,"Minutes, consent calendar and several board elections approved; SFDCP investment policy and stable-value guidelines adopted",0,23000,"/Search/View?dp=1&key=3340621-af2e60ac5bd3cd7bdfbf709f5139b7b4&start=23&end=23","https://assets.pipeline.soar.com/3340621-af2e60ac5bd3cd7bdfbf709f5139b7b4/thumbnail_23000.jpg","/articles/6560426/San-Francisco-City/San-Francisco-County/California/Minutes-consent-calendar-and-several-board-elections-approved-SFDCP-investment-policy-and-stable-value-guidelines-adopted","https://secure.pipeline.soar.com/6560426-39451e812dec34e98ed0d49462ca1fd0/orig.mp4?Expires=1775443486&Signature=lm13-ggULHVlOmfu~OxgYetHsWqP0tOkHjB7qKc9n8cxl5f2SidTTjUaJioLDc3HrpxoL9BWiEpKvjdVIQcJ~5t3Pe3QPRJmZxKDhAWb3Jq7btZcNp8NUEeJXCkget-XWd3zZ-QJ0F5DKSfhh3KVhgMYntrYahpQK962xjDiLjTGq30Dxf7ZruLqpIo8GB9BWv~AmWodhiJZCbw5AvOfUukFhxnwbOGdmCt9hbns87~JxnGc1hDrtEqaiMSL3UrZBdeX~2aRPB4gjK87qnQ-irrYvtMGs1~5U-~D9WZ2B-rdT1P8KwaHuo910BwSWkUOigHZfw8B6TrpCwlCfKmzxQ__&Key-Pair-Id=KUT5TJCACFTXG","The San Francisco Retirement Board took several routine and governance actions during its May 14, 2025 meeting, approving minutes, adopting the consent calendar, electing leadership and approving two Deferred Compensation Plan policy items.

The board voted to adopt the minutes from the March 12, 2025 retirement board meeting and the April 18, 2025 special retirement board meeting after a motion to “Move to adopt the minutes for both meetings.” The motion was seconded and the chair called the vote; the motion carried.

The board then approved the consent calendar as submitted; the motion was seconded and the chair called the vote. The consent calendar passed.

The board elected new leadership: Commissioners elected AJ (first name used in the transcript) to serve as board president effective at the June meeting date to be finalized by the board, and elected a vice president by motion, with both motions moved and seconded on the record and approved by voice vote.

Two Deferred Compensation Plan items were approved after committee review. The board approved revisions to the SFDCP investment policy statement (the IPS), which the Deferred Compensation Committee had forwarded with unanimous approval; the board chair called the vote and the motion passed. Separately, the board approved updated SFDCP stable-value guidelines, which the Deferred Compensation Committee had reviewed and forwarded; the motion to adopt those guidelines was moved, seconded and approved.

Where recorded on the transcript, each action was put to a voice vote and carried; the record shows no callers for public comment on these items and no recorded roll-call tallies in the public transcript. Specific vote tallies and mover/second names were not recorded in the public transcript for these motions and therefore are not stated here.","At its May 14, 2025 meeting the San Francisco Retirement Board approved meeting minutes, passed the consent calendar, elected a new board president and vice president for the retirement board, and adopted updates to the San Francisco Deferred Compensation Plan (SFDCP) investment policy statement and stable-value guidelines.","actionData","errors"]

Article not found

Public equity team reports outperformance in 2023–24, portfolio diversification and new construction framework

Board hears Absolute Return annual update: portfolio outperformed benchmarks, improved risk metrics and provided liquidity during market volatility

Minutes, consent calendar and several board elections approved; SFDCP investment policy and stable-value guidelines adopted