Strategic Investment Solutions, Inc. - · PDF fileStrategic Investment Solutions, Inc. 333...

INVESTMENT CONSULTING PRESENTATION TO

STANCERAEducation WorkshopNOVEMBER 17, 2009

Strategic Investment Solutions, Inc.333 Bush Street, Suite 2000San Francisco, CA 94104(415) 362-3484

Paul S. Harte Vice President

Organization Overview

Page 3Strategic Investment Solutions, Inc.

Our Company

Founded in 1994

Employees Currently Total 25, Including 23 Investment Professionals

Broad, Diversified Ownership: Fosters Stability

Small, Focused Organization (Approximately 25-30 Employees)

40 General Consulting Retainer Client Limit

Stable Staff – Lost One Founder Since 1994

Retainer Clients Currently Total 33

Focus on Limited Number of Large, Sophisticated Clients, Local Charities

16 Public, 12 Corporate, 2 Endowment/Foundation, 3 High New Worth

Over $700 Billion in Assets Under Advisory

Extremely Stable Client Base

Business and Consulting Philosophies Have Not Changed Since Inception

Commitment to Intellectual Freedom and Innovative Solutions to Client’s Unique Needs

Primary Focus on Risk Management, Manager Research and Cost Containment

Accept Status as Co-Fiduciary

No Other Sources of Revenue/Distractions/Conflicts of Interest


What SIS Does Best

Strategic Asset Allocation. Keys are successful dynamic capital markets process and precise, sophisticated projection capability.

Manager Structure. Keys are accurate style determination, establishing link between objectives and resulting risk postures.

Manager Research. Keys are consistent, long-standing involvement in manager research effort.

Cost Containment. Keys are independence, large client focus, and client advocacy.

Modeling Capabilities/Customization. Keys are experienced model builders, access to relevant data and understanding of market interactions.


Consulting Services

STRATEGIC PLANNING Asset AllocationAsset/Liability AnalysisPolicies, Guidelines & Objectives DevelopmentManager Structure Analysis

IMPLEMENTATION Manager SelectionMaster Trustee Selection“Gatekeeper” SelectionManager Reviews

PRIVATE MARKETS/ALTERNATIVES Sub-sector Asset AllocationPolicies and Procedures DevelopmentLimited Partnership Selection and MonitoringPerformance Reporting and Cash Flow ManagementPost-Venture Distribution Manager SearchMarket UpdatesOther Alternative Investment Manager Search

PERFORMANCE MEASUREMENT Return CalculationsManager and Plan Level ComparisonsDomestic and International Performance AttributionCharacteristic Reviews

SPECIALIZED SERVICES Educational WorkshopsManager Fee NegotiationsTransition ManagementClient-Directed Research


