The. Retirement Board. of the. PoUcemen's Annuity ATuCBenept Furuf City of Chicago. 221 North LaSade. Street-Room 1626

Transcription

1 Members of the Board Representing the Public Carole L. Brown Haydee Caldero Carol L. Hamburger Kurt A. Summers, Jr. Representing the Active Police and Disability Beneficiaries Thomas A. Beyna James P. Maloney, Recording Secretary Brian E. Wright, Vice-President Representing the Annuitants Kenneth A. Hauser, President The. Retirement Board of the. PoUcemen's Annuity ATuCBenept Furuf City of Chicago 221 North LaSade. Street-Room 1626 Chicago, iq.inois (312) Outside Chicago: Regina Tuczak, CPA Executive Director Aoifinn Devitt Chief Investment Officer August A. Madonia, CPA Assistant Comptroller Peter Orris, M.D. Physician David R. Kugler & Associates, Ltd. Board Counsel Address Communications to the Retirement Board October 6, 2017 Office of the Senate President 160 N.LaSalle Street Bilandic Building Ste. 720 Chicago, IL Attn: Ozie Goodwin Dear Office of the Senate President, Please accept the submission of the Policemen's Annuity and Benefit Fund of Chicago (the Fund) responses to the Minority and Female Investment Hearing Questionnaire in anticipation of the hearings of the Senate Committee on October 16 and 17, Thank you for your continued interest in the Fund's utilization ofmwdbe investment managers and brokers. Should you have any questions or need additional information, please contact Regina Tuczak at (312) Sincerely, ^^cno'^^^jio legina Tuczak; Executive Director A^^-^^z^" Ms. Aoifinn Devitt Chief Investment Officer

2 Response to the Illinois Senate Minority and Female Investment Questionnaire on Behalf of the Chicago Policemen's Annuity and Benefit Fund October 2017

3 Minority and Female Investment Hearing Questionnaire Special Committee on State and Pension Fund Investments 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. Trustee Name African Latino Female Haydee Caldero 1 1 Carole Brown 1 1 Carol Hamburger 1 Kurt Summers, Jr. 1 TOTAL (#) 2/8 1/8 3/8 4/8 (%) 25% 12.5% 37.5% 50% 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. The Policy was updated to incorporate requirements of SB 452/Public Act It has been implemented and we are continuously surveying the universe to source suitable minority and female-owned businesses for our portfolio. The Chief Investment Officer held the following meetings since August 1, 2016 (the date that data was last provided to this forum) and the numbers of emerging managers are indicated in the fourth column. There are currently some asset classes (e.g. infrastructure, tactical asset allocation) that do not have minority and women representation, but we are actively seeking to rectify this as we alter our manager mix within these areas. Please reference Exhibit A for the Fund s policy regarding hiring minority and women owned investment managers. Month Manager Meetings Of which Emerging Managers May Jun Jul Aug Sept Oct Nov Dec Jan Feb March April May June July

4 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 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. 4. What steps is the Fund taking to encourage direct trading with minority- and femaleowned broker/dealers across all relevant asset classes instead of step-outs and correspondent relationships? Step-outs to meet MWDBE brokerage requirements are prohibited since January of 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? The goals are now explicit. 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) The Fund has implemented improvements in monitoring and reporting. Annually, the Fund's goals for emerging market managers are reviewed and considered. Additionally, in accordance with PA , the Fund does not exclude any MWBE firms based on assets levels ( AUM ) or inception date of the firms or the proposed product. MWBE firms under consideration for a mandate are required to provide a MWDBE certification. Yes, the Board meeting and Investment Committee meeting is entirely opened to the public. Yes, the Board does enter into Executive Sessions. These sessions are held to protect the assets of the Fund, including the purchase and sale of certain securities. Additionally, contract negotiations are discussed. 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 allocate a maximum allocation to MWBE firms. 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. 2

