Danvers Retirement Board hears investment report; consultant recommends $1 million drawdown

Rafik Ghazarian, investment manager with Segal Marco, told the Danvers Retirement Board on April 29 that March portfolio performance was poor and recommended a $1,000,000 drawdown from PRIT Core Fixed Income to cover near-term cash needs. Ghazarian said March losses of $8.1 million erased January–February gains and left the quarter-to-date position down $2.9 million.

Ghazarian provided specific market context: Emerging Markets were down about -13.1% while the U.S. S&P 500 fell roughly -5.0%. He attributed Emerging Markets’ weakness in part to the effects of the war and higher commodity and oil prices. Ghazarian cautioned that short-term volatility can be large but noted the plan’s longer-term returns: "In the last 10 years it has averaged 8%," and he reminded the board of the 7% IRR target for actuarial planning. He also asked rhetorically whether the fund "could be facing a dismal year?" and said there is "some flexibility in any given year that the board could drop as low as -12% and a high of 24%."

Ghazarian told the board he recommended only the cash drawdown and no reallocation at this time, noting the PRIT Core Fixed Income allocation target is 8.0% while the account currently stands at about 8.6%. The board heard the recommendation, discussed longer-term assumptions, and did not record any immediate allocation changes during the meeting.