2004 2nd Quarter

• IFS served as the independent fiduciary on behalf of investors in this Fund. IFS decided whether and on what terms the Fund should sell to its affiliated Strategic Property Fund an interest in a valuable piece of real estate in Los Angeles.
• IFS was hired to evaluate the investment merits of two alternative fixed income options in a defined contribution plan.
• IFS was hired to evaluate from the investment perspective of participants in a 401k Plan, the proposed liquidation of one of the mutual funds within the Plan.
  

Ed Patchett presented a session on Alternative Investments at a meeting held in Tucson, AZ on April 19. In the session he reviewed the investment characteristics, structure and key risks of the three major types of alternative investments; private equity, hedge funds and managed futures / commodities. Among other things he pointed out that alternative investments are becoming more common investments for ERISA pension funds and can provide meaningful diversification to traditional asset classes.

Lamont (Monte) Tarbox presented an investment strategies course at the June AFL-CIO Center for working Capital seminar for trustees in Philadelphia, PA. Topics included were: How trustees should approach analyzing their current portfolio, Designing and monitoring an optimum portfolio, and Developing an investment policy statement.

Samuel (Skip) Halpern made a presentation on Fiduciary Audits - What to Expect at the conference held in Lake George from June 19-20, 2004.

"Employee Benefits as Institutional Investors: Coping with the Rising Tide of Corporate Malfeasance Claims" 

Andrew Irving, on June 17, 2004, discussed the array of investment issues plan fiduciaries must confront, the role of an independent fiduciary when a corporate plan has suffered investment losses on employer stock held by the pan and practical advise for the prudent institutional investment of plan assets.

Ohio Retirement Study Council, Columbus, hired Independent Fiduciary Services to conduct fiduciary audits of the $52.9 billion State Teachers Retirement System and the $9.1 billion Ohio Police & Fire Pension Fund, said Aristotle Hutras, council director. Nine IFS consultants will conduct the audits, which should be finished by the end of the year. The other finalist was a combination of Mercer Human Resource Consulting and Mercer Investment Consulting, Mr. Hutras said.

"Outside fiduciaries sought" is the title of an article in the June 14, 2004 issue of Pensions & Investments. The article discusses conflicts of interest that can arise when a company has been sued for securities fraud and its 401k plan, which offers company stock as an investment option, is a member of the class in the securities fraud class action. Referring to a recent prohibited transaction exemption issued by the U.S.

"Pension funds take a tough stance in consultant dealings" is the title of an article in the June 28, 2004 issue of Pensions & Investments. The article discusses how the SEC investigation of investment consultants and the related issue of "soft dollars" and financial arrangements between investment consultants and investment advisers and related disclosures have prompted some pension funds to hire independent firms to evaluate their consultants. Samuel (Skip) Halpern was quoted as saying, "Winds are strongly blowing in that direction and for good reason.