5 The fund appointed a new Chief Investment Officer, Ms. Aoifinn Devitt, in April There are no other investment staff, although the Fund s Executive Director, Ms. Regina Tuczak, also assists in investment matters occasionally. As such 100 the Fund s investment staff are women. There are 0% African Americans, Asian Americans and Latinos. 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. Four individuals are assigned to the PABF account; two of these individuals are African American women. In total, African American women make up 50 the Fund s assigned team. Name Title Ethnicity Gender Kevin Leonard Partner, Senior Consultant White Male Kristin Finney-Cooke Senior Consultant African American Female DeAnna Ingram-Jones Senior Analyst African American Female Mark Fromsom Performance White Male 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. NEPC has a total of 264 employees (excluding support staff), 6% (or 17 employees) of employees are African American, 8% (or 21 employees) are Asian American and 3% (7 employees) are Latino America and 30% (or 78 employees) are women. Staff Non-Minority Men Non- Minority Women African American (Male & Female) Asian (Male & Female) Latino (Male & Female) Number Percentage 100% 53% 30% 6% 8% 3% 2. What standards do you and your consultants use to confirm and certify that an investment manager or broker is MWBE? NEPC uses evestment to identify MWDBE managers. Additionally, all firms submitting an RFP response to the Fund is required to submit a copy of their MWDBE certification with their response. With respect to brokers, this decision is outsourced to the Fund's investment managers. 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? In 2016, firm-wide NEPC recommended 62 MWBE firms in 121 different searches. In 2017, through March 31, 2017, 36 MWBE firms have been recommended in 38 different searches. Of these searches, 2 were specifically for MWDBE firms. Currently, NEPC has 24 strategies on 3

6 NEPC s Preferred list. In 2016, the Fund issued 2 RFPs; for these RFPs 3 MWBE firms were recommended as finalists. 2 of the 3 selected MWBE finalist firms were retained by the Fund. In 2017, the Fund issued 2 RFPs; for these RFPs 2 MWBE firms were selected as finalists. For these RFPs, the Board has not yet awarded these mandates. 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 attached Exhibit B, which contains the diversity tables submitted by the Fund's investment managers for March 31, 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. Class Ownership Category Manager Name % Managed with in Class as of 12/31/16 Alternatives African American Muller & Monroe 5% 2% Alternatives Disabled Veteran Newport Capital Partners 1% 0% Alternatives Woman Pluscios 7% 4% Equity African American EARNEST Partners 7% 8% Equity African American Holland Capital 8% 8% Equity Native American Denali Advisors 4% 4% Fixed Income Latino LM Capital 15% 12% % Managed with in Class as of 3/31/17 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. For the time in which the data was collected, the Fund did not have a manager of managers program. The data presented above, represents direct investments. 4. Are any of your manager of managers 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.) The Fund does not use manager of managers programs. 5. 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. The Fund did not use a manager of managers program as of March 31, 2017, but has subsequently retained BluePrint Capital Advisors as a manager of managers in the private credit area. The Fund s allocation was one of BluePrint s first mandates. 4

7 V. Illinois-headquartered Managers 1. What percent of assets by asset class were allocated to Illinois-headquartered minority- and female-owned 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 manages relative to each asset class? Class Ownership Category Manager Name % Managed with in Class as of 12/31/16 Alternatives African American Muller & Monroe 5% 2% Alternatives Disabled Veteran Newport Capital Partners 1% 0% Alternatives Woman Pluscios 7% 4% Equity African American Holland Capital 8% 8% % Managed with in Class as of 3/31/17 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 female-owned, Illinois-headquartered investment managers? Class Ownership Category Manager Name Fees Paid YTD 2016 % Fees (relative to Class as of 12/31/16) Fees Paid as of 3/31/17 % Fees (relative to Class as of 3/31/17) Alternatives African American Muller & Monroe 545,357 7% 191,900 9% Alternatives Disabled Veteran Newport Capital 74,354 1% 10,500 0% Alternatives Woman Pluscios 98,454 1% 39,156 2% Equity African American Holland Capital 201,747 3% 95,512 4% 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. as of December 31, 2016 as of March 31, 2017 Class Commission Paid Commission Commission Paid Commission Domestic Equity 449,136 34% 385,114 32% International Equity 553,469 21% 363,327 18% Fixed Income (Volume) N/A % N/A 11% 5

