ANNUAL INVESTMENT PLAN - OPERS...of 2019, subject to finding attractive opportunities, to achieve the new target allocation of 12%. Staff will focus on small to middle market private

2020ANNUAL INVESTMENT PLAN

Defined Benefit Fund Health Care 115 Trust Fund

Ohio Public Employees Retirement System

Ohio Public Employees Retirement System277 East Town Street, Columbus, Ohio 43215 | 1.800.222.7377 | www.opers.org

TABLE OF CONTENTS

Table of Contents

Chief Investment Officer’s Letter……………………………………………………………………...1

Executive Summary…………………………………………………………………………………….2

Defined Benefit Fund....………………………………………………………………………………. 4

Health Care Fund……………………………………………………………………………………….7

ASSET CLASS STRATEGIES………………………………………………………………………….10

Tactical Outlook……………………………………………………………………………………….10

Performance Expectations – Excess Return Targets……………………………………………..15

Public Equity…………………………………………………………………………………………...15

Fixed Income…………………………………………………………………………………………..15

Alternatives…………………………………………………………………………………………….16

Risk Parity……………………………………………………………………………………………...17

POLICIES, COMMITTEES AND RESOURCES…………………………………………………….18

OPERS Retirement Board Policies Governing Investment Activities…………………………...18

Staff Committee Structure……………………………………………………………………………19

Staffing…………………………………………………………………………………………………20

Organizational Structure and Staff Biographies…………………………………………………...25

EXECUTIVE SUMMARY

OPERS 2020 INVESTMENT PLAN Page 2

Executive Summary The following Summary outlines the strategies, asset allocation, and the asset class strategies for OPERS Defined Benefit and Health Care Funds. This Summary also includes initiatives and resources as well as performance and risk expectations. Fund Strategies The Defined Benefit Fund (“DB Fund”) will continue transitioning toward its strategic asset allocations as part of the Asset-Liability Study approved by the OPERS Retirement Board at the April 2019 meeting for the Defined Benefit Fund. Staff plans to complete DB Fund transitions by the end of January 2020. The Health Care Fund transitions were completed by the end of 2019. The following table outlines the projected base case returns with ranges for both the Defined Benefit and Health Care Funds. The base case 2020 Fund return expectations are slightly lower than 2019 for both the Defined Benefit and Health Care Funds largely due to lower expected returns for Public Equity and the Fixed Income Asset Classes.

*Source: 2020 NEPC Capital Market Expectations applied to OPERS Strategic Asset Allocation targets

The active returns shown above incorporate an information ratio of 0.40. This ratio measures the active return per unit of tracking error (active risk), which is a risk-adjusted return metric. Asset Allocation and Asset Class Strategies NEPC, OPERS Retirement Board retained Investment Advisor, has recommended no dynamic asset allocation changes for the year 2020. Staff will focus on reviewing the existing line-up of managers and portfolios and also in the context of internal versus external management. The Public Equity allocation in the Defined Benefit and Health Care Funds targets the market-

based global weighting between U.S. Equity and Non-U.S. Equity based on the MSCI All Country

World Index-Investable Market Index (“MSCI ACWI-IMI”). The current asset allocation targets for

U.S. Equity and Non-U.S. Equity are static in both the Defined Benefit and Health Care Funds.

(Refer to pages 4 and 7 for target allocations for the Defined Benefit and Health Care Funds,

respectively). Staff will be implementing strategies in the U.S. Equity sub-asset class by utilizing

a factor framework to improve the capital allocation and derive efficiency.

With regard to the Fixed Income allocation, Staff is reviewing the current mix of external

managers within the Emerging Markets Debt sub-asset class to achieve optimal allocation and

Base Case Return Active Tracking Information

Return* Range Return Error Ratio

2020 6.58 -7.17 to 20.33 0.38 0.95 0.40

2019 7.22 -6.53 to 20.97 0.42 1.05 0.40

2018 6.91 -6.69 to 20.51 0.42 1.05 0.40

2020 5.64 -6.86 to 18.14 0.26 0.66 0.40

2019 6.44 -6.06 to 18.94 0.31 0.78 0.40

2018 6.26 -6.14 to 18.66 0.31 0.78 0.40

Defined Benefit Fund

HC 115 Trust Fund

EXECUTIVE SUMMARY


maximize performance. Within the Core Fixed sub-asset class, a small portion will be allocated

to external managers to diversify the mandate.

Within the Alternatives asset class, the Private Equity commitment pace will be higher than that of 2019, subject to finding attractive opportunities, to achieve the new target allocation of 12%. Staff will focus on small to middle market private equity strategies in developed markets and will continue the build out a diversified co-investment program within the Defined Benefit Fund. In the Private Real Estate asset class, Staff will continue the strategy of seeking and exploiting underserved niches in the commercial real estate capital markets. The Hedge Funds sub-asset class is under review and will target lower correlation and low beta to the Public Equity asset class.

The Fund Management Committee will continue to monitor and manage the overall fund asset allocation, exposure management and liquidity reserves.

Initiatives

Each year the Investments Division undertakes significant initiatives to enhance the capabilities

and performance of the Funds. The completed 2019 strategic initiatives, the continuation of 2019

initiatives, and the new 2020 strategic initiatives are highlighted below.

2019 Completed Initiatives

• Implementation of the Defined Benefit Asset-Liability study strategic asset allocationrecommendations

• Implementation of the Health Care alignment with the Defined Benefit Fund assetallocation recommendations

• Completion of project Restock and optimization of the U.S. Equity sub-asset class

• Implementation of Blackrock Aladdin fixed income portfolio management system

2020 Initiatives

• Health Care Fund Asset-Liability Study

• Internal risk parity portfolio implementation, as part of the opportunistic sub-asset class

• Defined Contribution Plan program review

Resources

The Investments Division Staff is comprised of 67 budgeted positions with five positions currently vacant. Staff biographies are provided in the Appendix.

The Investments Division submitted an estimated compensation and operating budget of $18.6 million for 2020. The budget includes the Finance Division’s estimate of the 2020 incentive compensation payout, based on the prior year’s budget. The budget incorporates the Investments Division’s effort to maintain internal investment management, where appropriate, due to its material cost savings.

Staff estimates the total cost to manage the OPERS asset base at 59.9 basis points or $610.0 million. The cost assumes a long-term growth trend in the fund’s asset base, whereas an unanticipated bear market would reduce the cost.

FUND STRATEGIES



Expected Asset Growth – Defined Benefit Fund

The table below summarizes Staff’s estimate (base case) of market values and ranges for the Defined Benefit Fund at December 31, 2020. Pessimistic and optimistic cases are also provided for comparison purposes.

The anticipated market value of $91 billion for December 31, 2019 is derived by a smoothing projection from the actual market value as of November 30, 2019.

Asset Allocation – Defined Benefit Fund

The 2020 target asset allocation and ranges for the Defined Benefit Fund reflect an estimate by Staff of the expected progress to be made toward the strategic asset allocation targets. Also included are asset allocations for a comparable peer group as of June 2019 (refer to page 24).


