St. Mary’s County OPEB trustees approve Q4 investment report, adopt allocation change and approve JPMorgan proxy

County Administrator David Weiskopf convened the St. Mary’s County Government Retirement Benefit Trust Committee on Feb. 28, 2025, for a presentation from Marquette Associates and several votes on investment policy and rebalancing.

Marquette Associates’ Mr. Wing presented the fourth‑quarter 2024 investment performance report, describing the macro backdrop and how it affected the trust. Wing said economic activity “in Q4 did decelerate … coming in at about 2.3%,” and he warned that inflation measures and policy sequencing from Washington could shift short‑term rate expectations. He told trustees the trust ended the calendar year with a market value near $122.5 million and a quarterly decline of about 1.3%, slightly ahead of its policy index, which was down about 1.4%.

The presentation reviewed performance by asset class and manager. Wing noted U.S. equities posted a modest gain in Q4 while non‑U.S. and emerging markets lagged, and that most active equity managers underperformed because the market’s gains were concentrated in a handful of very large stocks. He said the fixed‑income sleeve outperformed modestly due to short‑duration exposure from one manager, and that infrastructure (IFM) produced a positive quarterly return. On private markets, Wing reported aggregate private commitments of roughly $22.6 million with about $2.25 million unfunded (he cautioned that unfunded figures may be overstated because managers typically do not call the full amount). Private equity returns since inception were reported around 16.7% and real estate around an 11.4% IRR; private debt long‑term returns were described as “just under 10%.”

Nut graf: The committee approved Marquette’s quarterly report and a set of policy and rebalancing recommendations intended to improve near‑term liquidity for the county’s OPEB reimbursements and to reflect the practical wind‑down of legacy private‑debt commitments.

Trustees voted to adopt two linked changes recommended by Marquette. First, they approved an amendment to the Investment Policy Statement that lowers the private debt target from 3% to 0% and moves that target weight into fixed income (the board adopted “option 2” in the packet). Marquette explained the recommendation reflects the OPEB trust’s mature private‑markets program and high near‑term liquidity needs: several legacy private‑debt and real‑estate funds had returned capital in recent months, leaving private debt at about 0.6% of the fund in practice and reducing the need for new commitments.

Second, the trustees approved a rebalancing plan that redeployed recent private‑market distributions and cash to increase fixed‑income allocations and to make partial redemptions from some equity managers. Marquette’s rebalancing steps cited in the packet included partial redemptions from U.S. equity positions and allocations into Reams and Lord Abbott fixed‑income managers to reduce the trust’s fixed‑income underweight. The consultant also recommended leaving the private‑markets allocation permissive in the IPS (so future commitments remain allowable) but setting the target at 0% for now.

Trustees also considered a shareholder proxy request from JPMorgan for its large‑cap growth fund. Marquette summarized the request as a vote to reclassify the JP Morgan fund from "diversified" to "non‑diversified" under the Investment Company Act of 1940 to allow the fund greater latitude to hold larger positions relative to the fund’s benchmark. Marquette told the committee the fund manager said the change would not materially alter how the fund is managed, and recommended the board approve the proxy. The committee voted to approve the proxy request (the motion passed with one recorded opposed).

The plan administrator, Joy Sapp, reported two capital calls since the last meeting—Accolade Partners Growth for $60,000 and Pennyback for approximately $109,160—and confirmed fiscal‑year‑to‑date reimbursements for health care totaling $2,000,472.45. She said the third‑quarter reimbursement for about $1.2 million would be paid in March and the OPEB committee’s next meeting is scheduled for April 25, 2025.

Votes at a glance - Approval — Fourth‑quarter investment performance report as presented: motion carried. (Motion made; recorded as passed.) - Approval — JPMorgan large‑cap growth proxy (reclassify fund under the Investment Company Act of 1940): motion passed with 1 opposed. - Approval — Investment Policy Statement amendment (private debt target reduced to 0%; fixed income increased per packet Option 2): motion carried. - Approval — Rebalancing recommendations and implementation (partial redemptions and new fixed‑income purchases): motion carried.

Ending: Trustees directed Marquette to bring a deeper U.S. equity review to the April meeting and to finalize IPS signature pages for the amended policy; Marquette said the firm will present more detail on manager exposures in April.