Notes from the Investment Committee meeting on Aug. 25-26, 2020.
The OP&F portfolio was valued at $15.65 billion as of 8/25.
New asset class approved as first step in asset allocation review
OP&F general investment consultant, Wilshire Associates, began an asset allocation review and presentation to the Board during the Aug. 26 meeting. The comprehensive review has not concluded, but the Board did approve one change to the portfolio, adding a 5.0 percent allocation to gold.
The approval allowed OP&F investment staff and Wilshire to explore how to best implement the strategy. No new manager will be hired and there is no timeline for implementation at this time. To allow for the additional 5.0 percent allocation, the Board also approved increasing the current leverage amount on the total portfolio from 20 percent to 25 percent.
OP&F and Wilshire believe that the addition of gold will give the portfolio a strong diversifier to its growth oriented investments as well as provide an effective hedge against inflation.
2nd quarter returns show strong bounce-back
Wilshire’s presentation on second quarter investment performance showed a 9.21 percent return through June 30, 2020. The year-to-date return remains negative -5.5 percent.
OP&F approves rebalancing of open-end real estate portfolio
The Townsend Group presented a rebalancing recommendation for OP&F’s real estate portfolio, specifically open-end funds. Townsend is OP&F’s real estate investment consultant.
As part of OP&F’s normal open-end fund rebalancing process, the following actions were approved: A full redemption request from Jamestown Premier Property Fund (OP&F’s current investment is valued at $86.4 million), a partial redemption request of $50 million from Heitman Core Property Fund, a partial redemption request of $50 million from JP Morgan Strategic Property Fund, and turning on the dividend reinvestment plan for Lion Industrial Trust.