Board of Trustees African American 20% 1 of 5 Non-Minority Woman 20% 1 of 5

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1 Municipal Employees Annuity and Benefit Fund of Chicago A Pension Trust Fund of the City of Chicago 321 North Clark Street, Suite 700, Chicago, Illinois Telephone: Fax: Jim Mohler, Executive Director Retirement Board Timothy G. Guest President (Elective Member) Erin Keane Vice President (City Comptroller, Ex-Officio Member) Kurt A. Summers Jr. Treasurer (City Treasurer, Ex-Officio Member) Jeffrey J. Johnson Recording Secretary (Elective Member) Thomas J. McMahon Trustee (Elective Member) October 6, 2017 Senator Kwame Raoul, Chairman, Senate Committee on Pensions and Investments Office of the Senate President 160 N. LaSalle Street Bilandic Building Ste. 720 Chicago, IL Attn: Ozie Goodwin Re: Minority and Female Investment Hearing Questionnaire Dear Senator Raoul, On behalf of the Retirement Board of Municipal Employees Annuity and Benefit Fund of Chicago (MEABF), I am pleased to provide replies to questions contained in your letter. I. Board of Trustees and Fund Policy 1. What is the percentage of minority and women representation on the Board of Trustees of your fund ( the Fund )? Please identify the minority and women members of the Board of Trustees by name, specifying which members are African American, Asian American, and Latino. Board of Trustees African American 20% 1 of 5 Non-Minority Woman 20% 1 of 5 Proxy Trustees African American 50% 1 of 2 Non-Minority Woman 50% 1 of 2 2. Has the Board of Trustees implemented a policy encouraging the hiring of minority or women money managers by the Fund across all asset classes? If so, when was the policy promulgated? How has this policy been implemented? Describe any changes made to the policy and its execution in the last year to improve minority and female-owned business enterprise participation. Are there any asset classes that do not have minority and women representation? Please provide a copy of the policy. Yes, the Fund has implemented a procurement policy to require a competitive process similar to that which is required by the Illinois Procurement Code for professional and artistic services. A copy of Appendix E of the policy is enclosed (Attachment A). 3. Has the Board of Trustees implemented a policy encouraging the hiring of minority- and female-owned broker/dealers by the Fund s asset managers? If so, when was the policy promulgated? How has this policy been implemented? Does your policy include all asset managers who trade publicly traded assets (e.g. REITs, hedge funds, etc)? Does your policy preclude the utilization of non-direct trading methods Page 1

2 toward meeting your goals? Describe any changes made to the policy and its execution in the last year to improve minority and female-owned business enterprise participation. Please provide a copy of the policy. Yes, the MWDBE broker/dealer utilization goals within the Fund s Investment Policy Statement were implemented by resolution dated December 19, Revisions have been made since then, but no changes were made last year. All managers receive a copy of the Fund s Investment Policy Statement and are notified as changes occur. The Retirement Board reviews its manager s brokerage activity on a quarterly basis. Any managers who fail to meet the Board s brokerage goals, as stated in our Investment Policy Statement, in a given calendar year shall report to the Retirement Board and explain its reasons for non-compliance. Insufficient responses and/or continued underperformance by a manager can lead to a meeting with the Retirement Board, a reduction in assets, or termination of manager. The Retirement Board encourages all the external managers to engage with these broker/dealers defined by Article 1 of the Illinois Pension Code. In addition, the Retirement Board was able to reach an agreement with two of the recently hired managers to utilize MWDBE broker/dealers within their commingled funds vehicle, which MEABF is invested in. A copy of Appendix E of the policy is enclosed (Attachment A). 4. What steps is the Fund taking to encourage direct trading with minority and female-owned broker/dealers across all relevant asset classes instead of step-outs and correspondent relationships? The Fund s Investment Policy Statement s MWDBE Broker/Dealer Utilization Policy prohibits managers from utilizing indirect methods, such as step-out commissions, to achieve MWDBE Broker/Dealer utilization goals. 5. Public Act 96-6 required funds to adopt goals across all asset classes. How has the Fund s goals changed since passage of the new law? How else has PA 96-6 impacted the Fund s use of emerging investment managers? How do you promote transparency within the Board? Are your full Board meetings and Investment Committee meetings entirely open to the public? Has the Board gone into Executive Session regarding non-legal matters in the past? If so, for what general reasons did the Board decide to hold an Executive Session instead of a public hearing? Do you (or have you) given consideration to providing the same written materials to the public so they can follow and understand the proceedings better? (as general referencing discloses little in the greater interest of transparency) Public Act 96-6 requires the Fund to formalize its procurement process for investment services to set quantifiable goals for the utilization of emerging investment managers. Through the Act, the Fund provides transparency through the Fund s website ( as it relates to any publicly available Fund s activities. The Fund s website provides such information as schedule, agenda, and approved minutes of each Board meetings. Fund s Investment Policy Statement, Financial Statements, Comprehensive Annual Financial Reports, and Actuarial Reports are also available to public. The Board can decide to conduct an executive session for reasons that are allowed within the Open Meetings Act. Public materials are distributed to the public upon request through Freedom of Information Act. The Board meetings are open to public, with exception of any executive sessions. Monthly, quarterly, and annual investment updates are given and available for public viewing through a projector screen during the presentation to the Board. 6. Is there a maximum allocation your plan is allowed to allocate to trade with an MWBE firm? IF so, what is the maximum? Is there a maximum volume or percent your plan is allowed to trade with a MWBE firm for each asset class? If so, what is the maximum? Is your policy a ceiling or floor? Why? The Fund does not incorporate maximum allocation goals for managers to trade with the MWDBE broker/dealer firms, rather the Fund has set a minimum allocation goals. Page 2