Our People

BARRY DENNIS MICHAEL BEASLEY

JOHN MEIER, CFA

PETE KELIUOTIS, CFA

Managing Directors

PATRICK THOMAS, CFA PAUL HARTE

Vice Presidents

TO BE HIRED Senior Consultant

GENERAL CONSULTANTS

ANNE WARD Director

HELEN LAM Senior Investment Analyst

ELAINE GEE SAMSON CHAN

JING CHEN PETER CHONG Investment Analysts

MICHAEL BEASLEY PETE KELIUOTIS, CFA

Managing Directors

CURT SMITH, CFA Director

STEVE HEMPLER

HARSHAL SHAH, CFA FARAZ SHOOSHANI

Vice Presidents

LISA KELIUOTIS MYDUNG DO

Investment Analysts

PERF. MEASUREMENT

JOHN MEIER, CFA Managing Director

MARC GESELL, CFA Vice President

QUANTITATIVE PRIVATE MARKETS

DEBORAH GALLEGOS Director

PATRICK THOMAS, CFA PAUL HARTE

JONATHAN BRODY, CFA

STEPHEN MASARIK, CFA Vice Presidents

JONATHAN HARTMANN Investment Analyst

MANAGER RESEARCH

LOU KINGSLAND, JR. Chair and Strategic Advisor

BARRY DENNIS JOHN MEIER, CFA MICHAEL BEASLEY

PAUL HARTE PATRICK THOMAS, CFA PETE KELIUOTIS, CFA

INV. POLICY COMMITTEE

EMMANUEL CANTERAS Vice President

MELISSA NORIEL Administrative Assistant

ADMINISTRATION


SIS INVESTMENT PROFESSIONALS

INVESTMENT YEARSEXPERIENCE PREVIOUS ORGANIZATIONS WITH SIS

MICHAEL BEASLEY 36 Merrill Lynch, Callan 15

BARRY DENNIS 34 Continental Illinois Bank, Callan 15

JOHN MEIER, CFA 19 BARRA 15

PETE KELIUOTIS, CFA 20 Northern Trust, Hotchkis & Wiley, Mercer 8

PAUL HARTE 23 Leylegian, Montgomery, Merrill Lynch 11

LOU KINGSLAND, JR. 37 NASA, Wilshire, Callan, Mellon Capital 15

PATRICK THOMAS, CFA 19 McKesson, Merrill Lynch 12

DEBORAH GALLEGOS 19 New York City Retirement, New Mexico State

Investment Council, JP Morgan 2

ANNE WARD 20 Wells Fargo Nikko, Harris Bretall 15

CURT SMITH, CFA 25 Union Bank of California 12

FARAZ SHOOSHANI 11 California Institute of Technology, Catapult Ventures 3

MARC GESELL, CFA 13 First Interstate Bank (now Wells Fargo) 10

STEVE HEMPLER 14 Providian Financial Corp., Chevron 11

JONATHAN BRODY, CFA 12 Mpower, Franklin Templeton 6

HARSHAL SHAH, CFA 18 Fremont Investment Advisors, Wells Capital 5

LISA LEUNG 13 Credit Suisse, PaineWebber/UBS, CheckFree Systems 6

HELEN LAM 27 Fremont Investment Advisors, Barclays Global 7


Principal Consultant to StanCERA

Paul Harte

Twenty-three years of institutional investment experience, more than half of which directly consulting to plan sponsors.

Named Consultant of the Year, 2009, Money Management Letter’s 8th

Annual Public Pension Fund Awards For Excellence

Relevant experience consulting to public pension plans, including SJCERA, State of Oklahoma and State of New Jersey.

General Investment Consultant, Transition management specialist, DC consulting specialist, and Manager Research.

Currently serves as consultant to Idaho Community Foundation, Oklahoma Public Employees Retirement System, State of New Jersey, San Joaquin County Employees Retirement Association, Stanislaus County Employees Retirement Association, Southern Company, and PacifiCorp.


Our Clients

RETAINER CLIENTS $ MILLION

Alameda County Employees Retirement Association 5,000Boise Cascade/Office Paper Holdings 1,000 Buck Trust/Marin Community Foundation 1,000CalPERS 250,000Conway Inc. 4,000Cox Enterprises 2,300Family Trusts 1, 2, 3 and 4 N/AFirst Data Corporation 1,000Idaho Community Foundation 50Indiana Public Employees Retirement Fund 14,000Kentucky Retirement Systems 18,000Lurie Company and Foundation 120New Jersey State Treasury 85,000New York City Police Pension Fund 24,000New York State Common Fund 150,000North Carolina Dept. of State Treasurer 70,000Oklahoma Public Employees Retirement System 6,000Oregon Investment Council 60,000PacifiCorp 3,100Pinnacle West 1,200San Joaquin County Employees Retirement Association 1,700San Jose Federated City Employees Retirement System 2,600San Mateo County Employees Retirement Association 1,900Southern Company 12,000Stanislaus County Employees Retirement Association 1,200Sutter Health 5,500Syracuse University 1,600Tennessee Consolidated Retirement System 29,000The Williams Companies 5,300Wisconsin State Investment Board 82,000

