General Pension Fund Consultant Request for Proposal TABLE OF CONTENTS A. INTRODUCTION ................................................................ ............................................ 2 B. MINIMUM QUALIFICATIONS ................................................................ ..................... 3 C. INFORMATION AND REQUIREMENTS ……………. …………………………….. 3 1. Time Schedule …………………………………………………………………………. 3 2. Submission of Written Questions………………………………………………………. 4 3. Marketing Cessation Policy ……………………………………………………………. 4 4. Third Party Marketing and Referrals Disclosure Policy ……………………………….. 5 5. General Requirements …………………………………………………………………. 5 6. Submission Requirements ……………………………………………………………. . 6 D. ATTACHMENTS ……………………………………………………………………...... 10 1. Minimum Qualification Certification ………………………………………………….. 10 2. Company Questionnaire ……………………………………………………………….. 11 3. Warranties ……………………………………………………………………………… 12 4. Fee Proposal …………………………………………………………………………… 13 E. EXHIBITS ……………………………………………………………………………….. 14 1. Exhibit A Scope of Services …………………………………………………………. 14 2. Exhibit B RFP Questionnaire ………………………………………………………... 16 3. Exhibit C City Required Forms ……………………………………………………... 24 - Third Party Marketing and Referrals Disclosure Form …………………. 25 - Gift Disclosure Form ……………………………………………………. 26 Page 1 of 39
Transcript
General Pension Fund ConsultantRequest for Proposal
TABLE OF CONTENTS
A. INTRODUCTION ............................................................................................................ 2
B. MINIMUM QUALIFICATIONS ..................................................................................... 3
C. INFORMATION AND REQUIREMENTS ……………. …………………………….. 31. Time Schedule …………………………………………………………………………. 32. Submission of Written Questions………………………………………………………. 43. Marketing Cessation Policy ……………………………………………………………. 44. Third Party Marketing and Referrals Disclosure Policy ……………………………….. 55. General Requirements …………………………………………………………………. 56. Submission Requirements ……………………………………………………………. . 6
D. ATTACHMENTS ……………………………………………………………………...... 101. Minimum Qualification Certification ………………………………………………….. 102. Company Questionnaire ……………………………………………………………….. 113. Warranties ……………………………………………………………………………… 124. Fee Proposal …………………………………………………………………………… 13
E. EXHIBITS ……………………………………………………………………………….. 141. Exhibit A Scope of Services …………………………………………………………. 142. Exhibit B RFP Questionnaire ………………………………………………………... 163. Exhibit C City Required Forms ……………………………………………………... 24
- Third Party Marketing and Referrals Disclosure Form …………………. 25- Gift Disclosure Form ……………………………………………………. 26
Page 1 of 26
General Pension Fund ConsultantRequest for Proposal
A. INTRODUCTIONThe Los Angeles City Employees’ Retirement System (LACERS) administers an investment portfolio with approximately $9.4 billion in assets. As of November 30, 2009, the portfolio consists of:
Asset Class Mkt Value Managers
Fixed Income $ 2.4 billion 4 (four) actively-managed U.S. bond3 (three) opportunistic F.I. commingled funds1 (one) commercial mortgage commingled fund
U.S. Equity $ 3.7 billion 3 (three) passively-managed U.S equity, of which 2 (two) are commingled funds7 (seven) actively-managed U.S. equity3 (three) fund-of-funds3 (three) corporate governance funds
Non U.S Equity $ 1.8 billion 1 (one) passively-managed EAFE index7 (seven) actively-managed Non U.S. equity1 (one) corporate governance fund
Real Estate $ 0.4 billion 40 (forty) commingled funds
Alternative Investment $ 0.9 billion 80 (eighty) commingled funds
Cash $ 0.2 billion internally-managed
In this Request for Proposal (RFP), LACERS is seeking a General Pension Fund Consultant to provide expert advice and assistance on the review and update of objectives, benchmarks, and performance evaluations and other tasks as may be required or requested by the Board and/or Investment staff.
LACERS has traditionally engaged a single General Pension Fund Consultant on a full retainer basis to provide services as described in the Exhibit A - Scope of Services. However, in this general pension fund consulting search, LACERS is also considering unbundling the consulting services by employing a primary general pension fund consultant for general consulting services included in a pool of consultants that will bid on special projects as defined in the Scope of Services.
LACERS current service providers include:1. Custodian: The Northern Trust Company2. Real Estate Consultant: Courtland Partners3. Alternative Investments Consultant: Hamilton Lane4. Specialized Alternative Investment Consultant: Pension Consulting Alliance5. Auditor: Brown Armstrong, CPA6. Actuary: The Segal Company
Page 2 of 26
General Pension Fund ConsultantRequest for Proposal
Although LACERS employs specialty consultants for real estate and alternative investment, the General Pension Fund Consultant sought in this RFP will still have broad oversight over these asset classes as they fit within the total Fund.