3 II. Staff 1. What is the percentage of minority and women representation on the Fund s investment staff (excluding support staff)? Please specify the percentage of African Americans, Asian Americans, Latinos, and women. Fund s Investment Staff Asian American 50% 1 of 2 2. What is the percentage of minority and women representation on the Fund s consulting staff that is specifically assigned to the Fund (excluding support staff)? Please specify the percentage of African Americans, Asian Americans, Latinos, and women. Investment Consultant Marquette Associates MEABF Total 8 Employees African American 12.5% 1 of 8 Asian American 12.5% 1 of 8 Latino 12.5% 1 of 8 III. Consulting Firms 1. What is the percentage of minority and women representation at the Fund s hired consulting firm (excluding support staff)? Please specify the percentage of African Americans, Asian Americans, Latinos, and women. Investment Consultant Marquette Associates Total 85 Employees African American 2.7% Asian American 8.1% Latino 9.5% Non-Minority Women 16.2% 2. What standards do you and your consultants use to confirm and certify that an investment manager or broker is MWBE? Investment managers who claim MWDBE status must present a verification letter from the respective state/local agency where the firm resides to the consultant to be qualified as MWDBE firm. 3. How many MWBE firms did your consultant recommend in searches which occurred in 2016 and 2017 (through March 31)? How many MWBE firms did your consultant recommend in searches without a specific MWBE participation mandate? How many MWBE firms are currently on your consultant s recommended or select lists? During 2016 and through 3/31/2017, the Retirement Board has approved two RFPs; International Small Cap Search and Defensive Equity Search. Between the two searches, three MWDBE firms submitted proposals for consideration (Ativo, Globeflex, and FIS Group). In total, Marquette Associates conducted 285 investment manager searches for their clients in Out of all the searches Marquette conducted in 2016 without specific MWDBE mandates, 20% of the MWDBE firms were recommended for consideration. Marquette Associates does not maintain a pre-approved list of managers, but they monitor over 260 minority and woman owned firms, featuring 815 products across their proprietary database, evestment, Preqin, and Morningstar. Marquette subjects minority and women owned firms to the same thorough screening process that is used for traditional manager searches. As of December 31, 2016, Marquette Associates clients have collectively invested nearly $7.1 billion with minority and owned firms (31 firms and 68 products). Page 3

4 IV. Money Managers 1. What is the percentage of minority and women representation at the Fund s majority owned asset managers who are specifically assigned to the Fund s accounts (excluding support staff)? Please specify the percentage of African Americans, Asian Americans, Latinos, and women. Please see Table 1 Diversity Table Results 2. As of December 31, 2016 and March 31, 2017 what percentage (based on assets managed within each asset class) of money managers retained by the Fund is African American? Latino? Asian American? Female? Please identify these entities by name. Please see Table 2 - Asset Allocation - MWDBE Managers 3. Exclusive of a manager of managers program, as of December 31, 2016 and March 31, 2017, what percentage of money managers retained by the Fund is African American? Latino? Asian American? Female? Please identify these entities by name. Please see Table 3 - Asset Allocation - MWDBE Managers (Non-Manager of Managers) 4. Are any of your managers of manager s minority- or female-owned firms? (If so, please name the firm and the amount of assets being managed. If not, and you have hired a manager of managers, please name the firm and the amount of assets being managed.) Manager of Managers (as of 3/31/2017) FIS Group African-American/Woman $134,570, If you have hired a manager of managers, what fees are paid to your manager of managers? What amount of the manager of managers fees are paid to the underlying managers? Please be specific and request this from your manager of managers Q 2017 Total Fee $1,146, $232, Sub-Managers Total Fee $501, $102, FIS Group % of Total Fee: 56.2% 55.8% Sub-Managers % of Total Fee: 43.8% 44.2% V. Illinois-headquartered Managers 1. What percent of assets by asset class were allocated to Illinois-headquartered minority- and femaleowned investment managers in 2016 and 2017 (March 31)? What is the total dollar amount of those assets allocated to Illinois-headquartered minority- and female-owned investment managers relative to each asset class? Please see Table 4 - Illinois Based MWDBE Managers Exposure. 2. What is the percentage of the total dollar amount of investment management fees that is paid by the Fund to Illinois-headquartered minority- and female-owned investment managers in 2016 and 2017 (through March 31)? What is the total dollar amount of those fees by asset class? Please specify the percentage and total dollar amount for African American-, Latino-, Asian American-, and femaleowned, Illinois-headquartered investment managers? Please see Table 4 - Illinois Based MWDBE Managers Exposure. Page 4

5 3. In 2016 and 2017 (through March 31), what is the total dollar amount of commissions paid and percentage of the total paid to Illinois-headquartered minority- and female-owned broker/dealers? Please separate commissions paid as follows: (a) total and (b) net of step outs, correspondence, and/or any other non-direct trading. VI. RFPs Please see Table 5 - Illinois Based MWDBE Broker-Dealer Exposure. 1. How many direct-hire RFP s have you issued in 2017 for emerging managers in the following alternatives asset classes: Real Estate, Hedge Fund, and Private Equity. None 2. Have you issued any RFPs which preclude MWBE firms, as a whole, from responding due to minimum requirements of the RFP? Please include all RFPs issued across all asset classes from June 30, 2016 to March 31, None; MEABF does not preclude MWDBE firms from participating in our RFPs. October 2016 Defensive Equity VII. Verification and Accountability 1. Are all of your underlying managers meeting MWBE brokerage goals? Are there any consequences for underlying managers not meeting MWBE brokerage goals? Yes. The Retirement Board reviews its managers brokerage activity on a quarterly basis. Any managers who fail to meet the Board s brokerage goals, as stated in our Investment Policy Statement, in a given calendar year shall report to the Retirement Board and explain its reasons for non-compliance. Insufficient responses and/or continued underperformance by a manager can lead to a meeting with the Retirement Board, a reduction in assets, or termination of manager. 2. How many of your managers have violated your MWBE Brokerage Policy on multiple occasions? Who are these firms and how many times have they violated the policy? None 3. What are the consequences for individual managers who do not meet or exceed your MWBE goals? Please list managers that are not in compliance with your goals and the total commissions paid in 2016 and 2017 (through March 31). Please list by broker the dollar amounts on your account. Not applicable, all managers are meeting/exceeding our MWDBE goals. The Retirement Board reviews its managers brokerage activity on a quarterly basis. Any managers who fail to meet the Board s brokerage goals, as stated in our Investment Policy Statement, in a given calendar year shall report to the Retirement Board and explain its reasons for non-compliance. Insufficient responses and/or continued underperformance by a manager can lead to a meeting with the Retirement Board, a reduction in assets, or termination of manager. 4. What, if any, precautions do you take so there is no discrimination in hiring or firing a firm based on the political affiliation of a firm s partners or employees? To date, there have been no concerns with political intervention in decision making of hiring/firing of a firm. Page 5