PROJECT CLIENTS ASSIGNMENT

Alcon Laboratories DC Manager Structure, SearchAmeritech Corp. Manager SearchArizona Public Service AL Study/Manager SearchAutomobile Club of So. California A/L StudyCentral Bank of Chile Manager SearchesColorado Public Employees Trustee EducationConsolidated Freightways A/L StudyCounty of Orange Strategic StudyGenentech Inc. Strategic PlanningHewlett Foundation Intl Manager SearchHouston Police Officers Pension Manager Structure StudyHoward Hughes Medical Manager Structure and SearchIllinois State Investment Board Manager StructureIllinois State Universities Ret Sys Private Markets ConsultingKaiser Permanente Asset TransitionLos Angeles County Interim General ConsultingLoyola University Private Markets ConsultingNortel Networks A/L Study, Manager StructureOhio PERS A/L Study, Strategic PlanningOregon Investment Council Co-Investment SearchPG&E MWDVBE Manager SearchRoche (Palo Alto) Manager Structure StudySan Jose City Employees Manager SearchSwedish National Pension Fund 6 Private Markets ConsultingTexas Utilities AA Study/Mgr Structure/SearchUniversity of British Columbia Private Markets Consulting


The Consultant’s Role

Work together with Staff to help the fiduciary body (StanCERA) make sound policy and implementation decisions

Consultant provides first-hand experience with similar investors and knowledge of industry “best practices”

Consultant provides historical data on capital markets and managers to support decisions, as well as insights on how to use and interpret data

Consultant should add value in four key areas:

Strategic Planning (Asset Allocation and Policy)

Asset Class Structure

Manager Sourcing, Selection, and Oversight

Cost Containment: We Seek to Pay for Ourselves

Consultants must be objective — they are fiduciaries

Risk is manageable, returns are not

Human Nature Risk is the most difficult to manage


Risk Management Approaches

Human Nature Risk

Total Fund Risk

Liability-Driven Analysis at Appropriate Horizon

Trade-Off Median Versus Worst Case Outcomes (Return vs. Risk)

Asset Class Risks

Reduce or Eliminate Unintended Risks

Balance Net Alphas Versus Tracking Error

Risk of Overpaying

Fewer Managers, Larger Assignments

Pay for Alpha, not Beta

Uncover Hidden Costs

Implementation Strategies


Investment Policy Today

Current Investment Climate

Huge deterioration in pension plan funded status

Volatile capital markets

Illiquidity challenges still prevalent

More stringent regulatory environment likely

Key Elements to Investment Policy:

Establish strategic (long-term) asset allocation targets and investment guidelines

Develop tactical (short-term) strategy to consider market environment and take advantage of available opportunities

Continued monitoring and evaluation

Disciplined but intelligent approach to rebalancing

Asset Allocation


Plan Management Framework


Asset Allocation Principles

Dynamic Process Designed to Enhance the Long-Term Return and Risk Profile of a Multiple Asset Class Portfolio

Portfolio Management at its Highest Level

Risk Management at its Most Fundamental Level

Greatest Impact on Long-Term Variability of Total Fund Returns

Combines Long-Term Objectives with Short-Term Opportunities

Seeks to Address Three Primary Risks:

Asset Shortfall Risk Liquid assets insufficient to meet current obligations due to lack of growth, capital losses, or inadequate short-term liquidity

Interest Rate Risk: Changes in NPV of liabilities related to change in interest rates

Inflation Risk: Changes in NPV of liabilities related to changes in inflation


SIS Capital Markets Expectations Process

Strategic Purpose - Horizon = 2 to 3 Market Cycles

Building-Block Approach

Based on CAPM ⎯ Investor Must Be Compensated for Taking Higher Risk

Long-Term Real Return Corridors, Combined with Mean Reversion

Qualitative Overlay ⎯ Reasonable Portfolios and a “Stable Frontier”

Data Sources/Return

Blue Chip Economic Forecast (Inflation, GDP Growth Estimates)

Global Manager and “Sell-Side” Forecasts

CAPM (Equity Asset Classes)

Historical Data

Correlations ⎯ Most Stable (90-Month Half-Life, 1985 to Present)

Risks ⎯ Stable; Two-Factor Model


SIS Capital Markets Expectation Methodology

Inflation Consensus of economists’ forecasts, TIPS

Cash Inflation + 1% to 2% premium

US Large Cap CAPM, 3% to 6% equity premium, macroeconomic DDM

US Small Cap CAPM, (beta of ~1.2)

Private Equity CAPM, (beta of ~1.6)

US Fixed Yield to Worst on Aggregate Index (compare to historic bond risk premium); adjusted for client’s duration target and unique sector allocations

International Equity Weighted sum of local market premium + local risk free rate

International Bond US fixed return, adjusted for Quality and Duration (currency effects based on PPP)