B. MINIMUM QUALIFICATIONSA proposing firm must meet all of the following minimum qualifications to LACERS satisfaction to be given further consideration. The Proposer must complete the Minimum Qualification Certification (Attachment 1) substantiating that the Proposer satisfies all minimum qualifications and requirements. Failure to satisfy each of the minimum qualifications may result in the immediate rejection of the proposal.
1. The firm must have at least one institutional, full retainer general consulting client with a portfolio valued at not less than $5 billion.
2. The firm must be a registered investment advisor under the Investment Advisers Act of 1940 and must be a fiduciary to LACERS.
3. Each of the consultant(s) assigned to the LACERS relationship should have a minimum of three (3) years institutional investment general consulting experiences in the proposed service area and employed by the firm for at least three (3) years.
4. The firm must be directly responsible for the management of the account, and all personnel responsible for the account must be employees of the firm.
5. The consultant must not have, nor potentially have, a material conflict of interest to include, but not limited to, the LACERS Board, staff, actuary, auditor, investment manager(s) or other consultant(s).
6. The consultant must carry the following insurance coverage or must have applied for it by the submission date of the RFP:a. Workers’ Compensation and Employer’s Liability --- min $1,000,000b. General Liability --- min $1,000,000c. Professional Liability (Error and Omissions) --- min $2,000,000
7. All minimum qualifications must be met by January 27, 2010.
C. INFORMATION AND REQUIREMENTS1. Time Schedule
RFP Available to Prospective Proposers December 09, 2009Written Questions Submission by e-mail December 16, 2009 – 3.00 pm PSTResponse to Written Questions posted on
LACERS Website December 23, 2009Final Date for Proposal Submission January 27, 2010 – 5.00 pm PSTInterviews of Finalists TBDContract Start Date July 1, 2010
Page 3 of 26
General Pension Fund ConsultantRequest for Proposal
2. Submission of Written QuestionsShould a firm need further clarification on the questions or specifications contained in the RFP, the Proposer may e-mail questions to [email protected] by December 16, 2009 at 3.00 pm PST. The subject line of the e-mail should show the name of your firm and ‘General Pension Fund Consultant RFP’. Responses to questions will be posted on our website, www.lacers.org, by December 23, 2009.
All questions submitted must be preceded with the question number and the question in bold. LACERS shall only be bound to responses specific to this RFP Questionnaire.
3. Marketing Cessation PolicyThe purpose of this policy is to prevent, and avoid the appearance of, undue influence on the Board or any of its members in the award of investment related and other service contracts.
Notification of this policy will be sent to all firms considered by LACERS Staff or Consultant to be potential interview candidates for the award of contracts. From the time the potential candidates are notified until the search ends and a contract is awarded, all direct marketing contact by firms that are potential candidates for the award of the contract will be limited to communications and meetings as set forth in the solicitation, and to meetings at the request of the Consultant, information (other than enhancements to proposals or bids) sent to the Consultant or LACERS, written questions about the search directed to the Staff or Consultant, and one meeting with each potential firm as determined by Staff at LACERS office. In addition to all other applicable gift restrictions, Board members and Staff will accept no entertainment or gifts of any kind from any firm that is a potential candidate for award of the contract. This policy does not prohibit contact with potential candidates for award of a contract at group social events, educational seminars, conferences, or charitable events so long as there is no direct marketing, and there are no discussions about the contract or the process to award it.
Firms who currently have contracts with LACERS and who are potential candidates for the award of a contract or the renewal of the existing contract will be allowed to continue contact related to the performance of the existing contract with Staff, but they shall not have any discussions or communications with them or with Board members regarding the proposed contract or the process to award it, or regarding the renewal of the existing contact, other than as permitted by this policy, and they shall not provide any type of gift or entertainment to Board members or Staff during the specified period of time or during the three months prior to the renewal of the existing contract, whichever is longer.
Firms that are invited to interview with the Board will be required to submit a statement listing all contacts with Board members, Staff and Consultants during the search period.
Any violation of this policy shall result in automatic disqualification of the firm involved.
General Pension Fund ConsultantRequest for Proposal
This policy shall be periodically reviewed by the Board and may be amended at any time.
4. Third Party Marketing and Referrals Disclosure PolicyFirms submitting investment proposals for consideration by LACERS are hereby required to disclose the identity of all third-party marketers and/or individuals by whom the Firm has been referred to LACERS, and further indicate those so identified that stand to receive fees or other considerations in the event that a contract between the Firm and LACERS is secured (see Exhibit C for the form).
