St. Mary's County's Sheriff's Office Retirement Plan (SORP) board heard an investment presentation July 24 recommending a greater allocation to infrastructure investments over private real estate and approved a rebalancing move intended to reduce an overweight in cash and hold funding for upcoming private credit calls.

The investment consultant presenting the portfolio update said infrastructure — broadly defined to include transportation, energy and utilities, and communications assets — can provide steadier, inflation-resistant cash flows than some real estate sectors and may better match the plan's need for downside protection and lower volatility. "We want the underlying assets. We don't want dollar movements, good or bad, to really impact our return," the presenter said when explaining why some managers hedge currency exposure.

The recommendation reflects recent private-market performance and the fund's current allocations. The presenter told the board the plan's total assets were about $171 million as of the prior Thursday and that the plan has an existing $5 million commitment to IFM's infrastructure fund. He said private real estate has lagged recent broader market returns while infrastructure shows stronger supply-demand fundamentals and historically higher risk‑adjusted returns.

Why it matters: infrastructure assets typically provide essential services with relatively stable demand and long-term contracts or regulatory pricing mechanisms, the presenter said, which can make cash flows more predictable and provide some protection in inflationary periods. He contrasted that with segments of real estate—retail and office—that have seen structural demand shifts and elevated supply, which have weighed on returns.

Key presentation points
- Infrastructure sectors and cash-flow profiles: The consultant outlined three infrastructure categories — throughput (toll roads, airports), regulated (utilities, water), and contracted (satellite and tower leases) — and said throughput assets are typically more sensitive to changes in usage while regulated and contracted assets offer more predictable, contract-backed cash flows.
- Manager comparison: The presentation reviewed IFM (where the plan already has exposure), JPMorgan, and Brookfield as potential managers. JPMorgan and Brookfield were described as having historically steadier returns and less exposure to GDP-sensitive throughput assets than IFM; IFM has had higher returns in some periods but with somewhat greater volatility.
- Risks: The presenter flagged currency movements, liquidity, valuation methodology for non‑exchange-traded assets, public perception/regulatory risk and isolated operational risks (for example, natural disasters and obsolescence) as considerations when adding infrastructure exposure.
- Implementation and timing: No policy change was proposed. The consultant recommended adding to infrastructure within the existing "real assets" policy bucket rather than increasing private real estate holdings. The board was told staff will return with more-detailed manager analysis in September after the regular quarterly report in August.

Board action and next steps
The board approved a rebalancing recommendation to bring certain allocations back within policy ranges and to hold funds in lower‑risk fixed income until private credit funding calls occur. Specifically, the consultant recommended drawing funds from cash holdings (including a smaller outside-principal cash holding and a government money-market fund) and moving about $1.25 million into the Core Plus Bond Fund to reduce an overweighted cash position and preserve liquidity for upcoming private credit funding. The board adopted that rebalancing recommendation by voice vote.

Other routine actions
- The board approved the meeting agenda and the minutes of the June 26 meeting by voice votes.
- The plan administrator reported administrative disbursements: a $300 payment to the plan actuary (Boomersheim) for benefit calculations, payments to Marquette Associates for first-quarter consulting, and an $877.50 administrative consulting payment, with total administrative disbursements reported as $33,008.44. The quarterly custody fee of $10,960.83 was noted as automatically deducted. The board approved the plan administrator's report by voice vote.

Quotes
- "We want the underlying assets. We don't want dollar movements, good or bad, to really impact our return," the investment consultant said, describing why some managers hedge currency exposure for U.S. investors.

What to watch next
Staff and the investment consultant will bring a manager-search comparison (JPMorgan vs. Brookfield to complement IFM) and more-detailed rebalancing analysis at a later meeting, with a fuller discussion planned for September after the board receives second-quarter reporting in August.

Votes at a glance
- Motion to approve today's agenda — Passed (voice vote).
- Motion to approve minutes of June 26 — Passed (voice vote).
- Motion to approve the rebalancing recommendation as presented (move funds from excess cash and a government money-market fund into Core Plus Bond Fund to hold for private credit funding) — Passed (voice vote).
- Motion to approve the plan administrator's report (administrative disbursements and custody fee) — Passed (voice vote).