Real Estate Historical behavior of equity REITs; current appraisal cap rates; CAPM; adjusted for client’s portfolio structure (core/value added/opportunistic)

Hedge Funds Expected net premium to LIBOR (3-4%); 0.40 Sharpe Ratio

High Yield Historical ratio: spread of High Yield over US Fixed Income divided by spread of Large Cap over US Fixed Income

Infrastructure Based on the MSCI ACWI Infrastructure Index; return, risk, and correlations adjusted for client’s infrastructure program characteristics

Commodities Expected return is inflation plus a premium based on the historical spread between the return to a commodity and the return to a futures index on the same commodity. Risk and correlation based on S&P GSCI Index.

Opportunity Portfolio Depends on role of portfolio; may use Total Fund covariance matrix.


Asset Allocation: Role in Hedging Risks


SIS Capital Market Projections (5/2009)

CATEGORY PROXY EXP. RETURN EXP. RISK

U.S. INFLATION CPI 2.5 ---

U.S. LARGE CAP STOCK Russell 1000 9.4 17.0

U.S. SMALL CAP STOCK Russell 2000 9.9 21.0

U.S. FIXED INCOME Barclays Aggregate 4.5 4.5

INT’L DEVELOPED STOCK MSCI EAFE 9.4 18.0

EMERGING MARKET STOCK MSCI EM 9.9 28.0

REAL ESTATE NAREIT 6.9 12.0


STANCERA Current Target Mix

ASSET CLASS TARGET PORTFOLIO

US LARGE CAP EQUITY 37.1%

US SMALL CAP EQUITY 9.3%

TOTAL US EQUITY 46.4%

INT’L DEVELOPED EQUITY 16.0%

EMERGING MARKETS EQUITY 4.0%

TOTAL NON-US EQUITY 20.0%

US FIXED INCOME 32.1%

REAL ESTATE 1.5%

CASH 0.0%

TOTAL EXPECTED RETURN 8.32%

TOTAL EXPECTED RISK 11.45%




Manager Structure Principles

Implementation of Asset Allocation

Objectives: Diversification and Risk Control

Risk Management/Budgeting Approach

Combination of Active and Passive Styles

Index Funds Will Generally Be Median Performers in Appropriate Peer Groups

Fewer Managers Is Better

Diversify Managers Across Investment Styles and Risk Profiles

Maintain Style Neutrality Over Time

Be Opportunistic


Manager Structure - STANCERA

100.0Total STANCERA Portfolio

1.5Global REITsINVESCO

32.1Total Fixed Income

0.0Low Correlation -D&C FI Manager #2

32.1Core/Core PlusDodge & Cox Fixed

20.0Total Non-US Equity

10.0Non-US ValueLSV

10.0Non-US GrowthPyramis

46.4Total US Equity

4.3Small Cap GrowthLegato

5.0Small Cap ValueCapital Prospects

5.9Large Cap GrowthLoomis Sayles

8.9Large Cap GrowthDelaware

3.0Large Cap ValueBGI R1000V Index

14.570% LCV / 30% LCGDodge & Cox Equity

4.8Large Cap CoreBNY S&P 500 Index

TargetStyleManager

Manager Research and Monitoring




Manager Research Principles

Flexible in Working with Clients in Sourcing/Selection/Monitoring

Size MattersAverage Placement > $200mLarge Clients and Placements => More Power in Negotiating Fees

Implementation of Manager Structure

Evaluate Risk As Well As Return

Understand the Source of Excess Return

Recognize Style Within Styles

Willingness to Recognize New Firms and New Products

Opinions for Clients ⎯ Not Managers


Common Traits of Top Tier Investment Managers

Stability

Independence

Risk Management

Integrity

Client Service

But most important of all…

Alignment of Interests


US Public Markets: Long-Term Perspective

CyclesEconomicStock MarketsAvailability of Credit/Interest RatesPolitical, Economic and Security Conditions

The direction of change may be logical but the magnitude is usually extreme, and the duration is unknown.