5. General RequirementsAll proposals must comply with the requirements and specifications of this RFP:
a. Conditions. If LACERS is unable to agree to contract terms with the Proposer receiving the highest evaluation in this RFP process or if the Proposer has not fulfilled all conditions of the RFP at the time of contract execution, LACERS reserves the right to terminate contract negotiations with that Proposer without undertaking another RFP process, therefore enabling the Board to negotiate with the Proposer receiving the next highest evaluation.
b. Withdrawal of RFP. LACERS reserves the right to cancel this RFP at any time, and to reject any and all proposals submitted in response to this RFP if LACERS determines such action or actions are in its best interest.
c. Amendments to Questionnaire. LACERS reserves the right to amend the RFP Questionnaire at any time but no later than 5 (five) business days prior to Proposal Submission due date. Firms should check www.lacers.org for any updates of this RFP. Firms shall respond to the questionnaire and any exhibits, attachments, amendments or written responses to submitted questions. If significant amendments occur, LACERS may extend the due date.
d. Proposal Applicability. To allow sufficient time for contract negotiation, all prices and conditions stated in the proposal must be firm for a period of 180 days from the deadline for submission of proposals.
e. Legal Review. LACERS expects that all Proposers will agree to be bound by the terms and conditions articulated in this RFP. For this reason, it is strongly recommended that Proposers have the terms and conditions contained herein reviewed with corporate counsel and that the Proposer concerns be brought to LACERS attention.
f. Governing Law. This procurement and any agreement with Proposers that may result shall be governed by the laws of the City of Los Angeles and the State of California. Submission of a proposal constitutes acceptance of this condition.
General Pension Fund ConsultantRequest for Proposal
g. Basis for Proposal. Preparation of proposals should be responsive-specific only to questions asked in the RFP and consistent with the instructions provided in the RFP.
h. Proposal Preparation Cost. Any cost incurred by the Proposer in the preparation, transmittal or presentation of any proposal or material submitted in response to this RFP will be borne solely by the Proposer.
i. Proposer Qualification. LACERS may make such investigations as necessary to determine the ability of the Proposer to adhere to the items as identified within the questionnaire portion of this RFP. LACERS reserves the right to reject the proposal of any Proposer who, in LACERS opinion, is not a “Responsible Proposer” as defined below:
“Responsible Proposer” means a Proposer who submits a responsive proposal and who has furnished, when required, information and data to prove that his financial resources, production and service facilities, personnel, service reputation and experience are adequate to make satisfactory delivery of the services or products described in the proposal.
j. Assignment and Subcontracting. LACERS requires General Pension Fund Consultant services described herein to be performed by the Proposer. However, subcontracting of these services may be allowed if in the best interests of LACERS and only if fully disclosed in the RFP Questionnaire # 12.
6. Submission Requirements
a. Response Format. To be eligible for evaluation, a proposal must adhere strictly to the format set forth below. Failure to do so may result in disqualification. Proposers must address each of the required sections indicated below. Completeness, clarity and brevity are stressed in the RFP proposal binders. Each proposal that is submitted must include written acknowledgment in the front cover of the inside of the each 3-ring binder receipt of any and all amendments (if applicable) made to this RFP.
Within each section of the proposal, the proposer should address the items in the RFP in the order in which they appear in the RFP. Furthermore, repeat and bold- type each question number and question in the RFP before providing your answer .
Response to the RFP in the Word document should be in standard 12 point Times New Roman font (or its equivalent), non-bold and non-italicized. All questions requesting asset values must be stated in US Dollars only.
All forms, the RFP Questionnaire, and the electronic versions in Word and Excel provided in this RFP must be completely filled out. If a question does not apply to you, please write in “not applicable” and then state the reason why the question does not apply to your firm.
Page 6 of 26
General Pension Fund ConsultantRequest for Proposal
The content and sequence of the proposal will be as follows:
Section Title I Cover Page II Table of ContentsIII Letter of TransmittalIV RFP QuestionnaireV Required Attachments
I. Cover Page Title for cover page: “RFP for General Pension Fund Consultant”.
II. Table of ContentsImmediately following the cover page, there must be a comprehensive Table of Contents of the material included in the proposal. The Table of Contents must clearly identify the proposal section/subsection and the applicable page numbers.
III. Letter of TransmittalA letter of transmittal must accompany all responses to the RFP Questionnaire and placed as the first page of the RFP. The letter of transmittal must further state that the response to the RFP Questionnaire is valid for six (6) months subsequent to the proposal due date.
The letter of transmittal MUST:a. identify the RFP as “General Pension Fund Consultant”;b. identify the submitting organization;c. identify the name and title of the person authorized by the organization to
contractually obligate the organization;d. identify the names, titles, telephone and fax numbers, and e-mail addresses
of persons to be contacted for clarification; e. certify that your firm has fully complied with all provisions of the RFP and
that all statements are true and accurate, and that the firm has not knowingly made any false or misleading statements in its proposal;
f. be signed by a person authorized to contractually obligate the organization.
