“Due Diligence”
An investigation,
audit, or review is performed to confirm facts or details of a matter under
consideration. In the financial world, due diligence requires an examination of
financial records before entering into a proposed transaction with another party.
Due diligence is a systematic way to
analyze and mitigate risk from a business or investment decision. (Investopedia)
April 5, 2024, First Friday Managers and Investment Due
Diligence Meeting (Agenda)
The meeting started after 9:30 am.
1. 1. Participation, Michael
Angulo, Jonathan Perez, and Filez Venegas with United HERE Local 1, returned to
provide an update on their dispute with Hotel Figueroa in Los Angeles. He
stated that their fight for justice continues, and he is back to ask again for
a letter from the Board of Trustees of Chicago Teachers’ Pension Fund to BGO (Greenoaks
Trade name). They ask that the Trustee join U.S. Senator Bernie Sanders and
other labor advocates, to end the labor dispute at the hotel and justice for
the 100 fired workers. CTPF is invested with Green Oak Real Estate Three, “ IRR
of 0.17% underperforming the benchmark of peer funds by 10.15%,” ( 3.05 minutes
into the video), Michael Angulo stated.
2. Roll Call
Representing Active
Members: Paula S. Barajas, Jeffery Blackwell, Victor Ochoa,
Jacquelyn Price Ward, Tammie F. Vinson, Quentin S. Washington (
All in attendance)
Representing Retired
Members: Lois Nelson(Present), Maria J. Rodriguez (Not in attendance)
Mary Sharon Reilly (Attended virtually)
Representing Principal: Vacant,
No representation
Representing the Board of
Education: Tanya D. Woods (Attended remotely), 2nd Member
Vacant, No representation.
3. Approve
Remote trustee Attendance and full Participation. Vote Yes, Unanimous
4. 3. Approval
of The
minutes of the December 1, 2023 Investment Committee First Friday. 9 yes 0
No
Approval of The
minutes February 2, 2024 Investment Committee First Friday 9 yes 0 No
5. 4. First
Friday Presentations, (This committee grew out of the need
of smaller managers and MWDBE managers who are not part of the big consultants'
pipeline to get an opportunity to share new ideas and investment opportunities
with the Chicago Teachers' Pension Fund (CTPF).)
The fund's Chief Investment Officer,
Fernando Vinzons, joined the meeting remotely and greeted the trustees. He
mentioned that four Chicago-based firms were invited to present before them.
Three of these firms were already managing assets for CTPF under several asset
classes, and three of them were in the market with their latest fund offering.
Mr. Vinzons said they were interested in hearing what opportunities these firms
saw. He also stated that the managers presenting today were diverse in asset
class and ownership. The purpose of inviting Attucks was to have them provide
an update on the firm, review the portfolio, and shed any insight on what
management plans they have given recent personnel turnover. The meeting was
then handed over to Mr. Binsfeld (investment staff), who introduced the
trustees and managers before hearing their presentations.
The first presentation, Attucks
Asset Management.
$4.2 Billion in Assets Under
Management (AUM), diversified 56% in Equity and 44% in Fixed Income.
Attucks currently manages
$742 million in our customized “Multi-asset strategies” portfolios. Since its inception,
on December 1, 2013, the Attucks “Best-in-Class” Portfolio has exceeded its
benchmark by 25 bps or .25% gross of fees, on an annualized basis for over 10 years as
of February 29, 2024. While recent markets disconnected from fundamentals,
narrow leadership, and narrative-driven markets the past couple of years have
depressed longer-term returns to be behind the benchmark net of fees by 0.39%
since inception, the portfolio is quickly making up the ground as fundamentals
come back into focus and the market breadth continues to expand.
On the January 31, 2024, Board
of Trustees’ Investment Summary Report, no information on Attucks was found.
Provided is the information ending November 30, 2023.
The trustee asked the Attacks team many questions about affordable housing during the meeting, around the 54:57-minute mark.
After a brief intermission, the trustee returned to the meeting. Mr. Vinzons introduced JLC as an infrastructure entity owned by Loop Capital and Magic Johnson Enterprises and he said,” CTPF is invested in their Maiden fund, JLC fund 1 and are actively fundraising for fund 2”.
Second presentation MJE-Loop Capital Partners LLC
Founded in 2015, JLC
Infrastructure is an independent investment manager based in Chicago targeting
investment opportunities in the transportation, energy, communications and
social infrastructure sectors in the United States. As of 12/31/23, the firm has
~$1.6Bn in AUM, with over $450MM raised thus far for Fund 2 (towards a targeted
fund size of $750MM). Fund 1 gross and net performance has exceeded Fund 1
targeted returns of 12-15% Gross and 10-12% Net. JLC Infrastructure is a 100%
minority-controlled firm.
Third presentation Muller
& Monroe are not currently managing money for CTPF. However, CTPF was
one of their three original clients in 2004.
Muller & Monroe Asset Management
(“M2”) is a Chicago-based minority-owned private equity fund-of-funds manager
with $1.4B in assets under management. M2 targets private equity funds
investing in the lower middle market, including diverse and emerging managers. They
invest in buyouts, growth equity, and special situation funds. Through
commingled funds and separate accounts, they manage money for an august group
of sophisticated investors. They currently manage 11 pools of capital 9 of 11
outperforming the Russell 3000, 1 investment is too early to evaluate and 1 is
underperforming. 7 of the pools of investment exceed the benchmark by 6.50% and 3 pools of investment exceed the benchmark
by 10%.
Fourth presentation Newport
Capital Partners
Newport's investment strategy invests
in neighborhood retail centers, located in densely populated submarkets, targeting
necessity-based, non-cyclical tenants. Focus on Middle Market investments
($5-$20 million equity in primary/secondary markets allows LPs to benefit from
pricing inefficiencies. The Firm’s extensive experience as an investor operator
drives its mission to proactively manage tenancy and increase property net
operating income (“NOI”). Their passion is revitalizing neighborhood centers
with tenants that serve community needs while generating attractive racist-adjusted
returns for its investors.