8 VI. RFPs 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? One direct-hire RFP was issued in 2017 for a hedge fund of fund manager (this was not explicitly an emerging manager RFP, but we welcomed applications from this group and one female run firm has been selected for the shortlist). 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, No. All of our RFPs explicitly state that MWBE firms are not subject to the same minimum requirements in the RFP as other firms. RFPs issued since June 2016 Income Generating Strategies (2016) Cash Management (2016) Secondaries Brokerage (2016) 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? Managers that do not meet MWBE brokerage goals are placed on the Fund's watch list. If the situation is not remedied, they are requested to present to the Fund's Board of Trustees. Termination is considered on a case by case basis. 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? Artisan has been on the Fund's watch list since July of 2013, due to failure to meet brokerage requirements. 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. The managers are placed on the Fund's Watch List. If the situation is not remedied, they are requested to present to the Board of Trustees. Termination is considered on a case-by-case basis. Currently, Artisan is on the Fund's Watch List for failure to comply with the Fund's brokerage policy. Please see Exhibit C for specific broker and commissions details. 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? Each RFP requests minimum requirements of the respondent. Such minimum requirements include, but are not limited to, longevity of the product offered, agreement and ability to serve as fiduciary to 6

9 the Fund, established track record, minimum level of assets under management, quantity of dedicated investment professionals, explanation of style and product objectives. Prior to hiring any investment management firm, an officer of the firm must also sign a letter indicating awareness and compliance with the Fund's ethics policy. 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. Transition managers are required to meet the requirements stated in the Fund's Brokerage 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 non-direct 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 Exhibit C. There are no managers excluded from our policy currently. 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? There were no transition managers utilized in In 2017, the Fund utilized Loop Capital, a MWBE firm, for a transition from Holland Capital to an index fund run by Northern Trust. There were no other transitions conducted in 2017 to date. 3. If you don t use a pool of transition managers, how do you determine which transition managers to utilize? The Policemen's Annuity and Benefit Fund of Chicago does have a pool of transition managers. A RFP was performed in late 2014 for Transition Management Services. After a thorough review of the responding firms' stability and general experience, key personnel, expertise client references, process, philosophy and style, and fees, the Board of Trustees, in January of 2015, added Loop Capital, Northern Trust and Penserra to the Fund's pool of transition managers. 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. fees paid to Loop Capital in 2017 were $14,576. 7

10 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. As noted above, the Fund conducted one transition and paid Loop Capital $14,576 in commissions in the transition (traded market value) was conducted by Loop Capital. No transitions occurred in IX. s 1. As of December 31, 2016 and March 31, 2017, what were the total amounts of the Fund s assets? As of December 31, 2016: $2,408,559,227. As of March 31, 2017: $2, 593,427, What is your average initial allocation to MBE firms in each of the listed asset classes since 2014? What is your average initial allocation to non-mbe firms in each of the listed asset classes since 2014: Domestic Equity, International Equity, Fixed Income, Hedge Fund, Real Estate, and Private Equity? Allocations since 2014 Domestic Equity: $0-MBE $90 million-non-mbe International Equity: $92 million-mbe $92 million Non-MBE Fixed Income: $90 million (incremental $50 million to existing relationship)-mbe $90 million Non-MBE $20 million Non-MBE (Direct lending) $20 million Non-MBE (Direct lending) $20 million Non-MBE (Opportunistic Credit) $20 million Non-MBE (Opportunistic Credit) $25 million Non-MBE (Fund of Secondary Credit Interests) $20 million Non-MBE (Flexible Corporate Capital) Hedge Funds $20 million MWBE $50 million Non-MBE Manager of Managers $20 million MWBE Infrastructure $50 million Non-MBE $25 million Non-MBE Real Estate 8

