NOTES TO FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS (CONTINUED) Retirement Plan for Employees of Georgia Ports Authority (Continued) The Plan may invest indirectly, either through a mutual fund, structured note, or exchange traded fund, in high yield bonds, bank loans, long/short equities, long/short futures, commodities, hedge funds, convertible arbitrage, fixed income arbitrage, distressed securities, merger arbitrage, and global macro funds. The Plan may also invest up to 5% of plan assets in “Alternatives” such as private placements or limited partnerships, as provided under Georgia Code Section 47-20-87. The 5% is to include committed capital that has not yet been invested. Fair Value Measurements: As of June 30, 2020, the Plan reported exchange traded funds and fixed income funds in the amounts of $217,727 and $95,210, respectively, as level 1 investments in the fair value hierarchy. Additionally, the global opportunities hedge fund investments of $2,184 were measured and reported at their net asset value (NAV). This hedge fund investment had no unfunded commitments and the redemption frequency was closed as of June 30, 2020. As of June 30, 2019, the Plan reported exchange traded funds and fixed income funds in the amounts of $193,292 and $85,420, respectively, as level 1 investments in the fair value hierarchy. Additionally, the global opportunities hedge fund investments of $3,203 were measured and reported at their net asset value (NAV). This hedge fund investment had no unfunded commitments and the redemption frequency was closed as of June 30, 2019. Debt, equity and mutual fund securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets for those securities. Securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. The Plan has no investments classified in Level 3. Global opportunities hedge funds. This type includes one investment in a limited partnership that hold a majority of the funds' investments in non-U.S. sovereign, quasi-sovereign and corporate debt located within emerging market countries, including distressed, high yield and defaulted debt, while hedging against global market and credit risks with derivative instruments including futures, foreign currency contracts and credit default swaps. The fair values of the investments in this type have been determined using the NAV (or its equivalent) per share of the investments. This investment has a seven-year term from the initial close on June 1, 2012, with one one-year extension. Capital will begin returning to investors at the end of the investment period, five years from the initial close. 28
