Jacksonville Beach pension board orders $910,000 rebalance, sells Wells Capital stake to return equities to 65%

The Jacksonville Beach pension board voted to sell a portion of its equity holdings and move proceeds to cash after advisers reported that total equity exposure had climbed above the 65% cap set in the city ordinance.

At a meeting reviewing the June 30 quarterly report, the board’s investment presenter told trustees the fund had delivered very strong returns — “the S and P 500 was up 8 and a half percent” in the quarter and the plan’s year-to-date return was about 19.2% — which pushed the portfolio’s equity allocation to about 65.75% as of that morning’s update. The presenter said a minimum sale of roughly $910,000 would return the fund below the 65% maximum; returning fully to target would require significantly larger moves (about $5.2 million domestic and $1.75 million international, he said).

Trustees discussed options including letting the market fall back below the threshold, scheduling a contingent rebalance tied to an end-of-quarter rerun of allocations, or recommending an ordinance change to raise the maximum equity cap to 70% and asking council to consider that change. The presenter cautioned that any ordinance revision would require council action and a volatility analysis before the board’s recommendation would go forward.

During debate over where to source the cash, one trustee proposed harvesting from the top performer, Wells Capital, and another made a formal motion “to sell from Wells Capital” to bring the equity exposure back to the 65% ceiling and place proceeds in the fund’s cash account. The motion was seconded and carried on a roll-call; trustees present answered “Yes” when polled and the chair declared the motion approved.

The board also asked staff and the consultant to return with two allocation scenarios at the next meeting: one that would implement the modest rebalance now (the $910,000) and another that would illustrate paths for larger reallocation or alternative asset commitments (for example, private real estate or private debt). The presenter noted limitations and trade-offs for alternatives, including capital-call mechanics and liquidity constraints: private vehicles often require multi-year commitments and do not provide daily access to capital.

The board approved the June 30 quarterly investment performance report later in the meeting and directed staff to prepare the volatility analysis and the allocation scenarios for follow-up discussion. The meeting adjourned after routine administrative reports.

The motion to sell from Wells Capital and move proceeds to cash is a formal board action to restore compliance with the current ordinance; any change to the ordinance’s equity cap would require a separate recommendation to, and action by, city council.