IV. Request of Proposal (RFP) Questionnaire
See Exhibit B
V. Required Attachments1. Minimum Qualification Certification.2. Company Questionnaire.3. Warranties.4. Fee Proposal.5. City Required Forms (see Exhibit C).
Page 7 of 26
General Pension Fund ConsultantRequest for Proposal
6. Form ADV.7. Organizational Chart of Parent/Subsidiary relationships.8. Organizational Chart of Proposer’s organization (indicating key personnel
names and titles).9. Your Firm Conflict of Interest Policy, if available.10. Standard Report samples.11. Other Report samples, i.e.: white paper, research, etc.12. Other Materials the proposer deems necessary to improve the quality of the
response.
b. Hard Copy Binder. Ten (10) hard copies of the proposal shall be submitted, each in a 3-ring binder, indexed with each section separated by properly labeled tab dividers. The name of the firm shall be placed on the front cover with “General Pension Fund Consultant RFP” and the date of “January 27, 2010”; and the name of the firm shall appear on the spine of each copy of the RFP binder. One copy shall be labeled “ORIGINAL” on the front cover and spine, shall contain all original signatures, and all original completed documents as required by Section C.6.V.1-5.
Additional copies of the proposal may be requested from firms selected for interview. These copies must be the duplicates of the response submitted for evaluation.
c. Word and Excel Electronic Versions. In addition to the hard copy and the hard copy responses of the proposal, please provide the proposal and the responses in Microsoft Word and in Microsoft Excel saved on an electronic storage media such as: CD or flash drive (also known as jump drive or USB keychain drive).
The Excel spreadsheet containing questions and answers to the RFP must be submitted in the format specified in the downloaded Excel RFP Questionnaire and saved with a file name using the prescribed file name format found in the spreadsheet. We strongly advise against cut and paste answers from the Word document directly to the Excel document as it may change the integrity of the formatted Excel cells.
Note that there may exist maximum word limitations in the Excel spreadsheet that are not necessarily found in the Word document. In such cases we would expect respondents to summarize the answers while maintaining the same meaning and consistency with the Word document responses, where applicable. Please carefully follow the instructions located at the top of the formatted Excel spreadsheet.
The electronic storage media containing the file of the Word document and the file of the Excel spreadsheet should be identified with the firm name and “RFP General Pension Fund Consultant” directly on the electronic storage media and placed in a sealed envelope with the firm’s name written across the front and attached or affixed inside the front cover of the original signature binder only.
Page 8 of 26
General Pension Fund ConsultantRequest for Proposal
d. Authorization to Bind Organization. Proposals must be signed by an individual with the authority to bind the Proposer organization and the authority of the individual signing must be stated thereon (see “Company Questionnaire” form).
e. Confidentiality of Responses. The word CONFIDENTIAL should be stamped and must be clearly designated on every page in the proposal containing proprietary or trade secret information. Proposers should be aware that LACERS is subject to the Public Records Act, but will endeavor to keep these materials private.
f. Submitting the RFP Binders and Electronic Storage Media. The hard copy proposals in the 3-ring binders along with the electronic storage media (containing the Word document and Excel spreadsheet) shall be sealed in packaging suitable for safe delivery which shall be clearly marked on the lower left hand corner of the front of the packaging for identification purposes:
NAME OF FIRMRFP GENERAL PENSION FUND CONSULTANT
With the package addressed to:
DANIEL P. GALLAGHER, CHIEF INVESTMENT OFFICERLOS ANGELES CITY EMPLOYEES’ RETIREMENT SYSTEM
360 EAST SECOND STREET, 2nd FLOORLOS ANGELES, CA 90012-4207
In addition, the Excel spreadsheet must also be e-mailed back to LACERS at [email protected] not later than January 27, 2010 at 5:00 PM Pacific Standard Time (PST).
g. Deadline. All 10 (ten) completed and fully signed copies of the final proposals must be received at LACERS office by 5:00 PM Pacific Standard Time on January 27, 2010. Date and time will be recorded on the proposals upon their arrival.
General Pension Fund ConsultantRequest for Proposal
ATTACHMENT 1
MINIMUM QUALIFICATIONS WARRANTY
_______________________________________Proposer Firm Name
By signing below, an authorized representative of the proposer firm warrants that the proposer has met all of the Minimum Qualifications by January 27, 2010.