2020 Expected Asset Growth

Pessimistic Base Optimistic

Case Case Case

12/31/19 Market Value ($ billions) $91.11 $91.11 $91.11

Expected Total Return -7.17% 6.58% 20.33%

Expected Investment Gain ($ billions) -$6.53 $6.00 $18.52

Expected Cash Flow ($ billions) -$3.60 -$3.60 -$3.60


Estimated Market Values, Returns and Cash Flows

12/31/2019 12/31/2020 Peer

Estimated Target Range Group

Public Equity 42.0% 41.9% 31% to 47% 49.25%

U.S. Equity 21.0% 20.9% 16% to 26% 31.14%

Non-U.S. Equity 21.0% 21.0% 16% to 26% 18.12%

Fixed Income 25.0% 25.0% 16% to 30% 26.07%

Core Fixed 10.9% 11.0% 7% to 13% 19.36%

Floating Rate Debt 0.1% 0.0% 0% to 2% 0.00%

Securitized Debt 1.0% 1.0% 0% to 2% 0.11%

TIPS 2.0% 2.0% 0% to 5% 2.15%

High Yield 2.0% 2.0% 1% to 3% 1.98%

Emerging Markets Debt 6.0% 6.0% 3% to 9% 2.30%

U.S. Treasury 3.0% 3.0% 0% to 2% 0.18%

Alternatives 28.0% 28.1% 22% to 40% 21.75%

Private Equity 10.0% 12.0% 5% to 15% 8.50%

Real Estate 10.0% 10.0% 5% to 15% 9.01%

Hedge Funds 7.0% 5.0% 4% to 12% 3.40%

Opportunistic 0.0% 0.1% 0% to 4% 0.00%

Commodities 1.0% 1.0% 0% to 2% 0.83%

Risk Parity 5.0% 5.0% 2% to 8% 0.52%

GTAA 0.0% 0.0% NA 1.15%

Other 1.25%

Defined Benefit Fund 100.0% 100.0% 100.00%

Asset Class

FUND STRATEGIES


*The asset allocations are derived from the organizations in the Peer Group Comparison sectionon page 25.

The above table shows an anticipated active management contribution of 38 basis points to the

Defined Benefit Fund’s return for 2020. The estimated tracking error of 95 basis points indicates

a 68% probability that the active return will be in a range of -57 basis points to +133 basis points.

This interval is calculated by subtracting the tracking error from, and adding the tracking error to,

the expected active return.

Return and Risk – Defined Benefit Fund

The performance objectives for the Defined Benefit Fund are to: (1) exceed the return of the Policy benchmark within an appropriately constrained risk framework, net of investment expenses: and (2) exceed the actuarial interest rate over a reasonably longer time horizon. The Policybenchmark combines designated market indices for asset classes, weighted by asset allocationtargets.

The return estimates in the following table were derived from the asset class return expectations developed by the OPERS Retirement Board’s retained Investment Advisor, NEPC. The single-point estimate return of 6.58% is comprised of an expected return of 6.20% from the policy mix and an additional contribution of 0.38% from active management, net of fees.

In the following table, Staff divides return and risk into two components.

Policy: The return and risk derived from the policy asset allocation and the intermediate term return and risk forecast of the underlying asset classes

Active: The return and risk associated with deviations from benchmark allocations at either the asset class level or portfolio level. It reflects the potential impact to relative performance from deviating from the asset class policy allocation targets, from asset class benchmark mismatches and from individual portfolio active risk

Active Return Active Return Target Tracking

Average Performance Performance Tracking Error Target

Allocation Objectives Contribution Error Range Information

(%) (bps) (bps) (bps) (bps) Ratio

U.S. Equity 20.9% 12 3 30 0-100 0.40

Non-U.S. Equity 21.0% 60 13 150 0-300 0.40

Fixed Income 25.0% 17 4 50 0-200 0.34

Alternatives 28.1% 64 18 500 250-750 0.13

Risk Parity 5.0% 0 0 0 0-200 NA

Defined Benefit Fund 100.0% NA 38 95 0-300 0.40

Schedule of Expected Performance and Volatility

FUND STRATEGIES


The Policy Return and Active Return are calculated as weighted average of expected returns and expected alphas of each sub-asset class.

Asset Classes Pessimistic Base Optimistic

Public Equity -11.92% 6.54% 25.00%

U.S. Equity -11.88% 5.27% 22.42%

Non-U.S. Equity -14.28% 7.44% 29.16%

Fixed Income -3.08% 3.32% 9.72%

Core Fixed -3.50% 2.51% 8.52%

Emerging Markets Debt -7.59% 4.81% 17.21%

Securitized Debt -8.35% 4.15% 16.65%

High Yield -8.35% 4.15% 16.65%

TIPS -4.31% 2.19% 8.69%

U.S. Treasury -3.59% 1.91% 7.41%

Alternatives -7.66% 7.30% 22.26%

Private Equity -15.21% 9.37% 33.95%

Real Estate -9.02% 5.88% 20.78%

Hedge Funds -2.72% 5.00% 12.72%

Opportunistic -11.52% 4.98% 21.48%

Commodities -15.04% 3.96% 22.96%

Risk Parity -10.42% 5.88% 22.18%

Policy Return -7.16% 6.20% 19.56%

Sources of Return Pessimistic Base Optimistic

Policy -7.16% 6.20% 19.56%

Active -0.57% 0.38% 1.33%

Total Return -7.17% 6.58% 20.33%

Sources of Variability Information Sharpe

Risk Risk Ratio Ratio*

Policy 13.36% 0.33

Active 0.95% 0.40

Total Risk 13.75% 0.35

*The Sharpe Ratio reflects 1.8% (10 year Cash Return) as the risk free rate.

2020 Total Return Assumptions

2020 Total Risk and Active Risk Assumptions

2020 Policy Return Assumptions

FUND STRATEGIES


Health Care Fund

Expected Asset Growth – Health Care Fund

The table below summarizes Staff’s estimate (base case) of market values and ranges for the Health Care Fund at December 31, 2020. Pessimistic and optimistic cases are also provided for comparison purposes.

The anticipated market value of $12 billion for December 31, 2019 is derived by a smoothing projection from the actual market value as of November 30, 2019.

Asset Allocation – Health Care Fund

The 2020 target asset allocation and ranges for the Health Care Fund reflect an estimate by Staff of the expected progress to be made toward the strategic asset allocation targets, which are shown below. There is no peer universe of public pension plans with separate health care funds.

Health Care 115 Trust Fund

2020 Expected Asset Growth

Pessimistic Base Optimistic

Case Case Case


Expected Total Return -6.86% 5.64% 18.14%

Expected Investment Gain ($ billions) -$0.88 $0.72 $2.31

Expected Cash Flow ($ billions) -$1.32 -$1.32 -$1.32


Estimated Market Values, Returns and Cash Flows

12/31/2019 12/31/2020

Estimated Target Range

Public Equity 46.0% 45.9% 34% to 52%

U.S. Equity 23.0% 22.9% 18% to 28%

Non-U.S. Equity 23.0% 23.0% 18% to 28%

Fixed Income 36.0% 36.0% 24% to 44%

Core Fixed 17.9% 18.0% 11% to 21%

Floating Rate Debt 0.1% 0.0% 0% to 2%

Securitized Debt 1.0% 1.0% 0% to 2%

TIPS 6.0% 6.0% 3% to 9%

High Yield 2.0% 2.0% 0% to 5%

Emerging Markets Debt 6.0% 6.0% 3% to 11%

U.S. Treasury 3.0% 3.0% 0% to 2%

Alternatives 13.0% 13.1% 11% to 21%

REITs 6.0% 6.0% 3% to 9%

Hedge Funds 5.0% 5.0% 3% to 9%

Opportunistic 0.0% 0.1% 0% to 4%

Commodities 2.0% 2.0% 0% to 4%

Risk Parity 5.0% 5.0% 2% to 8%

HC 115 Trust Fund 100.0% 100.0%

Asset Class

FUND STRATEGIES


The above table shows an anticipated active management contribution of 26 basis points to the Health Care Fund’s return for 2020. The estimated tracking error of 66 basis points indicates a 68% probability that the active return will be in a range of -40 basis points to +92 basis points. This interval is calculated by subtracting the tracking error from, and adding the tracking error to, the expected active return.