11 $10 million MWBE $10 million Non-MBE $15 million Non MBE Private Equity $25 million Non-MBE 3. What percent of assets were allocated to MWBE firms in searches not specifically designated for emerging managers? 2014 Fixed Income: LM Capital allocated $90 million/$650 million (14%) 2016 Hedge Funds: Pluscios Management LLC $20 million/$70 million (29%) 2017(assets have not yet been funded) Manager of Managers: BluePrint Capital Advisors $25 million/$25 million (100%) Real Estate Debt: Sound Mark Capital $10 million/$20 million (50%) NOTE: Searches for infrastructure, direct lending, opportunistic credit and cash management did not result in the appointment of an MWBE manager, although one appeared in the final in each case. 4. For 2016, please list [1] asset classes, [2] money managers, [3] the amount of assets managed in that asset class (in column [1]) per manager as of December 31, 2016, [4] the percentage of assets this represents in that asset class (in column [1]) as of December 31, 2016, and [5] the percentage of assets this represents in the overall Fund as of December 31, Please also list [6] the amount of fees paid per asset class (in column [1]) in 2016, [7] the percentage of fees paid to this manager [2] compared to fees paid by the Fund in this asset class (in column [1]) in 2016, [8] the percentage of fees paid to this manager [2] compared to fees paid by the overall Fund in 2015, and [9] the classification (i.e. African American, Latino, Asian American, Female) of the manager [2]. Please be sure to sort the table by Class [1] then Classification [9]. Sorted by Class Class[1] Alternative Equity Fixed Income Investment Manager Name [2] Amount of s Managed [3] Class [4] Fund [5] Amount of Fees Paid [6] Fees Paid as a Class [7] Fees Paid as a Fund [8] Ownership Classification [9] Muller & Monroe 14,276,201 5% 1% 545,357 7% 3% African American Newport Capital 1,636,630 1% 0% 74,354 1% 0% Disabled Veteran Pluscios 20,739,009 7% 1% 98,454 1% 1% Woman EARNEST Partners 87,679,044 7% 4% 753,922 13% 5% African American Holland Capital 90,970,165 8% 4% 201,747 3% 1% African American Denali Advisors 52,658,474 4% 2% 246,354 4% 2% Native American LM Capital 91,738,759 15% 4% 211,668 9% 1% Latino 9

12 Class[1] Sorted by Ownership Classification Investment Manager Name [2] Amount of s Managed [3] Class [4] Fund [5] Amount of Fees Paid [6] Fees Paid as a % of Class [7] Fees Paid as a Fund [8] Classification [9] Alternative Muller & Monroe 14,276,201 5% 1% 545,357 7% 3% African American Equity EARNEST Partners 87,679,044 7% 4% 753,922 13% 5% African American Equity Holland Capital 90,970,165 8% 4% 201,747 3% 1% African American Alternative Newport Capital 1,636,630 % 0% 74,354 1% 0% Disabled Veteran Fixed Income LM Capital 91,738,759 15% 4% 211,668 9% 1% Latino Equity Denali Advisors 52,658,474 4% 2% 246,354 4% 2% Native American Alternative Pluscios 20,739,009 7% 1% 98,454 1% 1% Woman Class[1] Alternative Equity Fixed Income 5. For 2017, please complete the following table as of March 31, Please list [1] the asset class, [2] the money manager, [3] the amount of assets managed in that asset class (in column [1]), [4] the percentage of assets this represents in that asset class (in column [1]), and [5] the percentage of assets this represents in the overall Fund. Please also list [6] the amount of fees paid per asset class (in column [1]), [7] the percentage of fees paid to this manager [2] compared to fees paid by the Fund in this asset class (in column [1]), [8] the percentage of fees paid to this manager [2] compared to fees paid by the overall Fund, and [9] the classification (e.g. African American, Latino, Asian American, Female) of the manager [2]. Please be sure to sort the table by Class [1] then Classification [9]. Sorted by Class Investment Manager Name [2] Amount of s Managed [3] Class [4] Fund [5] Amount of Fees Paid [6] Fees Paid as a Class [7] Fees Paid as a Fund [8] Classification [9] Muller & Monroe 8,575,789 2% 0% 191,900 9% 4% African American Newport Capital 615,444 0% 0% 10,500 0% 0% Disabled Veteran Pluscios 21,299,631 4% 1% 39,156 2% 1% Woman EARNEST Partners 97,916,355 8% 4% 203,338 9% 4% African American Holland Capital 98,760,684 8% 4% 95,512 4% 2% African American Denali Advisors 54,916,318 4% 2% 136,241 6% 3% Native American LM Capital 91,775,173 12% 4% 104,653 11% 2% Latino 10