6 5. Are the Fund s transitions managers required to meet or exceed the Fund s minority/women owned brokerage firm utilization goals, if the Fund has goals, when conducting open market trades during transitions? Please explain. Yes. MEABF has four approved transition managers on the approved list. All transition managers on this list are encouraged to utilize MWDBE broker/dealers when conducting transition events for MEABF. Each transition managers are held to the same goals as the investment managers when making open market trades during a transition event. Transition managers are responsible for meeting/exceeding MEABF minimum targets of the asset class specific to the transition event. To date, no transition managers have violated the policy. VIII. Transition Managers and Brokers 1. Please list, by investment manager, all brokers utilized during 2016 and through March 31, 2017, and the total commission paid to each broker utilized. Please denote MWBE brokers by ethnic group and Illinois-based broker/dealers. Please separate the managers and their brokers utilized by asset class (i.e., domestic equity, international equity, fixed income, etc.). For fixed income, please list par value traded by manager with each broker as opposed to estimating commissions. Separate commissions paid as follows: (a) total and (b) net of step outs, correspondence, commission recapture, and/or any other nondirect trading. Please include all asset managers that manage asset classes that trade publically traded securities. (e.g. REIT Managers, Hedge Fund Managers, etc.) Are any managers excluded from your policy currently and what are your plans to rectify this issue? Please see Tables 6.a.-6.f. MWDBE Brokerage Programs 2. Please list transition managers utilized in 2016 and 2017 (through March 31) and commissions paid to each. Have you utilized any MWBE managers? If so who and if not why not? Yes, MEABF has two approved MWDBE transition managers within our pool of transition managers. 3. If you don t use a pool of transition managers, how do you determine which transition managers to utilize? Starting in 2016, MEABF began utilizing pool of four transition managers to bid for an opportunity. 4. Of the transitions that are conducted, what were the total fees and commissions paid to transition managers? Please list and denote fees and commissions paid to all transition managers individually and denote MWBE firms. Please see Table 7 Transition Management. 5. Please list gross commissions paid in 2016 and 2017 (through March 31) to brokers used during transitions. In addition, please list the names and commissions paid to each broker. IX. Assets Please see Table 7 Transition Management. 1. As of December 31, 2016 and March 31, 2017, what were the total amounts of the Fund s assets? Fund s Assets December 31, 2016 $4.30 Billion March 31, 2017 $4.37 Billion Page 6

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8 MUNICIPAL EMPLOYEES' ANNUITY AND BENEFIT FUND OF CHICAGO Total Fund Assets as of December 31, 2016 $4.30 Billion Total Fund Assets as of March 31, 2017 $4.37 Billion Composition of Board and Staff Total Minority/Female Trustees 2 of 5 African American 1 of 5 Latino 0 of 5 Non Minority Female 1 of 5 Total Investment Staff 1 of 2 MWD Manager Utilization Goal Total 20 30% African American 0 of 2 Global Equity 15 25% Asian American 1 of 2 Fixed Income 15 25% Latino 0 of 2 Alternatives 10 20% Total Consultant Staff assigned to MEABF 36.5% African American 2.7% MWD Brokerage Goal Asian American 8.1% Domestic Equity 40% Latino 16.2% International Equity 20% Non Minority Female 9.5% Emerging Markets Equity 10% Staff of Majority Owned Firms assigned to MEABF 46.5% Fixed Income 25% African American 3.2% Asian American 14.1% Latino 4.7% Non Minority Female 24.5%

9 ASSET MANAGEMENT For Calendar Year 2016 As of March 31, 2017 % of % of Assets Managed by % of Assets Managed by Assets Managed by MWBE Asset Assets Managed by MWBE MWBE MWBE Class African American 5.9% Global Equity 40.7% African American 3.8% Global Equity 40.1% Latino(a) 7.6% Fixed Income 24.7% Latino(a) 6.8% Fixed Income 25.3% Asian American 0.0% Alternatives 3.5% Asian American 0.0% Alternatives 3.4% Female 12.0% Female 15.0% Other 0.0% Other 0.0% Fees Paid to MWBE % % of Assets Managed by MWBE % of Total Fees Paid to MWBE % % of Assets Managed by MWBE % of Total African American 8.5% Global Equity 18.6% African American 7.4% Global Equity 18.7% Latino(a) 3.1% Fixed Income 6.0% Latino(a) 2.6% Fixed Income 6.0% Asian American 0.2% Alternatives 1.0% Asian American 0.0% Alternatives 0.9% Female 1.5% Female 4.0% Other 0.3% Other 0.3% % of assets managed by IL MWBE firms 29.4% % of assets managed by IL MWBE firms 19.0% % of fees paid to IL MWBE firms 47.4% % of fees paid to IL MWBE firms 35.4% % of Asset Class

10 BROKERAGE DOMESTIC EQUITY Total Commissions paid to MWBE firms in 2016 Total Commissions paid to MWBE firms in 2017 (in thousands) as of March 31, 2017 (in thousands) $ % $ % African American $ % African American $ % Asian 0.0% Asian 0.0% Disabled % Disabled 6 9.9% Latino % Latino % Female % Female 5 8.6% Total $ % Total $ % Total Commissions paid to IL MWBE firms in Total Commissions paid to IL MWBE firms in 2016 (in thousands) 2017 as of March 31, 2017 (in thousands) $ % $ % IL Based $ % IL Based $ % INTERNATIONAL EQUITY DEVELOPED MARKETS Total Commissions paid to MWBE firms in 2016 Total Commissions paid to MWBE firms in 2017 (in thousands) as of March 31, 2017 (in thousands) $ % $ % African American $ % African American $ % Asian 0.0% Asian 0.0% Disabled 0.0% Disabled 0.0% Latino 9 4.9% Latino % Female 5 2.7% Female 0.0% Total $ % Total $ % Total Commissions paid to IL MWBE firms in Total Commissions paid to IL MWBE firms in $ % $ % IL Based $ % IL Based $ % INTERNATIONAL EQUITY EMERGING MARKETS Total Commissions paid to MWBE firms in 2016 Total Commissions paid to MWBE firms in 2017 (in thousands) as of March 31, 2017 (in thousands) $ % $ % African American $ % African American $ 7 7.0% Asian 0.0% Asian 0.0% Disabled 0.0% Disabled 4 4.6% Latino 0.0% Latino 0.0% Female % Female 0 0.5% Total $ % Total $ % Total Commissions paid to IL MWBE firms in Total Commissions paid to IL MWBE firms in $ % $ % IL Based $ % IL Based $ %

