Q Quarterly Earnings Call

Transcription

1 Q Quarterly Earnings Call The Past, Present and Future of Diversity in Asset Management Presented by City Treasurer Kurt Summers F E B R U A R Y 2 8, : 0 0 P M

2 BEFORE WE GET STARTED AUDIO Participants can hear the call through the computer or over the phone; you don t have to be on both to hear the presentation. You do need to be registered online to view the webcast. NEED HELP? If at any time during the call you need assistance, please call or or konstantinos.alonistiotis@cityofchicago.org QUESTIONS Have a question? At any time during the presentation, type in your question by clicking Q&A There will be time alotted for Q&A at the end of the call.

3 WELCOME & PURPOSE OF CALL Transparency This is the 9th Quarterly Earnings Call since the Treasurer took office. It is open to the public, the City Council and anyone interested in understanding the state of Chicago s finances. Outreach & Advocacy During the Treasurer s 77 visits to Chicago s 77 neighborhoods, residents voiced their need to be regularly engaged in our outreach and advocacy efforts. This is an opportunity to learn about our CTO initatives and legislation. Best Practices As the primary investment manager for the City of Chicago, the Treasurer seeks to be held as accountable as any other investment management firm is to their investors. This call is shaped after some reporting done by the nation s largest investment managers and public companies. Action This Quarterly Earnings Call for the City of Chicago is only one step in financial reporting and performance tracking of the City s investment portfolio. The call will provide an overview of the national economy as well as Chicago's current fiscal landscape and balance sheet and outline the economic impact of investing in our communities. 3

4 :00-12:05 Introduction, Purpose of Call, 12:05 12:10 National Economy :25 12:30 The Present: How Industry Experts are Challenging the Status Quo 12:30 12:35 The Future: What Now? 03 12:10-12:15 Chicago Economy 08 12:35 12:45 Our Fight Locally 04 12:15 12:20 CTO Investment Portfolio Update 09 12:45 12:50 CTO Initiatives 12:20 12:25 The Past: State of the Industry :50 1:00 Q&A 4

5 NATIONAL ECONOMY Unemployment (Adj.) GDP (% Change) Nov 2016 Dec 2016 Jan 2017 Q Q Q (adv.) 4.6% 4.7% 4.8% 1.4% 3.5% 1.9% IMF Expected Growth Rates Previous 2017 Forecast Updated 2017 Forecast Previous 2018 Forecast Updated 2018 Forecast Global Economy 3.4% 3.4% 3.6% 3.6% U.S. Economy 2.2% 2.3% 2.5% 2.2% Advanced Economies 1.8% 1.9% 1.8% 2.0% Emerging/ Developing Economies 4.6% 4.5% 4.8% 4.8% Sources: Bureau of Labor Statistics, Bureau of Economic Analysis, International Monetary Fund 5

6 :00-12:05 Introduction, Purpose of Call, 12:05 12:10 National Economy :25 12:30 The Present: How Industry Experts are Challenging the Status Quo 12:30 12:35 The Future: What Now? 03 12:10-12:15 Chicago Economy 08 12:35 12:45 Our Fight Locally 04 12:15 12:20 CTO Investment Portfolio Update 09 12:45 12:50 CTO Initiatives 12:20 12:25 The Past: State of the Industry :50 1:00 Q&A 6

7 CHICAGO ECONOMY Unemployment Q Q Q/Q (%) National 4.9% 4.7% -0.2% Chicago 5.4% 5.4% +0.0% Sources: Bureau of Labor Statistics, World Business Chicago 7

8 CHICAGO ECONOMY Sources: Illinois Association of Realtors 8

9 CHICAGO ECONOMY OVERVIEW Q4 Chicago s unique characteristics foster the foundation for continued economic growth across its diversified economic landscape Among Chicago s recent successes: Growing opportunities 24.7% YOY increase in Venture Capital Rounds as of January % YOY increase in private jobs 3.4% YOY increase in wages Burgeoning innovation 3.0% YOY increase in number of new patents as of January 2017 Global Transit Hub 14.0% YOY increase in air cargo tonnage routed through ORD and MDW as of January Source: World Business Chicago, PayScale 9

10 CHICAGO VC INVESTMENT STATUS Around $140 million was invested into Chicago area companies in Q4 2016, a significant decline compared to Q4 last year. However, YOY investments were comparable Source: World Business Chicago 10

11 :00-12:05 Introduction, Purpose of Call, 12:05 12:10 National Economy :25 12:30 The Present: How Industry Experts are Challenging the Status Quo 12:30 12:35 The Future: What Now? 03 12:10-12:15 Chicago Economy 08 12:35 12:45 Our Fight Locally 04 12:15 12:20 CTO Investment Portfolio Update 09 12:45 12:50 CTO Initiatives 12:20 12:25 The Past: State of the Industry :50 1:00 Q&A 11

12 CTO INVESTMENTS Q PORTFOLIO OVERVIEW (CONTINUED) Q Q Q Security Type Amount % Amount % Amount % Corporate Bonds $445,867, % $948,343, % $1,509,346, % Municipal Bonds $447,465, % $467,450, % $1,181,329, % Agency Bonds $4,162,989, % $2,024,921, % $1,706,630, % Commercial Paper $563,089, % $319,724, % $633,810, % Treasury Notes - 0.0% $19,837, % $20,000, % Certificate of Deposit $8,092, % - 0.0% - 0.0% Money Market Funds $314,791, % $1,525,285, % $1,499,261, % Cash $306,595, % $652,729, % $252,725, % Grand Total $6,248,891, % $5,958,292, % $6,803,102, Portfolio FY 2014 Earnings FY 2015 Earnings FY 2016 Earnings Operations Portfolio $14,444, $22,057, $61,100, Bond Proceed Portfolio $22,175, $21,149, $19,776, Reserves Portfolio $13,104, $14,660, $44,582, Total Portfolio $49,723, $57,867, $125,458, Chart Source: Chicago City Treasurer s Office 12

13 :00-12:05 Introduction, Purpose of Call, 12:05 12:10 National Economy :25 12:30 The Present: How Industry Experts are Challenging the Status Quo 12:30 12:35 The Future: What Now? 03 12:10-12:15 Chicago Economy 08 12:35 12:45 Our Fight Locally 04 12:15 12:20 CTO Investment Portfolio Update 09 12:45 12:50 CTO Initiatives 12:20 12:25 The Past: State of the Industry :50 1:00 Q&A 13

14 THE PAST: THE STATE OF THE INDUSTRY Graph Source: Russell Reynolds Associates (2014) 14

15 THE PAST: THE STATE OF THE INDUSTRY (CONT.) Chart Source: Russell Reynolds Associates, McKinsey. 15

16 :00-12:05 Introduction, Purpose of Call, 12:05 12:10 National Economy :25 12:30 The Present: How Industry Experts are Challenging the Status Quo 12:30 12:35 The Future: What Now? 03 12:10-12:15 Chicago Economy 08 12:35 12:45 Our Fight Locally 04 12:15 12:20 CTO Investment Portfolio Update 09 12:45 12:50 CTO Initiatives 12:20 12:25 The Past: State of the Industry :50 1:00 Q&A 16

17 THE PRESENT: HOW INDUSTRY EXPERTS ARE CHALLENGING THE STATUS QUO INFORMATION ON LENDING #s IN Les Bond, CEO, Attucks CHICAGO Asset Management OR NATIONALLY FOR With 28 years of investment WOMEN management AND POC experience COMPARED and TO 18 years as a successful entrepreneur, Mr. Bond WP is responsible for the overall management of Attucks as well as new product and business development. 17

18 :00-12:05 Introduction, Purpose of Call, 12:05 12:10 National Economy :25 12:30 The Present: How Industry Experts are Challenging the Status Quo 12:30 12:35 The Future: What Now? 03 12:10-12:15 Chicago Economy 08 12:35 12:45 Our Fight Locally 04 12:15 12:20 CTO Investment Portfolio Update 09 12:45 12:50 CTO Initiatives 12:20 12:25 The Past: State of the Industry :50 1:00 Q&A 18

19 THE FUTURE: WHAT NOW? INFORMATION ON LENDING #s IN CHICAGO OR NATIONALLY FOR WOMEN AND POC COMPARED TO Damien Dwin, co-ceo and WP co-founder of Brightwood Capital Advisors, LLC Damien Dwin is Co-CEO and Co-Founder of Brightwood. Damien has been involved in all phases of the firm s development since its founding in He is a member of the executive committee and serves on the investment committee of all Brightwood funds. 19

20 :00-12:05 Introduction, Purpose of Call, 12:05 12:10 National Economy :25 12:30 The Present: How Industry Experts are Challenging the Status Quo 12:30 12:35 The Future: What Now? 03 12:10-12:15 Chicago Economy 08 12:35 12:45 Our Fight Locally 04 12:15 12:20 CTO Investment Portfolio Update 09 12:45 12:50 CTO Initiatives 12:20 12:25 The Past: State of the Industry :50 1:00 Q&A 20

21 OUR FIGHT LOCALLY- THE CHICAGO COMMUNITY CATALYST FUND Description Impact Focus Funding Governance Chicago Community Catalyst Fund Invests renewable city dollars in neighborhood projects. Low to middle income communities in Chicago s 77 neighborhoods, specifically those meeting Community Reinvestment Act criteria. Long-term self-sustaining fund. Seeded with $100M for renewable use in neighborhood investments, with ability to grow fund overtime as Treasurer s Office exceeds investment targets and private investors join. Investment groups selected through RFP process overseen by Board of Directors, chaired by Treasurer, with CFO, Planning Commissioner and 4 mayoral appointments confirmed by Council. Advisory Board with 3 aldermen and 4 community members. Chart Source: Chicago City Treasurer s Office 21

22 OUR FIGHT LOCALLY- THE CHICAGO COMMUNITY CATALYST FUND (CONT.) The Chicago Community Catalyst Fund: will be launched with a 3-year, $100 million commitment from the City of Chicago. Year 1: $35M Year 2: $35M Year 3: $30M is structured to protect against conflicts of interest. The Fund77 investment board members will comprised of investment experts. The advisory board structure ensures investments are made with local knowledge and partnership. will be subject to stringent oversight by City Council and Chicago s taxpayers. serves a new and distinct function in Chicago s development ecosystem. investments will match the diversity of Chicago. Chart Source: Chicago City Treasurer s Office 22

23 OUR FIGHT LOCALLY- THE CHICAGO COMMUNITY CATALYST FUND (CONT.) $ + Outside $$ $ Chart Source: Chicago City Treasurer s Office 23

24 :00-12:05 Introduction, Purpose of Call, 12:05 12:10 National Economy :25 12:30 The Present: How Industry Experts are Challenging the Status Quo 12:30 12:35 The Future: What Now? 03 12:10-12:15 Chicago Economy 08 12:35 12:45 Our Fight Locally 04 12:15 12:20 CTO Investment Portfolio Update 09 12:45 12:50 CTO Initiatives 12:20 12:25 The Past: State of the Industry :50 1:00 Q&A 24

25 2017: INNOVATION & IMPLEMENTATION 5 DRIVING VALUE THROUGH ACTION TO CHICAGO S COMMUNITIES HOME BUYER ASSISTANCE PROGRAM CCCF/FUND77 BHM SCHOLARSHIP IMPACT A grant program for individuals who are buying a home or refinancing an existing mortgage within the City of Chicago IMPACT Investment vehicle focusing on Chicago s 77 neighborhoods (Approved on September 9 th, 2016 ) IMPACT 10 th Annual CTO Black History Month Essay Scholarship to support a Chicago Public School Senior 25

26 Home Buyer Assistance Program WHO QUALIFIES? Anyone who meets the income and credit score requirements is eligible for the program. There are two categories of loans available, each with their own requirements: FHA, VA, USDA Loans: Regardless of family size, the borrower s annual income must be $87,400 or less. As set by FHA, VA, or USDA guidelines, participants will generally need a minimum credit score of 580 to qualify. Fannie Mae/Freddie Mac Loans: Regardless of family size, the borrower s annual income must be $133,000 or less. As set by Fannie Mae/Freddie Mac guidelines, participants will generally need a minimum credit score of 640 to qualify. DO I NEED TO BE A FIRST-TIME HOME BUYER? HOW MUCH GRANT MONEY COULD I RECEIVE? No Qualified borrowers may receive a grant for up to 7% of the total loan amount based on income. For example, for a total loan amount of $250,000, a borrower could receive a grant of no more than $17,500 to cover down payment and closing costs. WILL I BE REQUIRED TO USE MY OWN FUNDS? Qualified borrowers will be required to contribute the lesser of $1,000 or 1% of home purchase price at the closing. CAN THIS PROGRAM HELP ME REFINANCE MY HOME? Yes, as long as there is no cash back to the borrower. To learn more about the Home Buyer Assistance Program and a complete list of approved lenders, please visit or 26

27 Home Buyer Assistance Program- Approved Lenders For a complete list of approved lenders, please visit 27

28 BLACK HISTORY MONTH COLLEGE SCHOLARSHIP WINNER- MALCOLM FOX Congrats to Malcolm Fox, the winner of $2,500 Black History Month Scholarship! Fox is a senior at Wendell Phillips Academy High School where he is ranked third in his class. This fall, he will be attending Wesleyan University where he will play football for the Wesleyan Cardinals and major in economics with a minor in data analysis. 28

29 :00-12:05 Introduction, Purpose of Call, 12:05 12:10 National Economy :25 12:30 The Present: How Industry Experts are Challenging the Status Quo 12:30 12:35 The Future: What Now? 03 12:10-12:15 Chicago Economy 08 12:35 12:45 Our Fight Locally 04 12:15 12:20 CTO Investment Portfolio Update 09 12:45 12:50 CTO Initiatives 12:20 12:25 The Past: State of the Industry :50 1:00 Q&A 29

30 Q&A 30

31 DEBRIEF AND CLOSING Follow Us Join a Think Tank Feedback Share Twitter:@kurtasummers Facebook.com/summerschicago Keep the conversation going in your neighborhood! bit.ly/77thinktanks Let us know what you thought about our call. us at city.treasurer@cityofchicago.org Invite friends and family to join our next call and stay engaged. VISIT US AT 31

32 Thank You For Joining 32

33 DISCLAIMER PLEASE NOTE: This presentation has not been prepared to give information for making decisions on buying or selling securities and should not be relied upon by investors in making investment decisions. With respect to any bonds, notes, or other debt issued by the City of Chicago, please refer for information only to the City s disclosure documents and continuing disclosure filings for such bonds, notes, or other debt obligations. 33