_______________________________Name of Firm
_______________________________ ______________________________Authorized Signature Print Name
_______________________________ ______________________________Title Date
Page 10 of 26
General Pension Fund ConsultantRequest for Proposal
ATTACHMENT 2
COMPANY QUESTIONNAIRE
_______________________________________Proposer Firm Name
______________________________________________________________________________Organization’s Legal Name
______________________________________________________________________________Type of Business (Corporation, Partnerships, Individual, etc.) Website Address
______________________________________________________________________________Address of Office Managing the Account (if different)
______________________________________________________________________________RFP Contact Name
______________________________________________________________________________Telephone Number Fax Number Email Address
______________________________________________________________________________RFP Back-up Contact Name
______________________________________________________________________________Telephone Number Fax Number Email Address
_______________________________________________ ___________________Signer (authorized to contractually bind the Organization) Date
______________________________________________________________________________Name and Title of Authorized Signer (Please print)
_______________________________________________ ___________________Signer (authorized to contractually bind the Organization) Date
______________________________________________________________________________Name and Title of Authorized Signer (Please print)
Page 11 of 26
General Pension Fund ConsultantRequest for Proposal
ATTACHMENT 3
WARRANTIES
_______________________________________Proposer Firm Name
Proposer agrees to the incorporation of the following warranties in a proposed contract:
Proposer warrants that it maintains or will obtain, at its expense prior to engagement, required insurance policy stated in item B.6 for negligent acts or omissions and that such coverage is applicable to Manager’s actions under the Contract.
Proposer warrants all information and statements in this RFP are complete and true. Any statement or claim found to be incomplete, misleading, or false will be grounds for immediate disqualification or dismissal and may be subject to legal action.
Proposer warrants this proposal is genuine, and not sham or collusive, nor made in the interest or on behalf of any person not named therein; the proposer has not directly or indirectly induced or solicited any other proposer to put in a sham bid, or any other person, firm or corporation to refrain from submitting a proposal, and the proposer has not in any manner sought by collusion to secure for themselves an advantage over any other proposer.
_______________________________Name of Firm
_______________________________ ______________________________Authorized Signature Print Name
_______________________________ ______________________________Title Date
Page 12 of 26
General Pension Fund ConsultantRequest for Proposal
ATTACHMENT 4
FEE PROPOSAL
_______________________________________Proposer Firm Name
Your lowest fees in US $ for managing the relationship for General Fund Consultant presented in the format shown in the table below:
Column A Column B
Description Full Retainer 1 Unbundled Services 2
A. CONSULTING SERVICES 1. General 2. Performance Measurement and Benchmarks B. SPECIAL PROJECTS 1. Comprehensive Asset Allocation 2. Asset Liability Study 3. Manager Search and Selection 4. Specialty Consulting
TOTAL FEE: YEAR 1 $ $ YEAR 2 $ $
YEAR 3 $ $ 1 Indicate one total annual fee in Column A for years 1, 2 and 3. 2 Indicate separate fee for each listed service and provide totals.
Are the fees presented above negotiable?
What is your hourly rate for project consulting?
Year 1 Year 2 Year 3
Once a consultant (or consultants) has been selected, negotiations of the fee may become necessary in order to account for the size of potential funding, the increments of the funding and any clarification. In no case will the negotiations result in a fee that is higher than the fee contained in the proposal.
Page 13 of 26
General Pension Fund ConsultantRequest for Proposal
EXHIBIT A
SCOPE OF SERVICES
A. CONSULTING SERVICES 1. GENERAL
1.1. Review, analysis, and recommendations on on-going investment policies and issues, including, but not limited to, divestiture, and general portfolio management;
1.2. Assist in the implementation of Board’s policy action, decision, or instruction;1.3. Analysis of investment strategies, including, but not limited to, market trends, and
individual investment opportunities;1.4. Review and analysis of all asset classes’ or investment programs’ strategic and
annual plans;1.5. Provide technical advice on all asset types;1.6. Review of current asset allocation plan annually and analysis of financial condition
of Fund, i.e., benefit payments versus contributions; and trends of healthcare assets, liabilities, and funded liquidity;
1.7. Analysis of and recommendations on strategic asset allocation strategies and guidelines as necessary, inclusive of asset allocation targets and minimum and maximum ranges for major asset classes;
1.8. External investment manager on-going due diligence;1.9. Provide research reports on investment concepts and markets;1.10. Provide training and workshops to staff and Board on investment topics covered
within the scope of maintaining a prudent investment portfolio, as requested;1.11. Attend all meetings scheduled for the Board and Committees (Board meets on 2nd
and 4th Tuesdays of each month; Committees meet 1 – 2 times per month);1.12. Available at anytime to answer ad-hoc questions, either by phone or by email;1.13. Advise on all other relevant matters pertaining to the prudent and optimal
management of the portfolio as needed.
2. PERFORMANCE MEASUREMENT AND BENCHMARKS2.1. Performance analysis of all asset types, programs and total fund using quarterly
performance reports generated from LACERS Master Custodian;2.2. Provide quarterly performance summary reports evaluating the major US and non-US
financial markets, review of total portfolio and major asset classes, and analysis of portfolio and manager risks;
2.3. Review of and recommendations on benchmarks;2.4. Assist in evaluating performance data in relation to appropriate benchmarks and
investment objectives;2.5. Discussion with managers as appropriate regarding reconciliation of performance
data and performance attribution.
