St. Mary's County LOSAP board hears Q1 investment update; approves small rebalancing

The St. Mary's County Length of Service Awards Program (LOSAP) board heard a presentation on April 25 from Marquette Associates on first-quarter investment performance and approved a modest rebalancing recommended by the consultant.

Marquette Associates reported the LOSAP trust began the year with about $18,310,000 in assets and showed a Q1 net investment gain that produced a 1.2% quarterly return, slightly ahead of the policy index return of 1.1%. The consultant recommended marginal rebalancing into U.S. equities; the board approved that recommendation by voice vote.

The presentation, delivered by a Marquette Associates representative, emphasized diversification as the primary driver of the quarter’s positive return. “What we saw in Q1, despite a lot of volatility and weakness in U.S. equity markets, it was pretty much the polar opposite of Q4,” the Marquette Associates representative said, summarizing the quarter. The consultant pointed to gains in developed non‑U.S. equities, infrastructure and investment‑grade fixed income as offsetting weakness in U.S. stocks.

The consultant’s slide materials showed several quarter‑level figures discussed during the meeting: a beginning balance of approximately $18,310,000; a reported net investment change of about 218,000 (USD); a Q1 total fund return of 1.2% versus the policy index at 1.1%; U.S. equities down roughly 4.9% for the quarter; developed non‑U.S. equities up about 8%; emerging markets up roughly 4%; and a real‑assets composite up about 5% (figures presented by the consultant). The consultant also said the peer median for similarly‑sized defined‑benefit public plans had an early look return near negative 0.6% for the quarter.

Board members discussed longer‑term positioning as well as the board’s current allocation relative to peers. Marquette noted the LOSAP policy target’s U.S/non‑U.S split is closer to 3:2 versus peers that the consultant showed averaging near 4:1 U.S to non‑U.S. The consultant illustrated how returns are built from earnings growth, valuation changes and income and cautioned that past U.S. valuation expansion is unlikely to repeat indefinitely.

Marquette also presented options (not formal recommendations for immediate action) for modest restructuring to access private markets typically available to larger, qualified plans: swapping publicly traded REIT exposure for core private real estate and replacing a public high‑yield allocation with private debt. The consultant explained expected tradeoffs: potential incremental return and lower volatility from private debt versus more liquid high‑yield ETFs, and lower day‑to‑day volatility plus diversification benefits from private core real estate versus REITs. The consultant stressed these were possibilities for future discussion and clarified that some managers would consider LOSAP alongside the county’s other pooled plans when assessing qualification thresholds.

After the presentation and discussion, Catherine Pritson, director of human resources and LOSAP board member, moved to approve the rebalancing recommendations as presented on page 36 of the report. David Weiskopf, county administrator and board chair, gave the second. The board approved the motion by voice vote; the minutes record the motion carried.

Administratively, LOSAP plan administrator Joy Sapp reported paying $4,829.31 for two quarterly payments to Principal and Marquette and said the plan’s last annual contribution for the fiscal year will be made by June 2025. The board’s next meeting was scheduled for June 27, 2025.

The board did not adopt new policy changes at the meeting; the rebalancing approved was the consultant’s recommended trade to slightly reduce overweight positions in infrastructure and investment‑grade holdings and increase U.S. equity exposure. Marquette framed the change as a marginal rebalancing rather than a material policy shift and said a fuller asset‑allocation review could be scheduled for the June meeting if the board wished to explore private debt and core real‑estate options further.

Votes at a glance: Catherine Pritson moved to approve the rebalancing recommendations as presented on page 36; the motion was seconded and approved by voice vote. The official minutes do not record a roll‑call tally.