Investment consultant: Oklahoma City retirement fund totals $923.6 million; 10-year net return below 7.5% target

Patty, the board’s investment consultant, presented a November market update and the plan’s monthly performance at the Oklahoma City Employee Retirement System meeting on Dec. 12, 2024. "We have a fairly short report today, just a overview of the market and update on the November performance of the overall portfolio," Patty said.

Patty told trustees the portfolio was valued at $923,600,000 as of November and that the total portfolio was up 10.1% year to date and 14.8% over one year. "On a year to date basis, the total portfolio is up 10.1%, 1 year up 14.8% and then over 5 and 10 years, 7 and a half and 7.1%," she said, and added that private equity returns lagged public equities because private positions are not marked monthly.

Patty reviewed asset-allocation targets: about 60% for global equities, 25% to fixed income and 15% to real assets, and noted the plan’s private equity allocation was roughly 10%, short of a 15% target. She also described an upcoming manager change in the fixed-income sleeve, saying the WAMCO and Brandywine portfolios are expected to be liquidated next month to fund a new Pioneer multi-sector strategy, with an anticipated funding date of Feb. 1.

During questions, an unidentified board member asked whether the actuary measures returns net of fees. Patty confirmed: "It's the net of fees." The board member then summarized the implication: "So in that case, we're not meeting the 7 and a half percent." Patty replied, "My apologies. You're correct." That exchange clarified the plan’s long-term performance on a net-of-fees basis: the 10-year net return reported was 6.6%, short of the 7.5% actuarial target.

After the presentation and Q&A, a motion to receive the monthly investment report was made and seconded; the board recorded a vote and approved the motion to receive the report.