Return and Risk – Health Care Fund

The performance objective for the Health Care Fund is to exceed the return of the Policy benchmark within an appropriately constrained risk framework, net of investment expenses. The Policy benchmark combines designated market indices for asset classes, weighted by asset allocation targets.

The return estimates in the following table below were derived from the asset class return expectations developed by the OPERS Retirement Board’s retained Investment Advisor, NEPC. The single-point estimate return of 5.64% is comprised of an expected return of 5.38% from the policy mix and an additional contribution of 0.26% from active management, net of fees.

In the following table, Staff divides return and risk into two components.

Policy: The return and risk derived from the policy asset allocation and the intermediate term return and risk forecast of the underlying asset classes.

Active: The return and risk associated with deviations from benchmark allocations at either the asset class level or portfolio level. It reflects the potential impact to relative performance from deviating from the asset class policy allocation targets, from asset class benchmark mismatches and from individual portfolio active risk.

Active Return Active Return Target Tracking

Average Performance Performance Tracking Error Target

Allocation Objectives Contribution Error Range Information

(%) (bps) (bps) (bps) (bps) Ratio

U.S. Equity 22.9% 12 3 30 0-100 0.40

Non-U.S. Equity 23.0% 60 14 150 0-300 0.40

Fixed Income 36.0% 18 6 50 0-200 0.36

Alternatives 13.1% 22 3 300 200-400 0.07

Risk Parity 5.0% 0 0 100 0-200 NA

HC 115 Trust Fund 100.0% NA 26 66 0-300 0.40

Schedule of Expected Performance and Volatility

FUND STRATEGIES


The Policy Return and Active Return are calculated as the weighted average of expected returns or expected alphas of each sub-asset class.

Asset Classes Pessimistic Base Optimistic

Public Equity -11.92% 6.54% 25.00%

U.S. Equity -11.88% 5.27% 22.42%

Non-U.S. Equity -14.28% 7.44% 29.16%

Fixed Income -2.89% 3.06% 9.01%

Core Fixed -3.50% 2.51% 8.52%

Emerging Markets Debt -7.59% 4.81% 17.21%

Securitized Debt -8.35% 4.15% 16.65%

High Yield -8.35% 4.15% 16.65%

TIPS -4.31% 2.19% 8.69%

U.S. Treasury -3.59% 1.91% 7.41%

Alternatives -6.74% 5.64% 18.02%

REITs -14.58% 5.42% 25.42%

Hedge Funds -2.72% 5.00% 12.72%

Opportunistic -11.52% 4.98% 21.48%

Commodities -15.04% 3.96% 22.96%

Risk Parity -10.42% 5.88% 22.18%

Policy Return -6.08% 5.38% 16.84%

Sources of Return Pessimistic Base Optimistic

Policy -6.08% 5.38% 16.84%

Active -0.40% 0.26% 0.92%

Total Return -6.86% 5.64% 18.14%

Sources of Variability Information Sharpe

Risk Risk Ratio Ratio*

Policy 11.46% 0.31

Active 0.66% 0.40

Total Risk 12.50% 0.31

*The Sharpe Ratio reflects 1.8% (10 year Cash Return) as the risk free rate.

2020 Policy Return Assumptions

2020 Total Return Assumptions

2020 Total Risk and Risk Attribution Assumptions

ASSET CLASS STRATEGIES



Tactical Outlook

The following tactical outlook provides a background and context for the asset class strategies for the Defined Benefit and Health Care Funds. The following are overviews of the two components of the tactical outlook: the capital markets observations and the asset class outlook. The Investment Advisors (NEPC and AHIC), retained by the OPERS Retirement Board, provided these outlooks for 2020. Capital Markets Observations

• Key Market Themes o Late cycle does not mean end of cycle, as there is minimal evidence in

economic/financial indicators to suggest that a U.S. recession is imminent. ▪ Historically, equity markets can offer strong returns in a late-cycle market

environment and abandoning risk assets early may detract from long-term results.

o We continue to believe that a U.S. recession is not imminent. However, negative trends in the manufacturing sector and brief inversions of the yield curve cloud the economic outlook.

▪ U.S.-China trade relations have clearly influenced market sentiment and the concerning yield curve signals, while also dampening global manufacturing activity. The U.S. consumer remains the driving economic force and we have yet to see a shift in consumer behavior. Our view is that we are likely to remain in a late-cycle market environment and this cycle can hold for a longer period than the historical average would suggest.

o Investors underestimated the ability of global markets to absorb the reduction of the Fed’s balance sheet and a rate hike cycle.

▪ More importantly, the Fed demonstrated an unwillingness to persevere through moderate levels of market turmoil and will adjust policy based on market sentiment.

o U.S.-China trade tensions are a full expression of our backlash theme and the UK serves as live case study.

▪ We continue to see a positive investment opportunity in the emerging markets, but U.S.-China trade relations are having a material negative impact on investor sentiment. We do not anticipate the trade dispute to escalate beyond tariff levies and prohibit the flow of goods and services, but U.S.-China relations are a tail-risk for the global economy

o China “transition” may conflict with U.S. geopolitical interests and risks a zero-sum dynamic of economic competition between the U.S. and China.

▪ Tariffs and trade conflict are a form of “Thucydides Trap”, where a rising power causes fear in an established power.

o Globalization Backlash is a long-term trend as populist movements lead to shifts away from political/economic orthodoxy, heightening tail risks.

▪ Levying tariffs is a dangerous game as both the U.S. and China look to negotiate but the tit-for-tat tariff escalation with China is a concern for market sentiment.



Market Outlook

• U.S. and Non-U.S. Equities o Look to rebalance developed market equities following a strong 2019. o We encourage investors to reduce overweight exposure that may exist to

non-US developed equities. ▪ We are biased to a structural overweight to international small-cap due to

the manager universe alpha opportunity. o Emerging equities offer a compelling return potential for investors.

▪ Modestly increasing overweights to emerging markets may be appropriate for investors with the risk tolerance and tracking error tolerance.

• Fixed Income o Credit selection in fixed income will be imperative in 2020 and beyond.

▪ Overall credit quality deterioration is a concern with covenant-lite issuance growing.

▪ Default rates likely to remain low but recoveries may be lower relative to previous cycles.

o Deflation remains a growing concern across government bond markets. ▪ Weaker global economic conditions and trade tensions have pushed

interest rates lower. o Emerging market local currency debt remains attractive.

▪ We view EMD Blended as a structural allocation, and EMD Local as a more tactical recommendation for those with a higher risk tolerance.

• Real Assets o Within the real asset space, we expect a moderation in real estate and a

slowing of future asset appreciation. ▪ Energy markets remain challenged as commodity price volatility and

negative investor sentiment continue to be headwinds.

• Hedge Fund o Looking forward we believe that the environment for hedge funds continues to

support improving absolute returns and, similar to last year, we continue to believe that investors should prefer the more diversifying strategies in the space.

o Macro, alternative risk premia, and niche credit strategies look like good additions to investors’ portfolios. Strategies with higher correlations to conventional markets, such as long-short equity and some event driven strategies, look less attractive at this point in the cycle.

o Diversifying strategies are worthwhile in the long run but they don’t always add value year to year. Most investors think of 10 years as “the long term” as that has generally been long enough to include at least one complete economic cycle. But looking at a graph of 10-year holding period returns leads to a different conclusion.

o The graph below shows the annualized 10-year return for stocks and hedge funds. The most important take-away is how variable the 10-year returns can be.

▪ A 10-year investment in the S&P 500 starting at the end of February 1999 lost -5.1% annualized. But a stock position initiated at the end of August 1990 and held for 10 years generated a 16.8% annualized gain.