Page 14 of 26
General Pension Fund ConsultantRequest for Proposal
B. SPECIAL PROJECTS1. COMPREHENSIVE ASSET ALLOCATION
1.1. Generate multiple asset allocation options of portfolios on the efficient frontier, typically done once in about every 3 years;
1.2. Recommend risk tolerances, i.e., minimum and maximum ranges for major asset classes, capital market assumptions, and correlations of asset classes, to establish constraints for the risk-return optimizer;
1.3. Analysis of and recommendations on strategic asset allocation strategies and guidelines as necessary, inclusive of asset allocation targets and ranges.
2. ASSET LIABILITY STUDY 2.1. Perform comprehensive liability analysis;2.2. Coordinate liability analysis findings with LACERS actuary.
3. MANAGER SEARCH AND SELECTION 3.1. Assist in the Request for Proposal (RFP) processes as requested including review of
RFP draft, development of qualitative and quantitative manager ‘cut criteria’, and assistance in the selection process;
3.2. Review and advise of manager’s contracts (business perspective) and assist in manager fee negotiations;
3.3. Provide manager style analysis reports, performance calculations and recommendations;
3.4. Attend on-site managers’ due diligence meetings as required (approximately 3 – 5 times per year).
4. SPECIALTY CONSULTING 4.1. Analysis, recommendations, and advice to the Investment Committee on new and
specialized asset types and classes;4.2. Provide an in-depth analysis of and recommendations on custody-related services
pertaining to securities lending, short-term investment funds, and other investment-related operations;
4.3. Recommendations and advice in response to unique situations that may arise in the investment industry for any new specialized asset type;
4.4. Other projects, as necessary.
Page 15 of 26
General Pension Fund ConsultantRequest for Proposal
EXHIBIT B
REQUEST OF PROPOSAL (RFP) QUESTIONNAIRE
A. Organization1. Provide the address of the local office that will service this account. If you have other
office locations, indicate the office location (address and telephone number), and briefly explain what are the primary functions performed within each office?
2. Give a brief history of your firm's involvement in the consulting business, including the year of organization. As of December 31, 2009, how many years has your firm provided pension fund consulting services to public pension plans with total assets above $5 billion on: 1) a full retainer basis; and 2) on a project basis only?
3. Provide a copy of the organizational chart of:a. Parent/subsidiary relationships.b. Respondent’s organization (indicating key personnel names and titles).c. Your consulting unit listing major functional areas with the names and titles of key
staff in each area along with the total number of staff in each area. If there are overlaps, please indicate and explain as a footnote.
4. Describe the ownership structure, including affiliations, subsidiaries and employee ownership. Has your firm undergone ownership structure changes in the past three years, or is ownership changes planned or anticipated at this time? Briefly explain.
5. Is your firm a Minority-owned Business Enterprise (MBE) or a Woman-owned Business Enterprise (WBE)? If ‘yes’, please indicate which. If certified as such, please name the certifying body or organization.
6. Please indicate whether your firm is a registered investment advisor under the Investment Advisor Act of 1940 and whether your firm functions as a fiduciary. If so, please provide a copy of the firm’s most recent Form ADV. Will you be a fiduciary to LACERS?
7. What are your firm's consulting specialties and strengths? What differentiates your firm
from your competitors? What are your firm’s limitations? Why should LACERS hire your firm rather than your competitor(s)? Please list your top 5 competitors using the format below.
1.2.3.4.5.
Page 16 of 26
General Pension Fund ConsultantRequest for Proposal
8. For the past 5 (five) calendar years, please list all services provided by the firm and the revenues generated by these services.
Source of revenues (US$ in thousands)
2009 est 2008 2007 2006 2005
1. General Pension Investment Consulting (full retainer) 2. General Pension Investment Consulting (unbundled)
A. Consulting Services
1. General
2. Performance Measurement and Benchmarks
B. Special Projects
1. Comprehensive Asset Allocation
2. Asset Liability Study
3. Manager Search and Selections
4. Other Consulting Services 3. Investment Managers
4. Investment Transactions or Brokerage Fees 5. Other * a.
b.
c.
d.
e.
* Please list by name any other business line that represents more than 10% of your revenue for each year.
9. Does the firm, its principals, or any affiliate, own any part of a money management firm,
broker-dealer, or other organization that sells products and services to institutional investors? Identify the firm(s) and describe the relationship.
10. Does your firm or any of its affiliates manage money or provide trust services for clients? Does your firm have relationships with money managers that you recommend, consider for recommendation, or otherwise mention to the plan for our consideration? If so, please describe.
11. Describe your plans for managing the future growth of your firm in terms of staff, maximum assets, number of clients, etc. and how this impacts your ability and commitment to servicing your existing clients.
