Board of Trustees hears investment update; portfolio about $68.5 million, asset-allocation study planned

At a Feb. 26 Board of Trustees meeting, investment presenter Tim Burdick gave a market and portfolio review showing the trust’s portfolio at about $68.5 million as of January and recommending an asset-allocation study before the July 1 inflow.

Burdick told trustees the presentation covered recent market performance, results for the portfolio since the manager was engaged in April, and a brief profile of the fixed-income manager Baird Advisors. "I tried to make it as recent as possible, so it's through the January," he said, noting the portfolio earned roughly $5.4 million in realized and unrealized gains since inception, about an 8.8% return in the nine months reported.

The update placed U.S. equity strength in 2024 in context — "the S and P up 25" — and warned of market concentration and heightened volatility. Burdick described an inverted yield curve and a Federal Reserve policy rate he summarized as "4 and a quarter," saying those dynamics shape expectations for growth, inflation and interest rates. "The market is reacting to what's transpiring," he said.

On the trust portfolio, Burdick said allocations currently include an approximate 5% target to institutional real estate and a private equity/private debt target of 10% (about 7.5% actual). He reported one private-debt manager, Gallup Capital, had called only half of the committed capital, leaving that sleeve at roughly 2.4% of the portfolio versus a 5% policy target; the team is temporarily using a Baird investment-grade bond fund as a proxy until Gallup calls additional capital.

Baird Advisors was presented as the trust’s investment-grade bond manager. Burdick said the board’s bond allocation is in the Baird Intermediate Bond Fund with a duration of about 3.7 years. "If interest rates go up by 1%, you lose 3.7%. If interest rates go down by 1%, you make 3.7%," he said, explaining the fund’s intermediate stance reduces interest-rate risk versus an aggregate index.

Trustees questioned risk in higher-yield sleeves. Burdick characterized the Schenkman multi-asset sleeve as roughly 10% of the portfolio and said about half of that sleeve is below investment grade (bank loans and high-yield) plus a less liquid private allocation. "Spreads are tight," he said of high-yield, adding the sleeve is "yielding 8%" but may be "more risk than return there." He said the asset-allocation review will consider trimming those exposures and putting additional money to work in illiquid, higher-return opportunities "without taking on more risk."

Burdick also described stock-market breadth in early 2025 and the concentration of returns among large-cap technology names. He recommended the board continue systematic rebalancing and said his team will present an asset-allocation study for the board’s next major meeting so the trustees can decide how to deploy roughly $10.5 million expected July 1 into the portfolio.

The board thanked Burdick for the report and scheduled the asset-allocation study for the next meeting cycle.

Ending: Burdick said he will bring an asset-allocation study to the board before the July inflow and that the trust team will review whether to reduce liquid exposure to capture an illiquidity premium over time.