▪ Even with a 10-year holding period, total returns can vary quite widely. ▪ Hedge funds have a much shorter history but their range of 10-year returns

is also large, ranging from +2.9% to +19.1% annualized.



o Looking forward into 2020 we believe that investors should think of hedge funds as diversifiers with a target correlation of zero to other growth assets, not as a market hedge. Hedge funds can enhance the returns of a growth portfolio by tapping into drivers that are different from the ones that power the stock market. In doing this they also provide risk diversification.

o We expect both the risk diversification and the return enhancement of hedge funds to be more successful going forward in 2020 than they have been in the recent past. But maintaining an appropriately long-time horizon is important in all asset classes across the investment universe.

• Private Equity o 2020’s private equity (PE) market activity is expected to remain relatively constant

after having declined in 2019 from the peak levels experienced in 2018. New investment activity is expected to be difficult due to signs of overheating in several areas of the industry:

▪ Purchase price multiples for new investments are at all-time highs and are expected to continue to be fueled by easy credit and an abundance of dry powder (capital committed but not yet drawn down). Creating value at these pricing levels is difficult.

▪ Deals completed after the Global Financial Crisis (GFC) are now maturing and being exited. While deals completed post GFC have typically been held longer as the high purchase price multiples at which they originated require greater operational changes to drive value, these deals are now maturing and providing a supply of exits (albeit at a lower level than the 2015 exit volume peak).

▪ Total PE fundraising in 2020 is expected to fall from the high levels of the last 3 years; dry powder has reached a new peak of $1.4 trillion almost twice the level in 2015.

▪ While allocations to PE have generally been increasing amongst institutional investors, the combination of a slowdown in exit activity since 2015 and continued new investments has caused many investors to surpass their target allocations to PE.



▪ Managers with strong track records will continue to raise larger funds,often with only one close. Appetite for the best-performing funds is high,potentially pushing those managers to raise too much capital.

o Capital markets are robust with high valuations and high availability of debt.▪ Purchase prices have reached a new peak of 12.0X EBITDA.▪ Debt continues to be broadly available at very borrower-friendly terms

hovering at peak leverage levels of 5.8x EBITDA for the last 3years. There are no indications this trend will slow. If interest ratesincrease, we could see a slowdown, but do not expect much of anincrease in defaults as many financing packages were completed withlittle to no debt covenants.

o U.S. GDP growth slowed in 2019 and is projected to slow further in 2020 (2%)and 2021 (1.9%). Europe overall is at a slower rate with little to point to as acatalyst for near-term increased growth. Asia is mixed depending on the region,but overall expected to show stronger growth of ~5.5%.

o We believe 2020 is a year to be judicious and selectively invest only in promisingmanagers / strategies. Even in downturns, top-performing managers generatesolid returns. There are pockets of attractive investment strategies within allsectors of private equity.

▪ We favor investment in all sectors over multiple vintage years in order toavoid overexposure to any one strategy or economic cycle as one cannottime the market and good funds are raised in all vintage years. It may beprudent to temper allocations to secondaries, mezzanine strategies,mega cap markets and venture (especially late stage).

▪ As always, manager selection will be the key to generating the bestreturns with a current focus on choosing managers with strongoperational capabilities and high levels of valuation discipline on newdeals.

• Real Estateo Capital markets and real estate fundamentals continue to support investment in

real estate, although expected returns are moderating.o Given the length of the current market cycle, we recommend focus upon quality

overall, as well as specific strategies that capture macro trends driving demand for space.

o Capital market conditions for real estate: After increasing in 2018, interest rates declined globally during 2019. Central Banks generally maintained accommodative monetary policy. Capital flows to real estate investment continued to be robust. As a result, real estate pricing remains high and investors continue to capitulate to lower going in yields on new property purchases. On a relative basis, however, real estate yields continue to look attractive given declining yields from “risk-free” government bonds. The foregoing conditions continue to cause expected returns from real estate to moderate.

o Real estate market fundamentals remain healthy. Benchmark indices show high occupancies among institutional grade real estate (above 90% for all major sectors). Meanwhile, net operating income is growing at a healthy rate near 5%per year (above long-term averages), with income growth in thewarehouse/logistics sector excelling to 8% per year. However, rent growth in the traditional retail sector remains flat. New supply is increasing across major property types (except retail malls and stores), which is making it harder for



operators to raise rents and grow income. At the same time, construction costs are increasing, which disciplines new supply under moderating rent growth.

o Investment themes in real estate: Two macro trends dominate discussion of real estate performance.

o The first is e-commerce and the ongoing evolution in the distribution of consumer retail goods.

o E-commerce sales continue to grow at double digit rates year-over-year and bolster demand for modern logistics warehouses and infill logistics assets.

o The rush to one-day and same-day fulfillment capabilities is driving demand for infill distribution nodes in proximity to densely populated areas.

o Thus, the logistics/warehouse sector remains very strong, in many cases at the expense of the traditional retail sector, where store-closures continue at a high pace.

o From a performance perspective, investment expectations are diverging substantially: PREA consensus return expectations for industrial (11.7%) are nearly 9% higher than retail (2.8%)

o The second dominant macro trend captures two demographic shifts: the migration of population toward Sunbelt markets, and the distribution of population across age cohorts.

o The Southern migration, together with the ascendant impact of the millennial generation, both benefit the apartment sector. Home affordability remains out of reach for many millennials, especially in major gateway markets.

o At the same time, millennials are aging into a shifting preference for suburbs as they seek to start families and settle down. Affordability is pushing them toward suburban rental properties.

o Apartment markets remain tight nationally, with vacancy rates below 6%. When combined with recent wage growth, conditions are good for modest increase in apartment rents, especially in many Southern markets exhibiting higher population and economic growth.

o Meanwhile, the baby boomer generation continues to shape demand in certain specialty sectors. The senior population growth rate in the U.S. will continue to remain elevated for the coming years, providing a very attractive demand tailwind for senior housing and medical office. In the near term, however, higher levels of new construction in the senior housing sector will suppress occupancy and rent growth.



Performance Expectations – Excess Return Targets

Public Equity

The following table shows the benchmarks and performance objectives for the Public Equity asset class. The benchmark for the U.S. Equity asset class is the Russell 3000 Index with an alpha target of 12 basis points, net of fees. The tracking error target is 30 basis points with a range of 0 to 100 basis points. The performance objective and target tracking error for Non-U.S. Equity are 60 basis points and 150 basis points, respectively.

The custom benchmark for Non-U.S. Equity is composed of 55% MSCI World Index ex U.S. Standard Index; 10% MSCI World Index ex U.S. Small Cap Index; 31% MSCI Emerging Markets Standard Index; and 4% MSCI Emerging Markets Small Cap Index. This structure reflects a strategic overweight to Emerging Markets compared to the Emerging Markets allocation of the MSCI All Country World Index ex U.S. Investable Markets Index (“MSCI ACWI ex U.S. IMI”).

Fixed Income

The following table shows the benchmarks and performance objectives for the Fixed Income asset class.

**50% JP Morgan Emerging Markets Bond Index Global & 50% JP Morgan Government Bond Index-

Emerging Markets Global Diversified

***50% Bloomberg Barclays Non-Agency Investment Grade CMBS: BBB Total Return Index Unhedged

USD & 50% Bloomberg Barclays Non-Agency CMBS Agg Eligible Total Return Index Value Unhedged

USD.

Alpha Target

Target Tracking Target

(net of fees) Error Information

Benchmark (bps) (bps)* Ratio

U.S. Equity Russell 3000 12 30 0.40

Non-U.S. Equity Custom Benchmark 60 150 0.40

* The tracking error ranges for U.S. Equity and Non-U.S. Equity are 20 - 100 bps and 80 - 300 bps, respectively.