Growth Stocks – Late 60’s, Early 70’s, Late 90’s — Next?PC Stocks – Mid 80’s, Late 90’sConglomerates – Late 80’sBiotech Stocks – Early 90’sGambling Stocks – Mid 90’sDot Coms/VC – Late 90’sGold Stocks – Mid 70’s, 2005-2007?Energy Stocks – Late 70’s, 2005-2007?Housing Market — Late 80’s, 2000-2006Value Investing — Late 80’s, Early 90’s-CurrentReaching for Yield/Leverage/Mega-Buyouts — 2002-2007De-Leveraging/Re-Pricing of Risk – 2007-?

Investment cycles do not last forever and are always self-correcting


Performance Evaluation and Monitoring

Interpretations by Highly Experienced Professionals

Founding Member of CIPM Advisory Council

Data/Information from Multiple Sources

ICC/State StreetInsignisBARRAMPIInternal Attribution Analysis

Focus on Risk Versus Benchmark/Peers/Policy Benchmark

Customized Exhibits/Presentations/Summaries

Database Credibility/Flexibility

ICC Universe Used by Federal Reserve Bank to Monitor Pension Funds1,472 Plans, 22,426 Portfolios, $2.2 Trillion Market Value at 12/31/2007

Hands-On Solutions to Problematic Situations


Benefits of SIS Consulting Relationship

Client FocusOur Clients Come First

We Readily Accept Fiduciary Status

Stability of Clients and Professionals

Effective and Frequent Communication

Relevant ExperienceLong Experience with Investing on Large Scale

Long Experience Consulting to Not-for-Profit Plans

Helping Clients That Face Similar Challenges

Traditional and Alternative Investment Manager Research

Independence/ObjectivityNo Other Sources of Revenue/Distractions/Conflicts-of-Interest

No Inbred Biases ⎯ Each Client Is Unique

Leave Egos at the Door

Highest Ethical Standards

Focus on Risk Management/PerformanceTotal Fund and Individual Asset Class Perspective

Strategies Are Specific to Each Client

Appendix


Professional Biographies

PAUL S. HARTE. Vice President. Responsible for investment manager research and general consulting. Fifteen years of investment experience. Served as Senior Portfolio Manager at Leylegian Investment Management. Also served as financial analyst at Montgomery Financial Services Corp. and as a registered sales assistant at Merrill Lynch. B.A. in History and M.B.A. in Finance from New York University.

MICHAEL R. BEASLEY. Managing Director. Co-founded Strategic Investment Solutions, Inc. (SIS) with Barry Dennis in 1994. Former EVP and Head of Consulting of Callan Associates, which he joined in 1986 and left in 1993. Founded Callan’s Atlanta Office in 1986 and concurrently managed its New York Office in 1988. Served as Chairman of Callan’s Manager Search Committee for two years. Brings 30 years of consulting and institutio-nal investment experience to SIS. Prior experience includes 13 years with Merrill Lynch’s Capital Markets Group in Jackson-ville and Atlanta. Former Editorial Board member of the Journal of Pension Plan Investing. Frequent speaker on institutional investment issues. Graduate ofthe New Mexico Military Institute and an officer of the U.S. Army for five years that included a combat tour of duty in Vietnam.

BARRY W. DENNIS. Managing Director. Co-founder of SIS and responsible for the firm’s consulting practice. His 28 years of investment experience has been focused on helping plan sponsors achieve their financial goals. Barry was a Senior Consultant and Western Region Manager for Callan Associates from 1983 to 1994, prior to founding SIS. Previously, he was an Investment Officer with Continental Illinois National Bank. Barry has a B.A. in English from the University of Wisconsin and an M.B.A. in Finance from The Keller Graduate School of Management.

JOHN P. MEIER, CFA. Managing Director and Head of Quantitative Services. Highly experienced specialist in strategic planning, capital markets analysis, and quantitative investment strategies. A leading authority in the fields of perform-ance benchmarking and portfolio perform-ance attribution, whose ideas have been published in Pensions and Investments, Futures, Risk and Quantitative International Investing. Senior Product Manager at BARRA from 1988 to 1994, responsible for equi-ty risk and valuation models and services. B.S. in Chem. Eng. From Michigan State, MBA in Finance from UC Berkeley.

