Investment Consultant RFP

State Universities Retirement System of Illinois (SURS) Request for ProposalPortfolio Equity Index Option Overlay Search2015 Table of ContentsI. Request For Proposal Summary Statement 3II. Background Information 3III. Specific Services Requested from the Investment Manager 5IV. Diversity Goals 6V. Minimum Qualifications 6VI. RFP Specifications 7VII. Projected Schedule of Events 9Appendix A Minimum Qualifications Certification 10Appendix B Disclosures per Illinois Pension Code Section 1-113.21 12Associated DocumentsPortfolio Equity Index Option Overlay Manager Questionnaire (Word Doc) (See Attachment)2 State Universities Retirement System (SURS) Request for Proposal (RFP) October 2015Portfolio Equity Index Option Overlay Manager Search I. RFP Summary Statement The State Universities Retirement System (“SURS” or the “System”) is requesting proposals from qualified firms interested in providing Portfolio Equity Index Option Overlay Investment Management Services (“Proposers”). The purpose of this allocation is to generate incremental income from writing put and call options on SURS existing equity exposure, consistent with existing SURS policy ranges and rebalancing practices. All forms/required documents needed for submitting a Request for Proposal (“RFP”) are available on the IL SURS website at www.surs.org. Respondents must answer all applicable questions in the questionnaire sections in order to be considered.II. Background Information Agency Description SURS is the administrator of a cost-sharing, multiple employer public employee retirement system. SURS membership includes employees of the Illinois public universities and other affiliated organizations. Currently, SURS membership totals more than 200,000 active, inactive and retired participants. SURS maintains both a defined benefit plan (DB plan) and defined contribution plan. Proposals are being solicited for the defined benefit plan. To learn more about the fund, you may visit our website at www.surs.org. Defined Benefit Plan Investment Program As of June 30, 2015, the DB plan trust totaled $17.4 billion with a target asset allocation as follows:Target U.S. Equity 23% Non-U.S. Equity 19% Global Equity 8% Core Fixed Income 19% Emerging Markets Debt 3% TIPS 4% Private Equity 6% Real Estate 6% REITS 4% Hedged Strategies 5% Opportunity Fund 1% Commodities 2%3 Legislated Investment Restrictions Effective January 1, 2016, Section 1-110.16 of the Illinois Pension Code (40 ILCS 5/1-110.16) generally requires SURS to divest from direct holdings in “restricted companies” consisting of:1. Certain companies that boycott Israel by engaging in actions that are politically motivated and are intended to penalize, inflict economic harm on, or otherwise limit commercial relations with the State of Israel or companies based in the State of Israel or in territories controlled by the State of Israel;2. Certain companies that have business operations that involve contracts with or provision of supplies or services to the Government of Iran, companies which the Government of Iran has any direct or indirect equity share, consortiums or projects commissioned by the Government of Iran, or companies involved in consortiums or projects commissioned by the Government of Iran; and3. The government of Sudan and any of its agencies, companies under control of Sudan, companies established or organized in Sudan, companies identified or prosecuted by the Office of Foreign Assets in the U.S. Treasury Department as sponsoring terrorist activities in Sudan, or any publicly traded company whose principal place of business is in or conducts business in Sudan.Investment managers seeking consideration for this mandate should be familiar with and agree to comply with these provisions of the Illinois Pension Code.State Fiduciary, Ethics, and Diversity Laws Sections 1-109, 1-109.2, 1-110, 1-125. 1-130, 1-135, and 1-145 of the Illinois Pension Code (40 ILCS 5/1-109, 1-109.2, 1-110, 1-125, 1-130, 1-135, 1-145) contain fiduciary, ethics, and prohibited transaction provisions that may apply to investment managers. Investment managers seeking to be considered for this mandate should be familiar with and must comply with such applicable provisions of the Illinois Pension Code. Section 1-109.1 of the Illinois Pension Code (40 ILCS 5/1-109.1) encourages the Board to increase the use of minority-owned businesses, female-owned businesses, or businesses owned by persons with disabilities as emerging investment managers, minority investment managers, broker-dealers, or vendors for services and contracts; and to increase the racial, ethnic, and gender diversity of its fiduciaries (including investment managers and consultants), to the greatest extent feasible within the bounds of financial and fiduciary prudence. To this end, the Board encourages minority-, female- and persons with a disability-owned investment managers to submit proposals to this RFP.Section 50-37 of the Illinois Procurement Code concerning prohibitions on political contributions for certain vendors (30 ILCS 500/5037) may or may not apply to SURS investment managers or 4 consultants. SURS is not subject to the Illinois Procurement Code, generally (30 ILCS 500/115.100). However, each investment manager and consultant should be familiar with the provisions of section 50-37 of the Procurement Code and comply with this section if the investment manager or consultant deems it appropriate.Additional Disclosure Requirements Section 1-113.21 of the Illinois Pension Code (40 ILCS 5/1-113.21), added by Public Act 98-1022, effective January 1, 2015, provides that no contract, oral or written, for investment services, consulting services, or commitment to a private market fund shall be awarded by a retirement system, pension fund, or investment board established under the Code unless the investment advisor, consultant, or private market fund first discloses:1. The number of its investment and senior staff and the percentage of its investment and senior staff who are (i) a minority person, (ii) a female, and (iii) a person with a disability; and 2. The number of contracts, oral or written, for investment services, consulting services, and professional and artistic services that the investment advisor, consultant, or private market fund has with (i) a minority owned business, (ii) a female owned