12. Do you subcontract or outsource any parts of your investment consulting business? If yes, please describe in detail which parts are performed externally and the reason for doing so. Please provide the name(s) of the providers, their office location, how long they have been in business, and the qualifications of the specific people who will be working on our account.
Page 17 of 26
General Pension Fund ConsultantRequest for Proposal
B. Clients13. Please list the number of institutional clients that the firm has serviced in:
a. an all-inclusive, or full-retainer, fee capacity over the last 5 years.
12/31/09 12/31/08 12/31/07 12/31/06 12/31/05# of clients
Assets (US$ in thousands)
b. a project basis over the last 3 years for institutional clients with assets over $5 billion.
List of Projects 12/31/09 12/31/08 12/31/071. Comprehensive Asset Allocation
14. Provide references using the format below for all public pension funds with assets ≥ $5 billion for whom you provide primary consulting services comparable to the services requested in this RFP. Indicate whether they are a full-retainer client (FR) or project basis (P) clients.
For each reference listed, include client name, full retainer or project basis, name of contact person, title, telephone number, and email address. Please secure advanced permission to contact at least 3 of these references. If there are fewer than 3 references, then include all.
Client Name FR or P Contact Title Telephone # Email1.2.3.4.5.
15. Provide a list of clients using the format below that have terminated your services within the last 5 years, the dollar amount of the fund size at time of termination, and the reasons for termination of each.
Client Name Size of Fund ($000) Reason(s) for Termination1.
2.
3.
4.
5.
Page 18 of 26
General Pension Fund ConsultantRequest for Proposal
C. Personnel16. For the investment consulting arm of your business, provide:
a. the number of professionals involved in the area shown on the table.b. the number of key professional personnel lost for the past 3 years.
Job FunctionProfessional
Number of Personnel
Turnover
Client relationship managers (consultants) Data processing Legal Manager search (database) personnel Marketing Performance evaluation technical personnel Research Support services Other
TOTAL Note: Please disclose information on professionals that may serve in more than one of the functional area.
17. For the Primary and Backup personnel assigned to the LACERS account:Provide the names, their titles, and their biographies which include: educational qualifications, professional affiliations, and their investment performance of pension plans, which they had investment discretion of, for which they provided consulting services. Disclose which office location they primarily are assigned to. Also, provide additional information using the format below:
Name of Primary and Backup Primary (P) or Backup (B)?
Title
Total Number
of Accounts Assigned
Years with Firm
Years of Institutional Consulting Experiences
1.
2.
3.
18. For the Primary and Backup personnel assigned to the LACERS account:Provide the client name, plan type (such as: Defined Benefit, Defined Contribution, Endowment, etc.), length of relationship, and asset size using the format below:
Name of Primary and Backup Client Name Plan TypeLength of
Relationship (in Yrs)
Client’s Asset Size ($000)
1.
2.
3.
4.
5.
Page 19 of 26
General Pension Fund ConsultantRequest for Proposal
19. What policies are in effect to control the workload as it relates to the number of clients serviced by each consultant/relationship manager? Is there a limit on the number of accounts that a consultant/relationship manager may handle? What is the average number of accounts per consultant?
20. Describe the firm’s compensation and incentive program for hiring and retaining key consultant personnel. How does the firm tie client performance and satisfaction to a consultant’s compensation?
D. Standards of Conduct21. a. Disclose any relationship you have or have had with any LACERS Board member,
consultant, or LACERS employee. If there are no conflicts of interest, please state, “There are no conflicts of interest to report.” Briefly describe your philosophy relating to the consultant’s relationship with Board member, staff, investment managers, and brokers.
b. Disclose any gifts (meals, tickets, anything of value over $50, etc.) that you have given to any LACERS Board member, consultant, or LACERS employee in the last 12 months. If ‘Yes’, please disclose them using “Gift Disclosure Form” (see Exhibit C).
22. Do you have any written policies or procedures to address conflicts of interest, including (but not limited to) the payment of fees or other consideration from other clients, relationships, or entities that may compromise your fiduciary duty to your clients? If so, please provide a copy.
23. For the past 10 years, has the firm, its officers or principals or any affiliate ever:a. been the focus of a non-routine Securities and Exchange Commission (SEC) inquiry
or investigation or a similar inquiry or investigation from any similar federal, state or self regulatory body or organization,
b. settled any litigation concerning breach of fiduciary responsibility or other investment related matters, or
c. submitted a claim to your error & omission, fiduciary liability and/or fidelity bond insurance carrier(s)?
If ‘yes’, please provide details and the current status of proceedings.
24. Does the firm keep a record of all manager recommendations made to plan sponsor clients? What percentage of manager turnover occurs during a normal year for your plan sponsor clients?a. How are consultants’ recommendations to clients reviewed and monitored by your
organization?b. Does the firm adhere to a level of consistency in consultant recommendations?