PETE A. KELIUOTIS, CFA. Managing Director. Leads SIS’s private equity consulting effort; member, Board of Directors. Fifteen years of consulting experience and twenty years in the investment industry. Former senior consultant and Principal at William M. Mercer. Member of its Global Research & Policy Committee. Helped run Mercer’s Chicago office. Prior to joining Mercer, Pete worked for Hotchkis and Wiley, with performance measurement, fixed income research, and bank reconciliation duties. His earlier position was as a team leader in the corporate trust accounting area of Northern Trust Company. B.A. in Economics from the University of Illinois – Urbana. MBA in Analytic Finance and Accounting from the University of Chicago. Pete is a CFA and a member of the CFA Institute and the CFA Society of San Francisco.

PATRICK F. THOMAS, CFA. Vice President. Primarily responsible for general and private equity consulting at SIS. Served as Senior Analyst for McKesson Corporation from 1992 to 1996 responsible for all aspects of portfolio analysis of the company’s combined $1.2 billion Retirement Plans, ESOPs and Foundation. Performed corporate financial analysis and acted as Corporate Cash Manager during tenure at McKesson. Served as analyst for Wells Fargo Inves-tment Advisors (now Barclays Global) and assisted the floor brokers for Merrill Lynch on the Pacific Stock Exchange Options Floor. B.A. in English UC Berkeley, M.B.A. Georgetown University. Member, AIMR and of the Securities Analysts of San Francisco.

LOUIS KINGSLAND, JR. Adviser and Chair, Investment Policy Committee. Developed first commercially available asset allocation and liability simulation model and asset mix optimizer, both still widely used today. Most recently EVP of Mellon Capital Management. Graduate, Air Force Academy. MA in Engineering, CalTech. Served as Deputy Mission Director of The Viking Space Project, and received a Distinguished Service Medal from NASA.


Professional Biographies

DEBORAH E. GALLEGOS. Director of Investment Manager Research. Most recently Chief Investment Officer of the New York City pension systems. Supervised City’s five pension systems totaling $90 billion in assets. Former Deputy State Investment Officer for the New Mexico State Investment Council. Served as Vice President at JP Morgan Fleming Asset Management in New York City, where she worked for its Global Emerging Markets Fund, and associate at Morgan Stanley & Company’s Latin America equity research group. MBA in Finance and BA in Political Economy from the University of California, Berkeley.

CURT SMITH, CFA. Director of Private Markets. Twenty years of experience as a private markets and alternative investments specialist. Formerly VP and Manager of Private Market Assets at Union Bank of California, where he was responsible for the review, valuation and management of distressed securities, LBO, futures and real estate funds. B.S. Economics and MBA in Finance from University of San Francisco. Past President, Society of Securities Analysts of San Francisco.

HARSHAL R. SHAH, CFA. Vice President. Responsible for private markets consulting, due diligence, and research. Six years of consulting experience and seventeen years of investment experience. Most recently co-portfolio manager and senior analyst for Fremont Investment Advisors, co-managing the New Era Value Fund. Also served as senior research analyst for Wells Capital Management for financial, energy and telecommunications sectors; and international trust fund accountant for Capital Guardian Trust Company. B.A. in Finance, California State University at Fullerton. Chartered Financial Analyst.

FARAZ SHOOSHANI. Vice President. Responsible for private equity consulting, due diligence, and research. Five years of consulting experience and fifteen years of institutional investment experience. Formerly Associate Director of Invest-ments at Caltech. Founded Catapult Ventures, a consulting company that helped IT startup companies. Also served as senior revenue analyst at Intel Corpo-ration for its Profit and Loss Group, and consultant at Booz Allen Hamilton. MBA, Yale School of Management. B.A. Economics, UC Berkeley.

STEVEN C. HEMPLER. Vice President. Responsible for private equity consulting, due diligence, and research. Ten years of consulting experience. Formerly Senior Cash Analyst at Providian Financial. B.A. in Business Administration and Accounting, California Polytechnic State University. Former Officer, United States Army.

ANNE K. WARD. Director of Measurement Systems. Eighteen years of investment experience. Formerly Portfolio Manager for Wells Fargo Nikko, handling passive domestic non-S&P 500 equity index strategies for commingled funds. Served as Perform-ance Analyst for Harris Bretall Sullivan & Smith. Brought Harris Bretall’s 22-year old measure-ment systems and historical data up to speed with AIMR reporting standards. B.S. Accountancy, University of Illinois—Urbana. MBA in Finance, University of San Francisco.

