Trustees of the Town of Indian River Shores pension plan approved submitting redemption requests totaling $750,000 from two private real‑estate managers after an extended discussion weighing liquidity, fees and long‑term performance differences between private funds and publicly traded REITs.

Mariner Institutional’s investment consultant, Brad Hest, opened the quarterly report and reviewed market drivers and the plan’s fiscal results, telling trustees the quarter to June 30 produced strong returns led by U.S. equities and that fixed‑income returns were helped by a fall in interest rates. Hest said the plan’s market value rose from about $19.9 million to about $21.2 million over the period, that the plan remained overweight domestic equity relative to its IPS target, and that private real estate had generated modest recent returns (about 1% per quarter) driven largely by income rather than capital appreciation.

The core of the meeting was a long debate among trustees and staff about whether to keep private‑market real‑estate exposure, move to public REITs, or reallocate to other asset classes. Points raised by trustees and staff included:

- Private funds typically report lower quarter‑to‑quarter volatility but can be illiquid and are priced using appraisal models (so valuations can lag market moves). Trustees and one presenter warned that appraisal‑based valuations can overstate performance during stressed markets because transactions are thin.
- Public REITs offer lower fees and daily liquidity but can behave like a sector‑level equity exposure and therefore move closely with the stock market; REIT returns have outperformed private funds in some multi‑year stretches but have been more volatile.
- Private funds charge materially higher fees (in discussion, trustees contrasted roughly 110 basis points for private funds vs. ~13 basis points for REIT index products) and sometimes include incentive fees; private funds’ yield at recent statements was reported at roughly 3.5–3.9% for the funds in the plan.

The plan administrator reported that as of Sept. 30 the plan held about $1,556,000 across the two private real‑estate funds (approximately $817,000 in InterContinental and $739,000 in Principal). After discussion, a trustee moved to request redemptions of $400,000 from Principal and $350,000 from InterContinental (together $750,000). Another trustee seconded the motion, and the board approved submitting the redemption requests; staff said they would report subsequent redemption receipts and redeployment proposals at future meetings. Trustees discussed temporarily parking any returned cash in a money market vehicle until the board decides whether to redeploy to REITs, US equities, short‑term Treasuries or another option.

Trustees also asked the consultant for more analysis on a potential new asset class, “global bonds,” which staff proposed funding by reducing the real‑estate target. Hest said he would prepare a correlation and return analysis showing how global bond sleeves would affect total‑fund risk and return and present it at the next quarterly meeting.

Separately, Brad Hest advised the board of a proposed minor investment policy statement (IPS) wording change to ensure compliance with a Florida statute passed in July; the board’s attorney later discussed the statute in more detail during the legal update.

Action items recorded: staff will submit redemption requests to Principal and InterContinental; the consultant will produce an asset‑allocation analysis for any proposed global bond sleeve; staff will report redemptions realized and present redeployment options once cash is available.

Supporting quotes from the meeting included the consultant’s summary of market results and the administrator’s reporting of the private‑market balances; trustees’ statements were recorded on procedural motions and the vote to submit redemption requests.