11 FIXED INCOME Total Par Value traded to MWBE firms in 2016 (in thousands) Total Par Value traded to MWBE firms in 2017 as of March 31, 2017 (in thousands) $ % $ % African American 777, % African American 86, % Asian 0.0% Asian 0.0% Disabled 15, % Disabled 0.0% Latino 113, % Latino 18, % Female % Female 0.0% Total 905, % Total 104, % Total Commissions paid to IL MWBE firms in Total Commissions paid to IL MWBE firms in $ % $ % IL Based 473, % IL Based 77, %

12 Appendix E: M/W/DBE Broker-Dealer Utilization Policy Based on the Illinois Pension Code, the Fund must adopt a policy that sets forth goals increasing the utilization of minority broker-dealers. Minority broker-dealer shall mean a qualified broker-dealer who meets the definition of "minority owned business", "female owned business", or "business owned by a person with a disability", as those terms are defined in the Business Enterprise for Minorities, Females, and Persons with Disabilities Act. The Board encourages the use of minority broker-dealers and sets goals, by asset class, regarding their use. In the event that new asset classes are added to the Fund s portfolio, the Board will consider setting or revising applicable minority broker-dealer utilization goals prior to funding any new mandate associated with that asset class. Even where specific minority broker-dealer utilization goals are not set or do not apply, the Board encourages the investment managers to make a best-efforts attempt to utilize minority broker-dealers. Compliance with this policy will be considered part of an investment manager s overall performance. Non-compliance may result in a manager being placed on watch for performance reasons. Continued non-compliance can result in the termination of the investment manager. Investment managers are required to act as fiduciaries when investing Fund assets. As fiduciaries, investment manager decisions are made for the exclusive benefit of the Fund, its participant and their beneficiaries. Investment managers are required to search for best execution in selecting brokerage firms for trade execution services. The Board defines best execution as achieving the best possible terms of execution while taking into account both explicit and implicit trading costs. The investment manager s selection of such brokers shall be in accordance with Article 1 of the Illinois Pension Code (40 ILCS 5/1-101 et seq.), the Investment Advisers Act of 1940 and any other applicable securities laws, rules and regulations. The asset class specific utilization goals and reporting requirements are as follows: Equity Managers: Subject to best execution, in accordance with the goals and objectives of the account agreement, each investment manager who manages equities on behalf of the Board in non-commingled accounts shall make every effort to adhere to the following policy goals of the Board: 40% of total domestic equity trading, measured in commission dollars, shall be executed with minority brokerdealers on a calendar year basis. 20% of total international equity trading within mandates dealing predominantly in developed market securities, measured in commission dollars, shall be executed with minority broker-dealers on a calendar year basis. 10% of total international equity trading within mandates dealing predominantly in emerging market securities, measured in commission dollars, shall be executed with minority broker-dealers on a calendar year basis Managers shall not utilize indirect methods, such as step-out commissions, to achieve these goals. Trades executed utilizing electronic trading platforms that are not competitively provided by minority broker-dealers shall be excluded from the trading goals. Each manager shall submit a monthly progress report to Fund s Investment Staff following the end of each month that details all trading activity with minority broker-dealers. Progress reports shall also be included in the manager s quarterly performance report to the Board. Annually, the manager will submit a compliance report that will be reported to the Board. The reports shall separate information by broker-dealer and include: 1. Total shares traded, total trading commissions and average commission cost per share 2. Total shares executed at a commission rate that includes services in addition to execution services; description of additional services provided. 3. List of all forms of payments made to minority broker-dealers, including but not limited to, trading execution commissions, step-out commissions, research purchased and soft dollar credits purchased. 4. Explanation if trading activity is not in compliance with Board objectives.

13 Fixed Income Managers: Subject to best execution, in accordance with the goals and objectives of the account agreement, each manager that manages fixed income securities on behalf of the Board in non-commingled accounts shall make every effort to initiate trading activity in accordance with the following policy objectives of the Board: 25% of trading volume (based on par value) in U.S. investment grade fixed income securities traded in secondary markets shall be with minority broker-dealers on a calendar year basis. When purchasing new issue securities, the manager will make every effort to utilize minority broker-dealers who are part of the underwriting syndicate selling the new issues. Each manager will submit a monthly progress report to Investment Staff following the end of each month that details trading activity with minority broker-dealers. Progress reports will also be included in the manager s quarterly performance report to the Board. Annually, the manager will submit a compliance report that will be reported to the Board. The reports shall separate information by broker-dealer and include: 1. Total volume of securities traded by broker-dealer, based on par value. 2. Explanation if trading activity is not in compliance with Board objectives.

14 Table 1 Diversity Table Results As of 3/31/2017 Data for All Investment Management Firms Total Non Minority African Hispanic/ Asian Other Ttl Minorities MEABF of Chicago Employees Female American Latino American Minority and Females Total 23,683 5,981 1,873 1,885 3, ,376 % (excluding support staff) 24.3% 7.3% 7.4% 12.7% 1.7% 53.4% Data for employees related to MEABF account Total assigned Non Minority African Hispanic/ Asian Other Ttl Minorities MEABF of Chicago to MEABF Female American Latino American Minority and Females Total 2, ,331 % (excluding support staff) 24.5% 3.2% 4.7% 14.1% 1.3% 47.8% This table was prepared by MEABF staff based on the accumulation of data received by the Investment Managers.