Public Equity Asset ClassAlpha Target and Target Tracking Error

Alpha Target



Benchmark (bps) (bps) Ratio

Core Fixed Bloomberg Barclays Aggregate 30 75 0.40

Emerging Markets Debt EMD Custom Benchmark** 46 230 0.20

Securitized Debt Securitized Debt Custom Benchmark*** 80 200 0.40

High Yield Bloomberg Barclays U.S. High Yield 20 100 0.20

TIPS Bloomberg Barclays TIPS 0 15 NA

U.S. Treasury Bloomberg Barclays U.S. Treasury 0 30 NA

Alpha Target and Target Tracking Error

Fixed Income Asset Class



Securities Lending

In the securities lending program, Staff utilizes lending agents to maximize lending revenue. Staff strives to hire agents who provide competitive fee splits, while providing adequate risk controls and expertise in the asset class being loaned. There is a bias toward lending assets in an auction environment, so borrowers are providing maximum revenue in a competitive environment on a regular basis. Staff will continue lending the U.S. Treasury and Agency assets in-house. This effort has increased revenues from U.S. Treasury lending. The collateral from the securities lending program is managed internally. The combination of lending revenue and investment income comprise the total securities lending performance.

Cash Management

The cash portfolios are managed with a low-to-moderate risk profile that results in principal preservation while exceeding the performance of the respective benchmarks. The benchmark for the OPERS Short Term Investment Funds (“STIF”) is the Merrill Lynch 3-month Treasury Bill Index. The benchmark for the Securities Lending STIF is the Overnight Bank Funding Rate.

Alternatives

The Alternatives asset class is composed of Private Equity, Real Estate, Hedge Funds, Opportunistic, REITs, and Commodities investment strategies. The Defined Benefit and Health Care Funds invest differently in the Alternatives asset class to meet their unique investment objectives. The following table summarizes the benchmark, performance objectives and tracking error for the various alternative investment strategies utilized within the Fund.

* HFRI single strategy indices weighted by the target allocations listed in the table below

** Market value weight of the underlying benchmarks

Alpha Target



Benchmark (bps) (bps) Ratio

Private Equity State Street Private Equity Index 100 700 0.14

Real Estate Net NFI-ODCE + 0.85% 30 700 0.04

Hedge Funds Custom Benchmark* 50 400 0.13

Opportunistic Custom Benchmark** 0 40 0.40

REITs DJ U.S. Select RESI 0 10 NA

Commodities S&P GSCITR Index 36 90 0.40

Alternatives Asset ClassAlpha Target and Target Tracking Error



Hedge Funds

Strategy Allocation Target and Ranges for 2020. These new targets were approved at the

August 2019 Board Meeting.

Opportunistic

The Opportunistic sub-asset class is intended to permit investments in assets or strategies not presently contemplated in the respective Defined Benefit or Health Care Funds. In this regard, assets or strategies used in the Opportunistic sub-asset class must have the potential to be mainstreamed into OPERS investment program over time or be opportunistic based on either valuation or circumstance. Strategies are developed based on their individual merit and circumstances and are assessed as to their scalability and feasibility for a potentially larger allocation. The maximum size for any single benchmarked strategy is 0.5% of the total fund.

Staff plans to create a new internal risk parity portfolio, with an initial volatility target of 8% and maximum leverage of 1.5x. This portfolio will be part of the Opportunistic sub-asset class with an expected start date in March 2020.

Risk Parity

Risk parity is an alternative approach to investment portfolio management, which focuses on allocation of risk rather than allocation of capital. The risk parity approach asserts that when asset allocations are adjusted to the same risk level, the risk parity portfolio can achieve a higher Sharpe ratio and can be more resistant to market downturns than the traditional portfolio.

The performance benchmark for the Risk Parity asset class is the HFR Institutional Risk Parity 15 Volatility Index and managed as a passive allocation.

http://en.wikipedia.org/wiki/Sharpe_ratio

http://en.wikipedia.org/wiki/Sharpe_ratio

POLICIES, COMMITTEES, AND RESOURCES



OPERS Retirement Board Policies Governing Investment Activities

The following exhibit illustrates the structure and relationship of the Policies within the OPERS System and its two investment Funds.

Broker - Dealer Policy Corporate Governance & Proxy Voting Guidelines

Derivatives Policy External Investment Managers’ Insurance Policy

Iran and Sudan Divestment Policy Material Nonpublic Information Policy

Defined Contribution Fund Policy

Ohio-Qualified & Minority-Owned Manager Policy Personal Trading Policy

Responsible Contractor Policy Securities Lending Policy

Soft Dollar Policy OFAC Policy

Leverage Policy Liquidity Policy

INVESTMENT-WIDE POLICIES

Cash Policy Commodities Policy Hedge Funds Policy Opportunistic Policy

Public Equity Policy Fixed Income Policy Private Equity Policy

Real Estate Policy Risk Parity Policy

ASSET/SUB-ASSET CLASS POLICIES

OPERS FUNDS

FUND POLICIES

HEALTH CARE FUND

Investment

Objectives and Asset Allocation Policy

DEFINED BENEFIT FUND

Investment

Objectives and Asset Allocation Policy



Staff Committee Structure

The Chief Investment Officer (“CIO”) utilizes a variety of committees, working groups and meeting structures to govern the Investment Division’s activities. This internal governance arrangement enhances collective inputs, retains institutional knowledge, provides documentation of the due diligence process and other processes, promotes transparency and accountability, and formalizes decision-making processes. These committees are designed to combine structure and flexibility to efficiently bring the appropriate decision makers together on a timely basis and maintain a controlled environment to minimize operational risk.

The following provides an outline of the Investment related committees.

Committee/Meeting Purpose and Description

Investment Committees Approvals and Decisions

Broker Review* Monitor/Approve and Evaluate Brokers, Complete ORSC Reports

Counterparty* Set Counterparty Limits and Monitor Counterparty Exposures

DC Funds Staff Investments Committee* Review/Monitor Defined Contribution Fund's Allocation and

Rebalancing Activities

Fund Management* Implement Asset Allocation and Investment Strategies, Cash

Forecasting, Fund and Portfolio Exposure Metrics, and Set

Quarterly Fund Target Benchmark Allocations During Transition,

Liquidity Management

Operational Risk* Identify and Monitor Operational Risks

Investment Meetings External Portfolio Management

Review RE Opportunities for CIO Approval

GEC - Global Equity Committee*

GFIC - Global Fixed Income Committee*

PMAC - Public Market Alternative Committee* Real Estate*

Private Equity Committee*Review PE Opportunities for CIO Approval

Investment Meetings Internal Portfolio Management

Active Equity Sector Reviews/Outlooks, Portfolio Composition and Risk

Management

Global Bonds Sector Reviews/Outlooks, Portfolio Composition and Risk

Management

Derivatives Portfolios Review Markets, Strategies, and Internally Managed Index

Portfolios

Transition Management Transition Assets between Managers and Conduct Rebalancing

Internal Equity Index/Tilt Strategy and Tactics

Portfolio Progress Meeting New Portfolio - Planning and Implementation

Non-Investment Division Committees Committees with Investment Staff Involvement

Iran/Sudan Divestiture* Leadership Team*

Corporate Governance*

* Committee has charter and maintains minutes

Review External Public Managers and Manager Searches for

CIO Approval



Staffing

Recruiting and retaining the best and most talented Staff is a critical priority for the Investments Division. The following table shows the anticipated full staffing for 2020.

Staffing Costs Assuming full staffing levels in 2020, the chart below details the estimated $18.62 million of salaries, benefits, and incentive compensation for the Investments Division. This represents approximately 1.83 basis points of cost, an increase of 0.02 basis points from the 2019 projection due to higher staffing levels (less vacancies) expected in 2020.

Operating Budget The Investments Division’s 2020 operating budget (excluding compensation) is $11.04 million. This operating budget reflects a decrease of $0.51 million, or 4.4% percent, from the 2019 budget and, as a percentage of assets, is 1.09 basis points as compared to 1.25 basis points in 2019.

Office Total

of the Fund Risk Internal External Invest.

CIO Mgmt. Mgmt. Funds Funds Division

2020 Investment Plan Projected Staffing 5 5 5 36 16 67

Current Staffing 3 5 4 34 16 62

Vacant Positions - To be filled in 2020 2 0 1 2 0 5

Year End 2020 Target Staffing 5 5 5 36 16 67

Target Staffing for Year End 2020

Position Vacant

Internal Management Deputy CIO - Office of CIO 1

Internal Management Associate Analyst - Quantitative Research 1

Internal Management Senior Op Investment Analyst - Risk Management 1

Internal Management Investment Analyst - Cash Management 1

Internal Management Senior Investment Analyst - Active Equity 1

Total 5

Current Open and Budgeted Positions

Office 2020 2019

of the Internal External Projected Projected

CIO Mgmt. Mgmt. Total Total

Salaries $1.47 $6.31 $2.31 $10.08 $9.92

Benefits $0.74 $3.13 $1.20 $5.07 $4.99

Incentive Compensation $0.52 $1.93 $1.02 $3.46 $3.46

Total Compensation $2.73 $11.37 $4.53 $18.62 $18.37

Average Assets ($ billions) $101.67 $43.05 $58.62 $101.67 $101.35

Compensation (Basis Points) 0.27 2.64 0.77 1.83 1.81

Estimated 2020 Total Compensation Costs

($ millions)



Management Cost

The expected annual external management fees by asset class for the Investments Division are in the table below. The estimate of fees is based on the projected average market value for the Defined Benefit and Health Care Funds, as shown by sub-asset class in the average asset’s column below. (See next Page)

Total

Internal External Invest.

Mgmt. Mgmt. Division

2019 Operating Budget $9.01 $2.54 $11.55

2020 Operating Budget $8.59 $2.45 $11.04

Percent Change -4.7% -3.5% -4.4%

Percent of Total 77.8% 22.2% 100.0%

Average Assets ($ billions) $43.05 $58.62 $101.67

Operating Budget (Basis Points) 2.00 0.42 1.09

Operating Budget less Total Compensation

($ millions)



There is a significant cost advantage of internal management versus external management. Within U.S. Equity, the proportion of index oriented assets (and internal management) contributes to the lower internal management costs, reducing them by more than half over what they would be for active assets. Another source of cost savings is that it is less costly to manage assets internally (i.e. lower salaries and incentives, lower rent, less travel, no marketing costs, no stand-alone business expenses and no profit margin). Approximately 46% of total plan assets are managed internally while 54% are managed externally.

Average Annual Annual Average Annual Annual

Assets Cost Cost Assets Cost Cost

($ millions) ($ millions) (bps) ($ millions) ($ millions) (bps)

Public Equity 23,046 5.0 2.2 20,032 79.5 39.7

U.S. Equity 18,549 4.2 2.3 2,927 12.4 42.5

Non-U.S. Equity 4,496 0.7 1.6 17,105 67.0 39.2

Public Fixed Income 19,248 5.8 3.0 7,551 21.6 92.9

Core Fixed 11,943 3.2 2.7 120 0.4 35.0

Emerging Markets Debt 0 0.0 0.0 6,100 17.2 28.3

U.S. Treasury 3,050 0.0 0.1 0 0.0 0.0

Securitized Debt 1,017 0.8 8.3 0 0.0 0.0

High Yield 702 1.7 24.0 1,331 3.9 29.6

TIPS 2,536 0.1 0.2 0 0.0 0.0

Alternatives 754 0.1 1.9 25,956 254.4 298.5

Private Equity 0 0.0 0.0 10,693 141.6 132.4

Real Estate 0 0.0 0.0 8,911 59.2 66.4

REITs 754 0.1 1.9 0 0.0 0.0

Hedge Funds 0 0.0 0.0 5,209 51.9 99.7

Commodities 0 0.0 0.0 1,142 1.7 14.8

Risk Parity 0 0.0 0.0 5,084 21.4 41.0

Total 43,047 10.9 2.6 58,623 376.9 63.0

Custody 5.0 2.5

Oversight 2.4 0.5 3.2 0.5

Total Fund 43,047 18.3 3.7 58,623 382.6 64.5

Performance Fee

Private Equity 0 0.0 0.0 10,693 115.0 107.5

Real Estate 0 0.0 0.0 8,911 30.0 33.7

Hedge Funds 0 0.0 0.0 5,209 51.0 97.9

Total Performance Fee 0 0.0 0.0 24,814 196.0 79.0

Total Fund with Perf. Fee 43,047 18.3 4.3 58,623 578.6 98.7

Estimate of External and Internal Management Costs

Internal Management External Management

Total for 2020



Total Costs The total costs of the investment program in 2020 are projected to be $610.0 million, or 59.9 basis points of assets under management. In 2018, OPERS actual cost of 46.6 basis points was below the CEM benchmark average cost of 51.5 basis points. CEM Benchmarking, Inc. is an independent firm that provides an assessment of pension plans and it evaluates OPERS investment program relative to the peer group of comparable size. CEM Benchmarking excludes the Incentive/Performance fees for Private Equity and Real Estate in their peer group analysis.

Total

Internal External Invest. % of

Mgmt. Mgmt. Division Total

Total Compensation 14.1 4.5 18.6 3.1%

Operating Budget less Compensation 8.6 2.5 11.0 1.8%

Manager Fees 572.9 572.9 93.9%

Custody 5.0 2.5 7.5 1.2%

Total Costs 27.7 582.3 610.0 100.0%

Percent of Total 0.0 1.0

Average 2020 Asset Size ($ Billions) 43.0 58.6 101.7

Costs in Basis Points 6.4 99.3 NA

Costs in Basis Points to Total Fund NA NA 59.9

Estimated 2020 Total Costs

($ millions)



Peer Group Comparison

The following chart compares the OPERS asset size and Investment staff to its peer group as of June 30, 2019. The chart and table below indicate that the OPERS asset size per Investment Staff is slightly above average among the public plan peer group. The focus of the management team continues to be on increasing productivity and improving results without significantly increasing staff size, except when new responsibilities, investment strategies, or sub-asset classes are added to the investment program.

The following table lists the public pension peer group referenced in the chart.

