Chicago Teachers Pension Fund Talk Conferences

Retired Trustee Mary Sharon Reilly

How many conferences are Chicago Teachers Pension Fund (CTPF) Trustees allowed to go on and where should they go?

This question was raised at the September 21, 2023 CTPF Board Meeting by long-time Retired Trustee Mary Sharon-Reilly.

“One of the things we used to do, and I don’t even know when it stopped, (was) when conferences were listed the price was listed, because I think we have to, as fiduciaries, do what’s most reasonable,” Reilly said when the Trustees discussed travel requests. “And I know international foundations are hugely expensive. Like one conference is $12,000 just to go. Not to travel or anything else.”

Trustee Reilly said Trustees can now attend conferences virtual or local. Before trustees would attend investment conferences in Hawaii that cost a fortune, she said.

“So if we want to be true fiduciaries,” Reilly said, “There is so much out there now, we don’t even have to go anywhere. I just think we should be aware of the costs.” 

Trustees can only attend three conferences per year out of state because of the stipends that include hotel, meals and airfare.

Reilly’s comments were made just before CORE Trustees President Jeffery Blackwell, Vice President Jacquelyn Price-Ward, Teacher Trustee Tammie Vinson and Retired Teacher Trustee Lois Nelson requested attending the Neighborhood Youth Association conference in Los Angeles. Principal Jerry Travlos and CPS Trustee Tanya Woods requested to attend the Callan Conference in Chicago.

Everybody voted in favor of the travel request except Retired Trustee Maria J. Rodriguez who voted no.

“I think the number of conferences should be reduced until we do something with our funding level (47 percent) because it’s so low,” Rodriguez told Second City Teachers. 

Critics have pointed out that these conferences are ways for money managers to schmooze, and wine and dine trustees to get pension fund money.

But Teacher Trustee and Investment Chair Phil Weiss said attending the conferences in other cities is still important to gather information when making decisions for the Chicago Teachers Pension Fund. Weiss said he attended five different wealth and private equity conferences in Chicago and a governance conference in San Diego this past summer.

“Those marketing meetings are golden,” Weiss said. “It’s about networking.”

Weiss said after he made contacts and built a relationship with pension fund reps from California and NY he was able to make an informed decision to defund fossil fuel investments by 2027.

“I talk to these people now, and it helped us to divest from fossil fuels,” he told Second City Teachers. “We need a durable and defensible plan to avoid litigation.”

The topic of private equity in South Africa then came up toward the end of a five-hour meeting that was posted on Youtube.

CTPF Chief Investment Officer (CIO) Fernando Vinzons talked about attending a pension fund conference in South Africa that will be financed by the South African City Pension Fund. He made it clear that CTPF will not pay a cent toward his exotic trip to talk about pension funding.

However, he added that CTPF is currently looking at two South African private equity groups that the Teachers Pension Fund is currently invested in. (I asked myself, are these private equity groups working with the South African Pension Fund to finance the CTPF trip and curry favor?)

Retired Teacher Trustee Mary Sharon-Reilly asked if their Fund could report on the progress of private equity investments in Africa more often. She also asked how they were performing.

“There are just two private equity investments in Africa since 2019,” Vinzons said. “They’re still negative and they’re trying to turn it around.”

Trustee Maria J. Rodriguez then asked the CIO two more pointed questions: who are these companies and what do the numbers show?

According to one participant at the board meeting, Vinzon’s eyes widened before he answered Rodriguez’s question.

The Chief Investment Officer said the two South African private equity companies are Development Partners International (DPI) and Advance Financing Investments. He said he would get back to Rodriguez to show how exactly they are performing. Rodriguez told him to make sure he reports out his findings to everyone.

“Well, we don’t need flights to Africa,” Trustee Reilly said. “We just go on zoom.”

During the private equity discussion Board Trustee Tanya Woods then asked how often does the Pension Fund hear reports from the other money managers. CIO Vinzons said there is such a large roster of money managers (about 65 funds) that it would be ‘too cumbersome’ to hear from everyone.

“We haven’t heard from everyone (and those) on the Watchlist because we have so much other stuff to do,” he said. “We will try to provide more updates.”

The big question that has been on our minds is the status of Ariel Investments who have performed so poorly that they have been on the CTPF Watchlist for quite some time. According to one source, their investments are winding down due to poor performance. Their CEO Mellody Hobson also chairs the Starbucks Board, a company involved in vicious union-busting against the workers who want to organize. A few Trustees have supported Ariel despite its poor performance and reputation.

Reilly had once served as the President of the Chicago Teachers Pension Fund which was a paid position. President Blackwell is not paid. Trustee Reilly also wondered if the Fund could invest in more local companies.

“I think there should be a focus on local companies,” Reilly said. “I mean we’ve totally eliminated Walton Street (a private equity real estate investment firm). If they lose money for you this year, they sure as hell ain’t gonna lose it next year.”

Trustee Weiss said they certainly can look at local companies to invest in, as long as they meet the fiduciary requirements to make the Fund money.