13 Sorted by Ownership Classification Class[1] Alternative Equity Equity Alternative Fixed Income Equity Investment Manager Name [2] Muller & Monroe EARNEST Partners Holland Capital Newport Capital LM Capital Amount of s Managed [3] Class [4] Fund [5] Amount of Fees Paid [6] Fees Paid as a Class [7] Fees Paid as a Fund [8] 8,575,789 2% 0% 191,900 9% 4% 97,916,355 8% 4% 203,338 9% 4% 98,760,684 8% 4% 95,512 4% 2% 615,444 0% 0% 10,500 0% 0% Classification [9] African American African American African American Disabled Veteran 91,775,173 12% 4% 104,653 11% 2% Latino Denali Advisors Native 54,916,318 4% 2% 136,241 6% 3% American Alternative Pluscios 21,299,631 4% 1% 39,156 2% 1% Woman 11

14 6. Please complete the following table in the same manner as Question IX.2, for 2016, but exclusive of the manager of managers program. If your fund does not use a manager of managers program you may leave this table blank. Class Manager s Under Management Fees Paid Classification [1] [2] [3] $ in Class [4] Class [5] [6] $ in Class [7] Class [8] [9] 12

15 7. Please complete the following table in the same manner as Question IX.3, but exclusive of the manager of managers program. Please complete the table using information rendered through March 31, If your fund does not use a manager of managers program you may leave this table blank. Class Manager s Under Management Fees Paid Classification [1] [2] [3] $ in Class [4] Class [5] [6] $ in Class [7] Class [8] [9] 13

16 Complete the charts below to the best of your ability. If a chart does not apply to your Fund please leave it blank. Please complete and edit based on your asset allocation and fund. The categories are for guidance but should include strategies within each asset class in which your fund is invested for both the asset management and brokerage goals and actual utilization information. CHICAGO POLICEMEN S ANNUITY AND BENEFIT FUND Fund s as of December 31, 2015 $2,408,559,227 Fund s as of March 31, 2016 $2,593,427,279 MWD Manager Utilization Goal Large Cap Equity Equity Mid Cap Equity is Small Cap Equity 11%- 13% Global Equity International Equity Included in International Small Cap Equity Equity Emerging Markets Equity Fixed Income 3% - 5% Real Estate (Public and Private) Private Equity Hedge Funds Alternatives are Infrastructure 4% to 5% MWD Brokerage Goal Large Cap Equity Domestic Mid Cap Equity Equity is 35% Small Cap Equity Global Equity N/A International Equity International International Small Cap Equity Equity is 10% Emerging Markets Equity Emerging Markets Debt NA REITS/Real Estate (Public) 0% Fixed Income 25% Hedge Funds NA Composition of Board and Staff Minority/Female Trustees 4 of 8 African-American 2 of 8 Latino 1 of 8 Non-Minority Female 1 of 8 Investment Staff 1 of 1 African-American 0 of 1 Latino 0 of 1 Non-Minority Female 1 of 1 Consultant Staff 2 of 4 African-American 2 of 4 Latino 0 of 4 Non-Minority Female 0 of 4 Staff of Majority Owned Firms African-American Latino Non-Minority Female See Exhibit B 14