15 Table 2 Asset Allocation - MWDBE Managers As of 12/31/2016 Total Fees Paid IL Mgr of Mgrs Classification Domestic Equity Edgar Lomax $ 27,203, % $ 58, % Yes African American Channing 24,923, % 71, % Yes Yes African American Decatur Capital 844, % 22, % Yes African American Herndon 0.0% 30, % African American Holland Capital 59,543, % 321, % Yes African American Ariel Investments 130,648, % 470, % Yes African American Manager of Managers FIS Group 0.0% 644, % Yes African American Real Estate Capri Select Income II, LLC 22, % 0.0% Yes African American Private Equity Muller & Monroe ILPEFF 3,139, % 2, % African American Muller & Monroe MPEFF 8,597, % 74, % African American Total African American $ 254,921,544 $ 1,695,527 Total Fees Paid IL Mgr of Mgrs Classification Domestic Equity Apex Capital Management $ 0.0% $ 34, % Yes Asian American Total Asian American $ $ 34,747 Total Fees Paid IL Mgr of Mgrs Classification Real Estate Newport Capital $ 1,881, % $ 55, % Yes Disabled Total Disabled $ 1,881,322 $ 55,804 Total Fees Paid IL Mgr of Mgrs Classification Fixed Income LM Capital $ 260,187, % $ 316, % Latino Domestic Equity Fortaleza 577, % 75, % Yes Yes Latino Lombardia 18,304, % 68, % Yes Yes Latino International Equity Ativo Capital 40,299, % 82, % Yes Yes Latino Private Equity Hispania Private Equity II, L.P. 4,484, % 36, % Latino Nogales Investors Fund I, L.P. 52, % 0.0% Latino Nogales Investors Fund II, L.P. 938, % 40, % Latino Total Latino $ 324,844,936 $ 620,623 Total Fees Paid IL Mgr of Mgrs Classification Domestic Equity Oakbrook Investment $ 30,862, % $ 88, % Yes Yes Woman RhumbLine S&P 500 Index 321,042, % 43, % Woman Rhumbline MCG 144,405, % 20, % Woman Private Equity Levine Leichtman Capital Partners IV, L.P. 7,519, % 78, % Woman Levine Leichtman Capital Partners SBIC Fund, L.P. 14,302, % 61, % Woman Total Woman $ 518,133,862 $ 292,050 As of 3/31/2017 Total Fees Paid IL Mgr of Mgrs Classification Domestic Equity Edgar Lomax $ 14,812, % $ 10, % Yes African American Channing 15,753, % 16, % Yes Yes African American Holland Capital 1,243, % 40, % Yes African American Ariel Investments 125,035, % 124, % Yes African American Manager of Managers FIS Group 0.0% 129, % Yes African American Real Estate Capri Select Income II, LLC 20, % 0.0% Yes African American Private Equity Muller & Monroe ILPEFF 1,192, % 0.0% Yes African American Muller & Monroe MPEFF 7,599, % 20, % Yes African American Total African American $ 165,658,428 $ 341,523 Total Fees Paid IL Mgr of Mgrs Classification Real Estate Newport Capital $ 566, % $ 13, % Yes Disabled Total Disabled $ 566,784 $ 13,636 Total Fees Paid IL Mgr of Mgrs Classification Fixed Income LM Capital $ 262,642, % $ 77, % Latino International Equity Lombardia 15,182, % 8, % Yes Yes Latino Ativo Capital 15,380, % 13, % Yes Yes Latino Private Equity Hispania Private Equity II, L.P. 3,287, % 18, % Yes Latino Nogales Investors Fund I, L.P. 30, % 0.0% Latino Nogales Investors Fund II, L.P. 691, % 2, % Latino Total Latino $ 297,215,354 $ 120,890 Total Fees Paid IL Mgr of Mgrs Classification Domestic Equity Oakbrook Investment $ 14,869, % $ 14, % Yes Yes Woman Bowling 14,501, % 12, % Yes Woman RhumbLine S&P 500 Index 403,419, % 13, % Woman Rhumbline MCG 154,346, % 5, % Woman International Equity Martin 13,580, % 4, % Yes Yes Woman Strategic Global 15,437, % 13, % Yes Woman Change 15,001, % 9, % Yes Woman Private Equity Levine Leichtman Capital Partners IV, L.P. 7,355, % 10, % Woman Levine Leichtman Capital Partners SBIC Fund, L.P. 17,725, % 0.0% Woman Total Woman $ 656,238,373 $ 83,646

16 Table 3 Asset Allocation - MWDBE Managers (Non-Manager of Managers) As of 12/31/2016 Total Fees Paid IL Classification Domestic Equity Herndon $ 0.0% $ 30, % African American Holland Capital 59,543, % 321, % Yes African American Ariel Investments 130,648, % 470, % Yes African American Real Estate Capri Select Income II, LLC 22, % 0.0% Yes African American Private Equity Muller & Monroe ILPEFF 3,139, % 2, % African American Muller & Monroe MPEFF 8,597, % 74, % African American Total African American $ 201,951,116 $ 899,106 Total Fees Paid IL Classification Real Estate Newport Capital $ 1,881, % $ 55, % Yes Disabled Total Disabled $ 1,881,322 $ 55,804 Total Fees Paid IL Classification Fixed Income LM Capital $ 260,187, % $ 316, % Latino Private Equity Hispania Private Equity II, L.P. 4,484, % 36, % Latino Nogales Investors Fund I, L.P. 52, % 0.0% Latino Nogales Investors Fund II, L.P. 938, % 40, % Latino Total Latino $ 265,662,984 $ 394,046 Total Fees Paid IL Classification Domestic Equity RhumbLine S&P 500 Index 321,042, % 43, % Woman Rhumbline MCG 144,405, % 20, % Woman Private Equity Levine Leichtman Capital Partners IV, L.P. $ 7,519, % $ 78, % Woman Levine Leichtman Capital Partners SBIC Fund, L.P. 14,302, % 61, % Woman Total Woman $ 487,270,909 $ 203,485 As of 3/31/2017 Total Fees Paid IL Classification Domestic Equity Holland Capital 1,243, % 40, % Yes African American Ariel Investments 125,035, % 124, % Yes African American Real Estate Capri Select Income II, LLC 20, % 0.0% Yes African American Private Equity Muller & Monroe ILPEFF 1,192, % 0.0% Yes African American Muller & Monroe MPEFF 7,599, % 20, % Yes African American Total African American $ 135,092,512 $ 185,014 Total Fees Paid IL Classification Real Estate Newport Capital $ 566, % $ 13, % Yes Disabled Total Disabled $ 566,784 $ 13,636 Total Fees Paid IL Classification Fixed Income LM Capital $ 262,642, % $ 77, % Latino Private Equity Hispania Private Equity II, L.P. 3,287, % 18, % Yes Latino Nogales Investors Fund I, L.P. 30, % 0.0% Latino Nogales Investors Fund II, L.P. 691, % 2, % Latino Total Latino $ 266,651,960 $ 99,129 Total Fees Paid IL Classification Domestic Equity RhumbLine S&P 500 Index $ 403,419, % $ 13, % Woman Rhumbline MCG 154,346, % 5, % Woman Private Equity Levine Leichtman Capital Partners IV, L.P. $ 7,355, % $ 10, % Woman Levine Leichtman Capital Partners SBIC Fund, L.P. 17,725, % 0.0% Woman Total Woman $ 582,847,884 $ 29,264

