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since the following report was prepared, from approximately $279 million to approximately $265 million.

On behalf of the Committee Mr. McHenry proposed that Mr. Thomas M. Keresey be appointed to the Investment Policy Committee vice Mr. Thomas J. Watson, Jr., who resigned after more than ten years of service. Accordingly, the following motion was suggested and approved:

VOTED that the Board of Regents appoints Thomas M. Keresey a member of the Regents' Investment Policy Committee.

* * * * *

The Fall meeting of the Investment Policy Committee was convened in New York City at the offices of The Ford Foundation on November 9, 1989 at 3 p.m. Present were Barnabas McHenry, Chairman; Jane Mack Gould, Charles H. Mott, Donald Moriarty, and John English. Also present were Smithsonian staff Ann R. Leven, Treasurer, and John R. Clarke, Assistant Treasurer.

Mr. English welcomed the Committee to The Ford Foundation Board Room, for which the Chairman expressed his thanks. Mr. McHenry then introduced Mr. Daniel J. Forrestal and Mr. Dean Williams of Miller, Anderson, & Sherrerd (MAS).

Mr. Forrestal began by saying that MAS' recent equity performance versus the Standard & Poor's (S&P) 500 index was encouraging, although the performance of the fixed income portfolio has declined relative to the bond market averages. Total portfolio value was $97.7 million on 9/30/89 versus $76.9 million on 9/30/88. MAS increased its relative equity holdings from 50% to 58% over the last six months, using cash reserves.

Mr. Forrestal pointed out that MAS has intentionally held its investment in equities below 60% to accommodate the Committee-imposed fixed income guideline of 25% for the total portfolio. He requested the Committee's permission to increase the maximum allowable equity exposure for the MAS portfolio to 65% in the future as deemed prudent in prevailing market conditions. Mr. English asked what the current ratio of equity holdings is in a typical MAS balanced account. Mr. Forrestal replied about 70%. Miss Leven advised that the total SI portfolio as of 10/31/89 showed 21% in fixed income holdings and 11% in cash. Mrs. Gould asked how much more cash MAS would like to move into equities; Mr. Forrestal replied about $7 million.

MAS is beginning to take modest positions in smaller capitalization stocks (defined as capitalization levels of $300 million to $1.5 billion). MAS is creating a Small and Medium Sized Growth Portfolio; Mr. Forrestal believes the Institution should consider using this fund when it becomes available and transfer existing smaller growth stocks into this vehicle. Mrs. Gould asked how MAS selected its "small cap" holdings, to which Mr. Forrestal replied that a MAS partner and a full-time securities analyst utilize a strategic research driven selection process.