17 ASSET MANAGEMENT For Calendar Year 2016 s Managed by MWBE s Managed by MWBE African-American 9% Large Cap Equity 6% Latino (a) 4% Mid Cap Equity 0% Asian-American 0% Small Cap Equity 0% Female 1% Global Equity 0% Other 2% International Equity 0% fees paid to MWBE International Small Cap Equity 0% Emerging Markets Equity 4% African-American 9% Fixed Income 4% Latino (a) 1% Real Estate (Public and Private) 0% Asian-American 0% Private Equity 1% Female 1% Hedge Funds 1% Other 2% Infrastructure 0% assets managed by IL MWBE firms 5% fees paid to IL MWBE firms 6% Note: Percentages may not add to 100% due to Rounding As of March 31, 2017 s Managed by MWBE s Managed by MWBE African-American 8% Large Cap Equity 6% Latino (a) 4% Mid Cap Equity 0% Asian-American 0% Small Cap Equity 0% Female 1% Global Equity 0% Other 2% International Equity 0% fees paid to MWBE International Small Cap Equity 0% Emerging Markets Equity 4% African-American 10% Fixed Income 4% Latino (a) 2% Real Estate (Public and Private) 0% Asian-American 0% Private Equity 0% Female 1% Hedge Funds 1% Other 3% Infrastructure 0% assets managed by IL MWBE firms 5% fees paid to IL MWBE firms 6% Note: Percentages may not add to 100% due to Rounding 15

18 BROKERAGE DOMESTIC EQUITY (EXCLUDING REITS AND HEDGE FUNDS) commissions paid to MWBE firms in 2016 commissions paid to MWBE firms in as of March 31, 2017 $ % $ % African-American 164,068 37% African-American 143,699 37% Asian 0 0% Asian 0 0% Disabled 2,268 1% Disabled 32,064 8% Latino 13,642 3% Latino 7,644 2% Female 1,251 0% Female 17,031 4% 181,229 41% 200,438 51% commissions paid to IL MWBE firms in 2016 commissions paid to IL MWBE firms in as of March 31, 2017 $ % $ % IL Based 150,493 34% IL Based 122,596 32% INTERNATIONAL EQUITY (EXCLUDING REITS AND HEDGE FUNDS) commissions paid to MWBE firms in 2016 commissions paid to MWBE firms in as of March 31, 2017 $ % $ % African-American 57,077 10% African-American 47,020 13% Asian 0 0% Asian 0 0% Disabled 13,094 2% Disabled 19,388 5% Latino 6,057 1% Latino 11,117 3% Female 55,488 10% Female 11,057 3% 131,715 24% 88,582 24% commissions paid to IL MWBE firms in 2016 commissions paid to IL MWBE firms in as of March 31, 2017 $ % $ % IL Based 117,451 21% IL Based 65,672 18% FIXED INCOME (EXCLUDING REITS AND HEDGE FUNDS Volume Traded by MWBE firms in 2016 Volume Traded by MWBE firms in as of March 31, 2017 Volume % Volume % African-American 609,602,204 12% African-American 252,086,178 11% Asian 0 0% Asian 0 0% Disabled 650,156,729 13% Disabled 189,824,653 8% Latino 9,944,059 0% Latino 2,500,000 0% Female 0 0% Female 0 0% 1,269,702,992 25% 444,410,831 19% commissions paid to IL MWBE firms in 2016 commissions paid to IL MWBE firms in as of March 31, 2017 $ % $ % IL Based 588,277,513 12% IL Based 251,127,466 11% HEDGE FUNDS (ACROSS ALL PUBLICLY TRADED SECURITIES) NA 16

19 REITS commissions paid to MWBE firms in 2016 commissions paid to MWBE firms in as of March 31, 2017 Volume % Volume % African-American 4,191 36% African-American 1,464 27% Asian 0 0% Asian 0 0% Disabled 0 0% Disabled 0 0% Latino 0 0% Latino 0 0% Female 0 0% Female 0 0% 4,191 36% 1,464 27% commissions paid to IL MWBE firms in 2016 commissions paid to IL MWBE firms in as of March 31, 2017 $ % $ % IL Based 4,191 36% IL Based 1,464 9% OTHER (IDENTIFY ASSET CLASS) - N/A Exhibits Referenced in Response 17