Watch the Regents' Investment Committee of Sept. 19, 2023

We begin catching up with the Regents meetings of last week with the Sept. 19th meeting of the Investments Committee. We have pointed to some specific topics related to those meetings in prior postings. A link to a recording of the meeting can be found below.

Public comments covered such topics as Blackrock, the current hotel strike, Palestinians, military investments, staff pay, People's Park, union issues, student-workers at UC-San Diego, and pension contributions.

After public comments, there was the usual presentation of past results, this one covering the year ending June 30, 2023. Although returns were up in that period, they were notably below the benchmarks included in the written materials for the meeting. However, the slide show that was presented showed the returns but not the gap between those returns and the benchmarks. For example, the pension return was 10.1% but the benchmark was 11.6%. One had the sense, however, that the gap was hanging over some of the questions about discretionary investings versus passive. The gap seemed to stem from such areas as private equity and real estate. (The endowment showed similar results.)

Apart from that issue, Regent Makarechian took note of the underfunding of the UC pension, an issue that will come up with an actuarial review at the November meetings. Makarechian mused that maybe pay would have to go up to offset higher contributions. 

Not discussed here except in passing, but likely to come up in November, is the matter of the two-decade long contribution holiday. The only Regent who goes back to that era is Makarechian, originally appointed by Gov. Schwarzenegger. There is a tendency on the part of some of the more recent Regents to view current retirees as having "gotten away" with something because of the contribution holiday. First, the decision to implement the holiday and then to delay its end was made by the Regents, not by retirees. Second, throughout the entire period, faculty pay was below the comparison-8, i.e., lack of contributions were in part making up for too-low pay. There is still more to the story and, hopefully, the complete and accurate story will be aired in November.

As always, we preserve the recordings of the Regents indefinitely since the Regents have no policy regarding retention. You can see the Sept. 19th session at:

https://archive.org/details/regents-investments-committee-9-19-2023.