17 Table 4 Illinois Based MWDBE Managers Exposure As of 12/31/2016 Total Fees Paid Classification AUM % of % of % of % of Total Fees IL-MWDBE Asset Class IL-MWDBE Asset Class U.S. Equity Ariel Investments $ 130,648, % 15.0% $ 470, % 36.0% African American Channing 24,923, % 2.9% 71, % 5.4% African American Fortaleza 577, % 0.1% 75, % 5.8% Latino Holland Capital 59,543, % 6.9% 321, % 24.6% African American Lombardia* 18,304, % 2.1% 68, % 5.3% Latino Oakbrook Investment 30,862, % 3.6% 88, % 6.8% Woman Illinois Based MWDBE U.S. Equity Total $ 264,861, % 30.5% $ 1,095, % 84.0% MWDBE U.S. Equity Total $ 868,230,438 $ 1,304,911 International Equity Ativo Capital $ 40,299, % 100.0% $ 82, % 100.0% Latino Illinois Based MWDBE International Equity Total $ 40,299, % 100.0% $ 82, % 100.0% MWDBE International Equity Total $ 40,299,632 $ 82,061 Private Equity Muller & Monroe $ 11,736, % 30.1% $ 77, % 26.2% African American Hispania Private Equity II, L.P. 4,484, % 11.5% 36, % 12.5% Latino Illinois Based MWDBE Private Equity Total $ 16,221, % 41.6% $ 114, % 38.8% MWDBE Private Equity Total $ 39,034,756 $ 294,483 Real Estate Capri Capital Advisors $ 22, % 1.2% $ - 0.0% 0.0% African American Newport Capital 1,881, % 98.8% 55, % 100.0% Disabled Illinois Based MWDBE Real Estate Total $ 1,903, % 100.0% $ 55, % 100.0% MWDBE Real Estate Total $ 1,903,509 $ 55,804 As of 3/31/2017 Total Fees Paid Classification AUM % of % of % of % of Total Fees IL-MWDBE Asset Class IL-MWDBE Asset Class U.S. Equity Ariel Investments $ 125,035, % 16.8% $ 124, % 53% African American Channing 15,753, % 2.1% 16, % 7% African American Holland Capital 1,243, % 0.2% 40, % 17% African American Oakbrook Investment 14,869, % 2.0% 14, % 6% Woman Illinois Based MWDBE U.S. Equity Total $ 156,902, % 21.1% $ 195, % 82% MWDBE U.S. Equity Total $ 743,982,863 $ 237,419 International Equity Ativo Capital $ 15,380, % 20.6% $ 13, % 26.5% Latino Lombardia* $ 15,182, % 20.4% $ 8, % 17.5% Latino Martin 13,580, % 18.2% 4, % 9.2% Woman Illinois Based MWDBE International Equity Total $ 44,144, % 59.2% $ 26, % 53.3% MWDBE International Equity Total $ 74,582,913 $ 49,366 Private Equity Muller & Monroe $ 8,792, % 23.2% $ 20, % 13.2% African American Hispania Private Equity II, L.P. 3,287, % 8.7% 18, % 12.0% Latino Illinois Based MWDBE Private Equity Total $ 12,079, % 31.9% $ 38, % 25.1% MWDBE Private Equity Total $ 37,882,740 $ 151,964 Real Estate Capri Capital Advisors $ 20, % 3.5% $ - 0.0% 0.0% African American Newport Capital 566, % 96.5% 13, % 100.0% Disabled Illinois Based MWDBE Real Estate Total $ 587, % 100.0% $ 13, % 100.0% MWDBE Real Estate Total $ 587,585 $ 13,636 *Illinois based is made up investment managers headquartered in Illinois and/or investment team that is based in Illinois.

18 Table 5 Illinois Based MWDBE Broker-Dealer Exposure As of 12/31/2016 Total Domestic Equity Brokerage African American Latino Women Asian Disabled Total $ 58,360 $ 3,936 $ 49,969 $ - $ - $ 112, % 2.5% 31.3% 0.0% 0.0% 70.3% Total Int'l Equity Developed Market Brokerage African American Latino Women Asian Disabled Total $ 17,690 $ 8,952 $ 4,998 $ - $ - $ 31, % 21.8% 12.2% 0.0% 0.0% 77.0% Total Int'l Equity Emerging Market Brokerage African American Latino Women Asian Disabled Total $ 31,539 $ - $ 10,275 $ - $ - $ 41, % 0.0% 24.6% 0.0% 0.0% 100.0% Total Fixed Income Brokerage (Par Value) African American Latino Women Asian Disabled Total 450,490,000 22,805, ,295, % 2.5% 0.0% 0.0% 0.0% 52.3% As of 3/31/2017 Total Domestic Equity Brokerage African American Latino Women Asian Disabled Total $ 19,392 $ 3,276 $ 4,944 $ - $ - $ 27, % 7.5% 11.3% 0.0% 0.0% 63.1% Total Int'l Equity Developed Market Brokerage African American Latino Women Asian Disabled Total $ 7,173 $ 14,518 $ - $ - $ - $ 21, % 56.1% 0.0% 0.0% 0.0% 83.8% Total Int'l Equity Emerging Market Brokerage African American Latino Women Asian Disabled Total $ 6,763 $ - $ 481 $ - $ - $ 7, % 0.0% 4.1% 0.0% 0.0% 61.7% Total Fixed Income Brokerage (Par Value) African American Latino Women Asian Disabled Total 62,125,000 15,695, ,820, % 15.0% 0.0% 0.0% 0.0% 74.2%