MARC GESELL, CFA. Vice President. Quantitative analysis, statistical research, and systems deve-lopment specialist responsible for strategic planning. Seven years experi-ence in software R&D, asset allocation modeling, and investment analysis. Most recently AVP and portfolio manager for First Interstate Bank (now Wells Fargo), responsible for managing $200 million in private client portfolios. Helped establish clients’ strategic plans, investment objectives, asset allocation mixes, and portfolio structure. B.S. in Computational Mathematics, Arizona State University, MBA in Finance, San Francisco State University, Chartered Financial Analyst. Former Officer, United State Army.

JONATHAN BRODY, CFA. Vice President. Responsible for investment manager research and has eight years of experience in the investment industry. Formerly Senior Manager Research Analyst at Mpower Advisors. Previous to that was an Equity Research Analyst at Franklin Templeton. M.A. and Ph.D. in Philosophy from Johns Hopkins University. B.A. in Philosophy, Reed College.

LISA LEUNG. Private Markets Analyst. Primarily responsible for providing performance measurement services and private markets due diligence. Investment Analyst with SIS. Previously investment analyst with CheckFree Systems and PaineWebber/UBS. B.A. in Economics from New York University. CFA Level I Candidate.


Code of Ethics

SIS will consider plan participants and their beneficiaries to be our client, and our consulting services will be directed toward their sole benefit.

Our consultants and professional staff will remain cognizant of the fact that we are advising fiduciaries and, therefore, have a fiduciary responsi-bility to act solely in our clients’ best interests.

SIS, and its employees, will not accept fees from investment managers for any service whatsoever.

SIS will accept only cash payments from its clients.

SIS will not manage client assets, directly or indirectly.

SIS, and its employees, will not accept “finder’s fees” or financial rewards that are dependent on our clients’ procurement decisions.

Our employees will refrain from discussing confidential client inform-ation with anyone other than the client or SIS employees who have a need to know. Discussing facts about a client’s fund, using a client’s name in promotional materials or communications intended for public consumption without the client’s permission shall be forbidden.

Our employees are strictly prohibited from acting on any insider information they may be privy to. Each employee will quarterly submit a list of transactions executed in the prior quarter and a complete list of holdings as of year end to the Compliance Officer.

Enforcement. Violation of any of the above could result in immediate termination of the offending employee.


SIS Consulting Support Partners

State Street Bank/ICC “Live” manager and plan sponsor performance histories, US equity and fixed income performance attribution, portfolio characteristics and comparisons

eVestmentAlliance Investment manager database

BARRA International and US Equity (E3) models; risk exposures and performance attribution

MPI Manager portfolio/style analytics

Morningstar Direct Mutual fund information

Private i Private markets database

VentureXpert Private markets database

Mstar/AltVest Hedge fund database

Micropal Analytics, index information

Bloomberg Securities pricing data


SIS Private Markets Group

SIS has provided private markets consulting services since its founding

Exclusive focus on non-discretionary consulting services

Objective advice, free of conflicts: no fund-of-funds product

Important to look at private markets within a Total Fund context

Active in secondary market for both buys and sells

Ten-person Private Markets Consulting group

Controlled growth: clients and staff

Flexible: direct partnership investing and fund-of-funds placements

Work with large, sophisticated private markets investors

16 retainer private markets clients, in various stages of program maturity

Current commitments total over $15 billion

Private markets consulting philosophies

Provide objective, non-discretionary advice free of conflicts

Customized investment solutions

Risk management and thorough diligence is key, but don’t over-diversify


Non-Private Markets Alternative Investment Consulting

Primary Focus on Funds-of-Funds, Institutional Quality Multi-Strategy Funds, and Targeted Strategies (e.g., Corporate Governance, Distressed Credit, etc.)

Strategies Often Included in Opportunity Pools (Difficult to Categorize)

Involvement of Six Consultants and Eight Senior Research Professionals

Assistance in Placing Over $5 Billion Across Multiple Clients

Assistance With Separate Account Advisor Searches for Single Strategy Programs

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