Source: PFDE (Pension Fund Data Exchange)

Asset Size

($ millions)

California Public Employees' Retirement System $370,300 193 $1,919

California State Teachers' Retirement System $236,900 154 $1,538

State Board of Administration of Florida $163,100 60 $2,718

State of Wisconsin Investment Board $122,200 82 $1,490

New York State Teachers' Retirement System $121,800 46 $2,648

Washington State Investment Board $108,000 48 $2,250

North Carolina Retirement System $102,000 18 $5,667

Ohio Public Employees Retirement System $100,200 62 $1,616

Employees Retirement System of Georgia $95,300 30 $3,177

New Jersey Division of Investment $79,800 29 $2,752

Ohio State Teachers Retirement System $78,900 91 $867

Average $143,500 74 $2,422

Peers

Investment

Staff

Public Plan Peer Group (as of 6/30/2019)

Asset Size per

Investment Staff

APPENDIX

STAFFING AND RESOURCES


Paul

Gre

ff

CIO

Mar

y An

n Ka

bbaz

Exec

utiv

e As

sist

ant

Vaca

nt

Depu

ty C

IO

Priv

ate

Alte

rnat

ives

Qua

ntita

tive

Rese

arch

Fund

Man

agem

ent

Risk

Man

agem

ent

Fixe

d In

com

eAc

tive

Equi

tyQ

uant

itativ

e M

anag

emen

tEq

uity

Tra

ding

Exte

rnal

Man

agem

ent

Cash

/ Sec

Lend

ing

Cher

i Woo

lsey

Sr. P

ortf

olio

Man

ager

Alte

rnat

ives

JG Le

e

Qua

ntita

tive

Man

ager

Qua

ntita

tive

Rese

arch

Prab

u Ku

mar

an

Fund

Man

ager

(Lea

d)

Fund

Man

agem

ent

Dan

Germ

an

Inve

stm

ent R

isk

Off

icer

Risk

Man

agem

ent

Mar

k Eh

resm

an

Sr. P

ortf

olio

Man

ager

Fixe

d In

com

e

Edw

ard

Pain

vin

Sr. P

ortf

olio

Man

ager

Activ

e Eq

uity

Eric

k W

eis

Sr. P

ortf

olio

Man

ager

Qua

ntita

tive

Man

agem

ent

Joan

Sta

ck

Head

Tra

der

Equi

ty T

radi

ng

DeAn

ne M

anni

on

Sr. P

ortf

olio

Man

ager

Exte

rnal

Man

agem

ent

Jerr

y M

ay

Sr. P

ortf

olio

Man

ager

Cash

/Sec

uriti

es Le

ndin

g

Jess

ica

Daw

e

Asso

c. In

vest

men

t Ana

lyst

Alte

rnat

ives

Vaca

nt

Asso

c. In

vest

men

t Ana

lyst

Qua

ntita

tive

Rese

arch

Crai

g Ca

rrol

l

Inve

stm

ent A

naly

st F

und

Man

agem

ent

Vaca

nt

Sr. O

p In

vest

men

t Ana

lyst

Risk

Man

agem

ent

Chris

Rie

ddle

Port

folio

Man

ager

Fixe

d In

com

e

Jeff

Gol

den

Asst

. Por

tfol

io M

anag

er

Activ

e Eq

uity

Aviji

t Bau

ra

Sr. I

nves

tmen

t Ana

lyst

Qua

ntita

tive

Man

agem

ent

Mat

t She

rman

Sr. T

rade

r

Equi

ty T

radi

ng

Ryan

Cas

ebol

t

Asst

. Por

tfol

io M

anag

er

Exte

rnal

Man

agem

ent

Tere

sa B

lack

Sr. I

nves

tmen

t Ana

lyst

Cash

/Sec

uriti

es Le

ndin

g

Tana

Had

dix

Port

folio

Ass

ista

nt

Alte

rnat

ives

Jam

es R

icha

rdso

n

Inve

stm

ent A

naly

st F

und

Man

agem

ent

Jack

Lake

Sr. I

nves

tmen

t Ana

lyst

Risk

Man

agem

ent

Todd

Soo

ts

Port

folio

Man

ager

Fixe

d In

com

e

Amit

Sany

al

Asst

. Por

tfol

io M

anag

er

Activ

e Eq

uity

Roge

r Ton

g

Sr. I

nves

tmen

t Ana

lyst

Qua

ntita

tive

Man

agem

ent

Chris

ty R

uoff

Sr. T

rade

r

Equi

ty T

radi

ng

Linc

oln

Carn

am

Sr. I

nves

tmen

t Ana

lyst

Exte

rnal

Man

agem

ent

Greg

Cor

cora

n

Inve

stm

ent A

naly

st

Cash

/Sec

uriti

es Le

ndin

g

Brad

Stu

rm

Port

folio

Man

ager

(Lea

d)

Real

Est

ate

Anth

ony

Bade

r

Asso

c. In

vest

men

t Ana

lyst

Fund

Man

agem

ent

Mic

helle

Lew

is

Sr. I

nves

tmen

t Ana

lyst

Risk

Man

agem

ent

Nic

k Ko

tson

is

Sr. I

nv A

naly

st/ E

cono

mis

t

Fixe

d In

com

e

Stev

en B

arke

r

Sr. I

nves

tmen

t Ana

lyst

Activ

e Eq

uity

Chad

Ham

berg

Inve

stm

ent A

naly

st

Qua

ntita

tive

Man

agem

ent

Lori

Davi

e

Trad

er I

Equi

ty T

radi

ng

Mic

hael

Tro

tta

Inve

stm

ent A

naly

st

Exte

rnal

Man

agem

ent

Vaca

nt

Inve

stm

ent A

naly

st

Cash

/Sec

uriti

es Le

ndin

g

Step

hen

Stuc

kwis

ch

Port

folio

Man

ager

Real

Est

ate

Anis

ha B

row

n

Inve

stm

ent R

esid

ent

Fund

Man

agem

ent

Sean

McC

arth

y

Asso

c. In

vest

men

t Ana

lyst

Risk

Man

agem

ent

Zach

Zer

man

Inve

stm

ent A

naly

st

Fixe

d In

com

e

Vaca

nt

Sr. I

nves

tmen

t Ana

lyst

Activ

e Eq

uity

Chia

o W

ang

Inve

stm

ent A

naly

st

Qua

ntita

tive

Man

agem

ent

John

Blu

e

Port

folio

Man

ager

(Lea

d)

Exte

rnal

Man

agem

ent

AJ S

ayer

s

Sr. I

nves

tmen

t Ana

lyst

Real

Est

ate

Dave

Dur

y

Inve

stm

ent A

naly

st

Fixe

d In

com

e

Zach

Mar

tin

Inve

stm

ent A

naly

st

Activ

e Eq

uity

Ryan

O' C

onno

r

Inve

stm

ent A

naly

st

Exte

rnal

Man

agem

ent

Anth

ony

Tann

er

Port

folio

Man

ager

(Lea

d)

Priv

ate

Equi

ty

RJ C

ruz

Port

folio

Man

ager

High

Yie

ld

Kurt

Gro

ve

Inve

stm

ent A

naly

st

Activ

e Eq

uity

Nou

mou

ke B

eret

e

Inve

stm

ent A

naly

st

Exte

rnal

Man

agem

ent

Lew

is T

racy

Port

folio

Man

ager

Priv

ate

Equi

ty

Davi

d Bu

chho

lz

Sr. I

nves

tmen

t Ana

lyst

High

Yie

ld

Erik

Cag

nina

Port

folio

Man

ager

(Lea

d)

Fixe

d In

com

e

Dom

inic

k D'

Ange

lo

Asso

c. In

vest

men

t Ana

lyst

Activ

e Eq

uity

RJ V

isse

r

Inve

stm

ent A

naly

st

Priv

ate

Equi

ty

Davi

d Xi

a

Sr. I

nves

tmen

t Ana

lyst

High

Yie

ld

Sang

woo

Par

k

Port

folio

Man

ager

Fixe

d In

com

e

Dieg

o Gi

l

Inve

stm

ent A

naly

st

High

Yie

ld

Aron

Lau

Asso

c. In

vest

men

t Ana

lyst

Fixe

d In

com

e

Tony

End

erle

Trad

ing

Man

ager

Fixe

d In

com

e

JoAn

n Yo

cum

Inve

stm

ent A

ssis

tant

Fixe

d In

com

e

Inv

estm

ents

- O

rgan

izat

iona

l Str

uctu

re



Department/Title Department/Title

Name

Education/Designation/

License OPERS Total Name


License OPERS Total

Anthony Bader Steven Barker

Avijit Barua Teresa Black

John Blue Noumouke Berete

Anisha Brown David Buchholz

Erik Cagnina Lincoln Carnam

Craig Carroll Ryan Casebolt

17

3 7

Fixed Income

Lead Portfolio Manager

MBA, Case Western Reserve

BS, Miami (OH) University

CFA Charterholder

7

External Public Markets

Investment Analyst

MFE, Ohio University

BS, Franklin University

CIPM

FRM

CAIA Charterholder

CFA Charterholder


Senior Investment Analyst

MBA, William & Mary Mason School of

Business

BA, Muhlenberg College

CFA Charterholder

IACCP Designation

Investment

Experience

Investment

Experience

4 13

26 28

4 4



MBA, The Ohio State University

BS, The Ohio State University

CFA Charterholder

CAIA Charterholder

Fund Management

Investment Resident

MBA, Franklin University

BA, The Ohio State University

Series 63

Fund Management

Investment Analyst

BA, Eastern Michigan University

BA, Michigan State University

2020 Level III Candidate in the CFA

Program

6

Active Equity




20 20


Assistant Porfolio Manager


CFA Charterholder

CAIA Charterholder

4 6

Fund Management

Associate Investment Analyst


CFA Charterholder

20

Quantitative Management


MBA, Capital University


CFA Charterholder

CQF Charterholder

2 9

Cash/Securities Lending



Passed Level I of the CFA Program

20 24

Fixed Income

High Yield


BS, Wright State University

CFA Charterholder

11

14

14

25




Name




License OPERS Total

Greg Corcoran RJ Cruz

Dominick D'Angelo Lori Davie

Jessica Dawe David Dury

Mark Ehresman Tony Enderle

Dan German Diego Gil

Fixed Income

High Yield

Investment Analyst

MBA, University of Chicago


Fixed Income

Trading Manager

BS, Bowling Green State University

CFA Charterholder

13

18

Fixed Income

Senior Portfolio Manager



CFA Charterholder

Fixed Income

Investment Analyst

BS, Xavier University

CFA Charterholder

Trading

Trader I

BA, Ashford University

MAOM, Ashford University

CP (Certified Paralegal)

Series 63

18

8

Private Alternatives



Series 63

2 5

Fixed Income

High Yield

Portfolio Manager

MBA, Golden Gate University

MSBA, University of Southern California

CFA Charterholder

18


Investment Analyst

BS, St. Michaels College6 11

22 22

3

Active Equity


BS, Canisius College


Program

2 2

11

19

18

Risk Management

Investment Risk Officer

MBA, University of Pittsburgh

BS, Allegheny College

CFA Charterholder

12 21 2

Investment

Experience

Investment

Experience




Name




License OPERS Total

Jeff Golden Paul Greff

Kurt Grove Tana Haddix

Chad Hamberg Mary Ann Kabbaz

Nick Kotsonis Prabu Kumaran

Jack Lake Aron Lau

11 30

Fixed Income

Senior Investment

Analyst/Economist


CFA Charterholder

12

Fixed Income



CFA Charterholder

FRM

2 2

Fund Management

Fund Manager

MBA, Asian Institute of Management

B Eng (Mech), Anna University

CFA Charterholder

Active Equity

Assistant Portfolio Manager

BS, Princeton University

CFA Charterholder

5 20

5

11

8 17

26


Portfolio Assistant

BA, Indiana Wesleyan University


Investment Analyst

MBA, Wright State University

BS, Wright State University


Program

Office of the CIO

Executive Assistant

AS, Ohio Dominican University

CIO

MBA, University of Detroit

BA, Kalamazoo College

CFA Charterholder

12

22

20

9

Risk Management

Senior Risk Analyst


BS, Marist College

CFA Charterholder

20

15

6

Active Equity

Investment Analyst


CFA Charterholder

Investment

Experience

Investment

Experience

5




Name




License OPERS Total

J.G. Lee Michelle Lewis

DeAnne Mannion Zachary Martin

Jerry May Sean McCarthy

Ryan O'Connor Edward Painvin

SangWoo Park James Richardson

Fixed Income

Portfolio Manager


BA, Northwestern University

CFA Charterholder

FRM

3 13

1


Investment Analyst


CFA Charterholder



MBA, Ashland University

BA, Abilene Christian University

CTP

28

Risk Management

Associate Risk Analyst

MA, King's College London



Program

4

24

18

Quantitative Research

Quant Manager

PhD, The Ohio State University

CFA Charterholder

PRM

FRM

Risk Management

Senior Risk Analyst

MBA, University of Phoenix

BA, Wright State University





BA, Mt. Holyoke College


23

19

Active Equity

Investment Analyst

BBA, University of Kentucky

CFA Charterholder

9

Investment

Experience

Investment

Experience

226

Active Equity


MBA, Wake Forest University

BA, Flagler College

CFA Charterholder

CMT Charterholder

91

9

Fund Management

Investment Analyst

BBA, Eastern Kentucky University

CFA Charterholder

8

3

8 10

16




Name




License OPERS Total

Chris Rieddle Christy Ruoff

Amit Sanyal A.J. Sayers

Matthew Sherman Todd Soots

Joan Stack Stephen Stuckwisch

Brad Sturm Anthony Tanner

13


Real Estate



CFA Charterholder

CAIA Charterholder

7 7

24

30

Trading

Senior Equity Trader


Series 63

37 37

26


Real Estate



MA, University of Cincinnati

MAIR, University of Cincinnati

BA, University of Cincinnati

CAIA Charterholder

26


Private Equity


MBA, Ohio University



2


Real Estate

Portfolio Manager


BA, Hanover College

CFA Charterholder

CAIA Charterholder

Active Equity

Assistant Portfolio Manager

MBA, Oakland University

MSME, Clemson University

BSME, Jadavpur University

CFA Charterholder

13

Fixed Income

Portfolio Manager

MBA, Indiana University

BS, Indiana University

CFA Charterholder

14

Trading

Senior Equity Trader

MBA, Otterbein University


Series 63

Trading

Head Trader Equities

MBA, Fordham University

BA, Mt. Holyoke College

44

25

3417

1

Fixed Income

Portfolio Manager



CFA Charterholder

18 20

Investment

Experience

Investment

Experience

10




Name




License OPERS Total

Roger Tong Lewis Tracy

Michael Trotta RJ Visser

Chiao Wang Erick Weis

Cheri Woolsey David Xia

JoAnn Yocum Zachary Zerman

5

2 52


Private Equity

Investment Analyst

M. Fin., London Business School

BA, Baylor University

Series 63

9

20



MBA, Baylor University

BA, Baylor University

CFA Charterholder


Private Equity

Portfolio Manager

PhD, The Ohio State University


BA, University of California at Berkeley

CAIA Charterholder

25

28

1

Fixed Income

Investment Assistant

AS, Bliss Business College



MBA, The College of Insurance

MS, New Jersey Institute of

Technology



Investment Analyst

BS, University of Dayton

CFA Charterholder

11

Fixed Income

High Yield



MS, John Hopkins University

BS, University of Maryland

3 10

1334

26




BBA, University of Toledo

CFA Charterholder

Fixed Income

Investment Analyst


CFA Charterholder

25

19 1916


Investment Analyst

MBA, Cornell University

BA, National Taiwan University

CFA Charterholder

18

Investment

Experience

Investment

Experience

Documents

ANNUAL INVESTMENT PLAN - OPERS...of 2019, subject to finding attractive opportunities, to achieve the new target allocation of 12%. Staff will focus on small to middle market private