25. Has the firm adopted the CFA Code of Ethics and Standards of Professional Conduct? If so, how is employee compliance monitored?
Page 20 of 26
General Pension Fund ConsultantRequest for Proposal
26. Does the firm hold or sponsor investment manager or client conferences? If yes, describe such events occurring in the last year, their usual frequency, and whether the costs of such events are borne by the firm or event attendees?
E. Investment Policy and Asset Allocation27. a. Describe your public pension fund experience and approach in developing and
monitoring, and updating investment policies and objectives for a diversified pension fund.
b. Comment on your process for analyzing a client's portfolio structure, for recommending modifications, and frequency.
28. What is your firm’s philosophy or view on:a. active vs. passive investment management? b. commingled vs. separate accounts?. c. asset-based vs. performance-based fees for managers?
29. Describe any style preferences, biases or reasons your firm has towards:a. value vs. growth investingb. large vs. small cap investingc. non-US investmentsd. emerging markets investmentse. real estatef. private equityg. hedge fundsh. commodities such as: timber, agriculture, oil and gasi. corporate governance investing.j. opportunistic debt investing.
30. Describe the firm’s capability and experience in conducting asset-liability studies. How should a defined benefit plan’s liability structure, funding level, and changes in the contribution level be incorporated in the asset allocation decision?
31. Describe your firm's theory, methodology and process in customizing asset allocation studies for individual clients, including integration of various forms of risks, liabilities and funding. How often does your firm recommend reviewing asset allocation?
32. In light of what happened to the market in 2008, has your methodology to asset allocation for your client changed? If ‘yes’, please describe.
33. What approach do you use to determine optimal asset allocation?
34. What systems will you make available to LACERS staff to evaluate "what if" asset allocation scenarios?
Page 21 of 26
General Pension Fund ConsultantRequest for Proposal
F. Manager Database & Search35. Describe your experience and capabilities in conducting searches for investment advisors
and other investment services.
36. For the past 3 years, what type and how many searches did you conduct for clients with over $5 billion in assets for each year? How many different managers were recommended in each asset category, i.e.: US Equity, International Equity, US Fixed Income, International Bonds, Commercial Mortgages, Real Estate, Alternative Investments, Hedge Funds, Other asset class, and Other investment services?
37. Describe your database that is used for manager searches.a. How many managers do you maintain on your manager search database?b. Is your system purchased or proprietary?c. How do you gather, verify, analyze, and update manager information? How
frequently? How many years of performance data is on the system, and are simulated returns included?
d. How do you categorize managers? List manager styles, characteristics that distinguish each style in your classification system, and include concise definitions.
e. What criteria do you use in evaluating managers?
38. Discuss benchmarks and peer group. How is risk factored into this analysis?
39. Discuss how you optimize the number and types of managers and how you assess the effect of including new managers. Discuss any statistical analysis that is performed.
40. Briefly describe how a new client would transition to your firm. Do you backload transaction and/or investment performance data? What problems have you encountered in transitioning a new client to your firm from their previous consultant? Please provide at least one reference (name, fund name, address, phone, email) of a recent client of yours whom we can contact regarding the transition process.
41. Provide one example of a written recommendation to hire, and one recommendation to terminate a manager that you have made within the last 12 months. Include copies of supporting documentation you provided to your client. At what point would the firm recommend terminating an investment manager?
G. Other42. Please describe your emergency preparedness and backup office/computer system plans.
Have you ever had to activate any parts the plan? If so, describe the effectiveness of the plan and any post-activity modifications to that plan.
43. Describe how the firm implements and uses the latest technology, and how such technology adds value to the firm’s clients. What internet technology do you provide to your clients?
Page 22 of 26
General Pension Fund ConsultantRequest for Proposal
44. Provide a list of any research reports that were prepared for your clients or the investment industry in the last 3 years using the format below. Include the topic of the research or article, and the name of the publication (and date) where it appeared. Include a sample.
Topic of the research or articles for Year 2009 Name of publication Publication date
Topic of the research or articles for Year 2008 Name of publication Publication date
Topic of the research or articles for Year 2007 Name of publication Publication date
45. Include a sample of your firm's standard reports and any other kinds of report samples. Do reports include an executive summary? If so, please include a sample.
Page 23 of 26
General Pension Fund ConsultantRequest for Proposal
EXHIBIT C
CITY REQUIRED FORMS
Proposals not including these completed forms/documents will be considered non-responsive, and cannot be considered for contract.
Provide all original completed forms/documents in the proposal copy marked “Original” and place photocopies of these completed forms in the remaining RFP response binders.
The forms are: 1. Third Party Marketing and Referrals Disclosure Form
2. Gift Disclosure Form
3. Affirmative Action – can be found at www.lacers.org
4. Bidder Certification Form CEC 50Note: LA Municipal Code § 48.02 can be found on the web at:
