San Diego City Employees' Retirement System

The board meeting covered several key operational and administrative topics. Discussions included CEO succession planning, the approval of a contract for an executive search firm, and an audit committee report featuring the FY27 internal audit plan and various audit report results. Additionally, the disability committee reported on industrial disability retirement applications, and the business and governance committee reviewed staff recommendations regarding the action plan, retirement plan administration, and call center solutions. The investment committee also provided updates on commitments to European mid-market debt funds and infrastructure fund accounts.

The committee reviewed and approved the action plan for the fiscal year ending June 30, 2027, which includes a new objective focused on artificial intelligence governance. The committee discussed the necessity of establishing proper policy frameworks for AI implementation and explored the possibility of adding investment-related milestones to the plan. Additionally, the committee approved the execution of a third amendment agreement to administer the retirement plan for the Unified Port District to resolve past eligibility determination issues. Finally, the committee reviewed a proposal to enhance the call center solution through an AI-powered knowledge management system at a cost not to exceed $65,000.

The Disability Committee reviewed and approved several applications for industrial disability retirement, specifically for Carlos Amezcua, Thomas Bland, David Mullins, and Dalton Petrie. A proposal to waive a board rule regarding a non-industrial disability retirement application was removed from the agenda at the request of the applicant's family. Additionally, the committee considered and approved the industrial disability retirement application for Joel Ebstein, following a hearing officer's previous recommendation. Other agenda items included an overview of the disability process and a report on current disability statuses.

This document presents the FY2026 Annual Investment Plan for the Private Equity Investment Program, managed by GCM Grosvenor in partnership with the San Diego City Employees' Retirement System (SDCERS). The plan focuses on three key aspects: a disciplined Investment Strategy centered on high-quality, 'fewer, better investments' leveraging competitive advantages; strategic Investment Pacing informed by proprietary cash flow models to meet asset allocation targets and mitigate J-curve effects; and robust Risk Management through rigorous due diligence and diversified portfolio construction. Key investment themes for the next year include pursuing opportunistic investments in secondaries, seasoned primaries, and co-investments, exploring European market opportunities for enhanced diversification, and utilizing GCM's competitive advantages to achieve target objectives. The plan includes pacing analysis and projections extending through fiscal year 2030 to manage allocation targets and capitalize on market conditions.

The meeting included an update on the retirement system's progress and accomplishments. Key discussion topics included the implementation of actuarial financing methods for the trust fund, the strengthening of board governance through new committees and policies, and the publication of comprehensive annual financial reports. Additionally, the meeting addressed the establishment of a group trust, the resolution of IRS tax-compliance issues, improvements to member services, and updates on the investment portfolio performance. Furthermore, amendments to the Waterfall Ordinance were discussed, and policy changes regarding disability hearing procedures were reviewed.