19 Table 6.a. MUNICIPAL EMPLOYEES' ANNUITY AND BENEFIT FUND OF CHICAGO MWDBE Brokerage Program - Domestic Equity YTD 2016 Goal: 40% of total domestic trading Minority Business Enterprises (M/W/DBE) Williams Cabrera Topeka Mischler M Ramsey Telsey Siebert Montrose Loop Capital Drexel Castleoak Blaylock & Podesta & Cheevers & Academy Sturdivant North South Penserra YTD Capital Capital Capital Financial King Advisory Branford Securities M/W/DBE % of Markets Hamilton Securities Company Company Company Securities & Company Capital Securities Brokerage Group Markets Markets Group Securities Group Shank Equities Total Total Large Capitalization Great Lakes Advisors $ 25,481 $ 13,655 $ - $ 11,827 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 25, % Holland Capital 20,802 1, , , , % 46,284 14,990-11, , , , % Small/Mid Capitalization Ariel Capital 55,177 4,062 5,485 1,932 5,401 2, ,507 4,105-1,056-7, ,815-42, % Geneva Capital 10, ,858-2, , % Keeley Asset Management 137,635 38, , , , % 203,620 43,371 5,485 1,932 5,401 2, ,484 10,365 4,105 2,187 1,056-7,024-16,352-1, , % Sub-Total 249,904 58,360 5,485 13,759 5,401 2, ,783 11,319 4,105 2,187 1, ,708 1,310 17,197-1, , % Other - Transitions 5, , , , % Total Domestic Equity $ 255,636 $ 58,360 $ 5,485 $ 13,759 $ 5,401 $ 3,936 $ 696 $ 20,783 $ 11,319 $ 4,105 $ 2,187 $ 1,056 $ 669 $ 11,640 $ 1,310 $ 17,197 $ - $ 1,815 $ - $ 159, % AA AA Disabled AA L AA W W Disabled AA AA W L Disabled W W AA As IL-HQ IL-HQ IL-HQ IL-HQ IL-HQ IL-HQ African African Latino Women Asian Disabled Total MWDBE American IL MWDBE American Latino Women Asian Disabled Total $ 75,000 $ 15,576 $ 49,969 $ - $ 19,173 $ 159,719 $ 58,360 $ 3,936 $ 49,969 $ - $ - $ 112, % 6.1% 19.5% 0.0% 7.5% 62.5% 36.5% 2.5% 31.3% 0.0% 0.0% 70.3% YTD 2017 Q1 Goal: 40% of total domestic trading Minority Business Enterprises (M/W/DBE) Williams Cabrera Topeka Mischler M Ramsey Telsey Siebert Montrose Loop Capital Drexel Castleoak Blaylock & Podesta & Cheevers & Academy Sturdivant North South Penserra YTD Capital Capital Capital Financial King Advisory Branford Securities M/W/DBE % of Markets Hamilton Securities Company Company Company Securities & Company Capital Securities Brokerage Group Markets Markets Group Securities Group Shank Equities Total Total Large Capitalization Great Lakes Advisors $ 4,097 $ 3,131 $ - $ 966 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 4, % Holland Capital % 4,902 3, , % Small/Mid Capitalization Ariel Capital 19,935 1,836 2, ,940 3, , , , % Geneva Capital 4, , % Keeley Asset Management 16,664 1,536-1, , , , % 40,771 4,096 2,968 1,736 3,940 3, , , , , , % Sub-Total 45,673 7,300 3,027 2,702 3,940 3, , , , , , % Other - Transitions 12,092 12, , % Total Domestic Equity $ 57,765 $ 19,392 $ 3,027 $ 2,702 $ 3,940 $ 3,276 $ 260 $ 1,444 $ 260 $ 2,095 $ 531 $ - $ - $ 2,678 $ 939 $ 3,240 $ - $ - $ - $ 43, % AA AA Disabled AA L AA W W Disabled AA AA W L Disabled W W AA As IL-HQ IL-HQ IL-HQ IL-HQ IL-HQ IL-HQ African African Latino Women Asian Disabled Total MWDBE American IL MWDBE American Latino Women Asian Disabled Total $ 27, $ 5, $ 4, $ - $ 5, $ 43, $ 19, $ 3, $ 4, $ - $ - $ 27, % 10.3% 8.6% 0.0% 9.9% 75.8% 44.3% 7.5% 11.3% 0.0% 0.0% 63.1%

20 Developed Market Minority Business Enterprises (M/W/DBE) Loop Cabrera Williams Cheevers M YTD Capital Capital Capital & Ramsey WMDBE % of Brokerage Markets Markets Group Company King Total Total LSV Asset Management $ 18,862 $ 9,006 $ 849 $ - $ - $ - $ 9, % Cornerstone Capital 92,886 8,684-9, , % Segall Bryant & Hamill 55,260-8, , % Walter Scott & Partners 17, ,998 4, % Emerging Market Table 6.b. MUNICIPAL EMPLOYEES' ANNUITY AND BENEFIT FUND OF CHICAGO MWDBE Brokerage Program - International Equity YTD 2016 Goal: 20% of total international developed market trading Goal: 10% of total international emerging market trading Total Developed Market 184,410 17,690 8,952 9,449-4,998 41, % William Blair 309,263 31, ,275-41, % Total Emerging Market 309,263 31, ,275-41, % MWDBE Developed Market AA L AA W W IL-HQ IL-HQ IL-HQ IL-HQ African American Latino Women Asian Disabled Total $ 27,138 $ 8,952 $ 4,998 $ - $ - $ 41, % 4.9% 2.7% 0.0% 0.0% 22.3% Emerging Market IL MWDBE Developed Market African American Latino Women Asian Disabled Total $ 31,539 $ - $ 10,275 $ - $ - $ 41, % 0.0% 3.3% 0.0% 0.0% 13.5% African American Latino Women Asian Disabled Total $ 17,690 $ 8,952 $ 4,998 $ - $ - $ 31, % 21.8% 12.2% 0.0% 0.0% 77.0% Emerging Market African American Latino Women Asian Disabled Total $ 31,539 $ - $ 10,275 $ - $ - $ 41, % 0.0% 24.6% 0.0% 0.0% 100.0%

21 Table 6.c. MUNICIPAL EMPLOYEES' ANNUITY AND BENEFIT FUND OF CHICAGO MWDBE Brokerage Program - International Equity YTD 2017 Q1 Goal: 20% of total international developed market trading Goal: 10% of total international emerging market trading Minority Business Enterprises (M/W/DBE) Loop Cabrera Williams Cheevers Mischler M YTD Capital Capital Capital & Financial Ramsey WMDBE % of Brokerage Markets Markets Group Company Group King Total Total Developed Market LSV Asset Management $ 4,514 $ 1,591 $ 938 $ - $ - $ - $ - $ 2, % Cornerstone Capital 45,188 5,582-4, , % Segall Bryant & Hamill 13,436-12, , % Walter Scott & Partners 9, % Emerging Market Total Developed Market 72,547 7,173 14,518 4, , % William Blair 97,251 6, ,497-11, % Total Emerging Market 97,251 6, ,497-11, % MWDBE Developed Market AA L AA W Disabled W IL-HQ IL-HQ IL-HQ IL-HQ African American Latino Women Asian Disabled Total $ 11,367 $ 14,518 $ - $ - $ - $ 25, % 20.0% 0.0% 0.0% 0.0% 35.7% Emerging Market IL MWDBE Developed Market African American Latino Women Asian Disabled Total $ 6,763 $ - $ 481 $ - $ 4,497 $ 11, % 0.0% 0.5% 0.0% 4.6% 12.1% African American Latino Women Asian Disabled Total $ 7,173 $ 14,518 $ - $ - $ - $ 21, % 56.1% 0.0% 0.0% 0.0% 83.8% Emerging Market African American Latino Women Asian Disabled Total $ 6,763 $ - $ 481 $ - $ - $ 7, % 0.0% 4.1% 0.0% 0.0% 61.7%

22 Table 6.d. Municipal Employees' Annuity and Benefit Fund of Chicago MWDBE Brokerage Program - Fixed Income YTD 2016 Goal 25% of trading volume (par value) Manager Minority Business Entreprises (M/W/DBE) Total Cabrera Loop Capital Castleoak MFR Williams Drexel CL King & Penserra Account Capital M/W/DBE Markets Securities Financial Capital Group Hamilton Associates Securities Activity Markets Total % UBS Asset Management** 2,454,497, ,590, ,721, ,311, % Neuberger Berman 515,560,584 55,510,000 27,375,000-20,015,000-15,370, ,270, % LM Capital 154,388,000 2,025,000 3,500,000 84,960,000-9,550, ,300, ,335, % Segall Bryant & Hamill 190,909,014 38,365, ,255, ,000-51,795, % Total Account Trading 3,315,354, ,490, ,596,000 84,960,000 20,015,000 22,805,000 15,370, ,000 5,300, ,711, % **Represents Par Amount AA AA L AA L Disabled W L IL-HQ IL IL IL-HQ IL MWDBE African American Latino Women Asian Disabled Total 777,101, ,065, ,000-15,370, ,711,000 23% 3% 0% 0% 0% 27% IL MWDBE African American Latino Women Asian Disabled Total 450,490,000 22,805, ,295,000 50% 3% 0% 0% 0% 52% YTD 2017 Q1 Goal 25% of trading volume (par value) Manager Minority Business Entreprises (M/W/DBE) Total Cabrera Loop Capital Castleoak MFR Williams Drexel CL King & Penserra Account Capital Markets Securities Financial Capital Group Associates Securities M/W/DBE Hamilton Activity Markets Total % UBS Asset Management** 250,310,029 46,980,000 21,045, ,025, % Neuberger Berman 50,757,707 9,095,000 1,080,000-2,000, ,175, % LM Capital 15,600, ,000,000-5,200, ,200, % Segall Bryant & Hamill 53,840,050 6,050, ,495, ,545, % Total Account Trading 370,507,786 62,125,000 22,125,000 3,000,000 2,000,000 15,695, ,945, % **Represents Par Amount AA AA L AA L Disabled W L IL-HQ IL IL IL-HQ IL MWDBE African American Latino Women Asian Disabled Total 86,250,000 18,695, ,945,000 23% 5% 0% 0% 0% 28%

23 Table 6.e. Municipal Employees' Annuity and Benefit Fund of Chicago Domestic Equity Total Brokerage Activity YTD 2016 Domestic Equity Brokerage Commissions As of December 31, 2016 Broker Name Commissions Shares Loop Capital* $ 90,353 3,666,818 Cabrera Capital* 33,674 2,626,512 RBC Dain Rauscher 25, ,081 Drexel Hamilton 24, ,352 Williams Capital* 24, ,745 Stifel Nicolaus & Co 19, ,818 CL King & Associates 17, ,577 Cheevers & Company Inc.* 16, ,481 Instinet 8, ,951 Raymond James 8, ,466 Penserra Securities* 7, ,907 CastleOak Securities Inc.* 7, ,798 Goldman Sachs 6, ,628 Citation Group 6, ,915 Credit Suisse 6, ,191 Robert W. Baird & Company Inc. 6, ,906 Morgan Stanley 6, ,237 Investment Technology Group Inc. 5,650 1,513,820 William Blair & Co 4, ,344 William O'Neil 4, ,700 North South Capital 4, ,449 Academy Securities Inc. 4, ,648 J.P. Morgan 4, ,715 Keybanc Capital Markets Inc. 3,679 92,506 Cap Institutional Services Inc. 3,533 74,982 Weeden & Company 3, ,405 Keefe Bruyette & Woods Inc. 2,983 72,707 Baypoint Trading 2, ,000 Jefferies & Company 2, ,991 Jonestrading Inst Serv 2, ,210 Merrill Lynch 2, ,035 Blaylock & Company Inc.* 2,571 75,080 Sturdivant & Co. Inc.* 2,441 63,140 Cantor Fitzgerald & Co. 2, ,886 National Financial Securities Corp 2,321 64,669 Guzman & Company 1, ,028 Sanford C. Bernstein & Co. 1,445 43,369 Topeka Capital* 1,430 39,779 Mischler Financial Group* 1,351 63,700 Johnson Rice & Co. 1,349 34,537 Sidoti & Company 1,338 26,766 Percival Financial Partners 1,099 31,400 Stephens Inc. 1,082 25,625 Harris Nesbitt Corp ,300 M. Ramsey King Securities* ,934 Other Brokers 19, ,288 Total $ 409,544 17,346,396 *Women-, minority- and disabled-owned brokerage firm. The Retirement Board's brokerage policy encourages investment managers, as they search for best possible trade execution, to utilize women-, minority- and disabled-owned business enterprises, specifically firms headquartered in the State of Illinois. *differences due to rounding