business, or (iii) a business owned by a person with a disability; and3. The number of contracts, oral or written, for investment services, consulting services, and professional and artistic services the investment advisor, consultant, or private market fund has with a business other than (i) a minority owned business, (ii) a female owned business or (iii) a business owned by a person with a disability, if more than 50% of services performed pursuant to the contract are performed by (i) a minority person, (ii) a female, and (iii) a person with a disability.Each Proposer responding to this RFP must disclose this information in the form provided in Appendix B.III. Specific Services Requested from the Investment Manager SURS is requesting information from qualified firms to manage an equity index option overlay portfolio. The purpose of this allocation is to generate incremental income from writing put and call options on SURS existing equity exposure, consistent with existing SURS policy ranges and rebalancing practices. SURS will consider the following in making its decision: Stability and General Experience of the Firm - as measured by the stability of the financial condition of the firm and experience in providing equity index options based strategies to institutional clients.  Key Personnel – Personnel to be assigned to this account, including key professionals, applicable portfolio managers, back-up and other staff assistance, and education and experience of all such key personnel. 5  Expertise – (a) Similar work performed for other clients, with references of such funds to be specified in proposal; (b) Assets under management; and (c) Investment experience broadly defined and experience as a manager of equity index options based strategies.  Client References – as measured by the quality of the references provided.  Performance – Prior performance measured on both an absolute and relative basis.  Investment Process – Consistent process implementation, as measured by return consistency, portfolio construction methodology, and the implementation of risk controls.  Investment Philosophy and Style – The extent to which the proposed philosophy and style best complement existing philosophies and styles and meet the requirements and expectations as presented in this RFP.  Fees – Reasonableness and competitiveness of fees.  RFP Proposal – Completeness, clarity and responsiveness to requirements as requested in the RFP and accompanying template.IV. Diversity Goals : SURS has established a goal of 20% of new allocations to alternative investments be made to firms owned by minorities, females or persons with a disability (MFDB). This goal is reviewed annually and presented to the Board as a component of the Investment Policy, most recently at the September 11, 2015 Board meeting. V. Minimum Qualifications: The Proposer must meet all of the following minimum qualifications to be given further consideration. Failure to satisfy any of these qualifications and requirements upon submittal of the Proposal will result in the rejection of the Proposal. The Proposer must certify in writing on the Minimum Qualifications Certification, Appendix A, that it meets all of the minimum qualifications. Such certification must include evidence of how each qualification is met and must be signed by an individual who is authorized to bind the Proposer contractually. Qualified firms meeting the Illinois statutory definition of “Minority owned business”, “Female owned business” or “Business owned by a person with a disability” are exempt from (5), (6), and (7) below and will be evaluated for further consideration at SURS’ discretion.1. Proposing firm must be SEC-registered or exempt from registration with the nature of the exemption provided. The firm must submit its full Form ADV (Parts I and II). 2. Proposing firm must agree to serve as a “fiduciary” to the Fund within the meaning of Illinois legislation and to act in accordance with all requirements and standards of conduct applicable to fiduciaries. 3. Proposer and its proposed team have all authorizations, permits, licenses and certifications required by federal and state laws and regulations to perform the services specified in this RFP at the time Proposer submits a response to the RFP. Proposer’s audited financial statements must be made available for review. 4. Proposer will comply with all legislation regarding investment restrictions, applicable State fiduciary, ethics, and diversity laws, including any additional disclosure requirements as outlined above. 6 5. The proposing firm must have an established track record of at least 3 years managing an equity index option overlay strategy as of 6/30/15. Qualified Women, Minority, or Disabled Owned Businesses are exempt and will be evaluated for further consideration at SURS’ discretion. 6. The proposing firm must have a minimum firm-level equity index option overlay AUM of $500 million as of 6/30/2015. Qualified Women, Minority, or Disabled Owned Businesses are exempt and will be evaluated for further consideration at SURS’ discretion. 7. The proposing firm must provide the performance track record (in managing non- proprietary capital) for the proposed strategy submitted for the RFP. Qualified Women, Minority, or Disabled Owned Businesses are exempt and will be evaluated for further consideration at SURS’ discretion. SURS retains the sole right to decide whether any Proposer is qualified to bid, including determining whether any Proposer’s qualifications are sufficiently comparable to satisfy all of the above minimum qualifications.VI. RFP Specifications: If, in response to this RFP, trade secrets or commercial or financial information are furnished under a claim that they are proprietary, privileged or confidential and that disclosure of the trade secrets or commercial or financial information would cause competitive harm to the person or business, such claim must be clearly made and such information must be clearly identified. The information must be identified in the RFP response and provided separately from the remainder of the RFP response. Such a claim is not definitive. SURS has the right and obligation to determine whether such information is exempt from disclosure under the Illinois Freedom of Information Act (5 ILCS 140/7 and 7.5). However, no information will be determined to be proprietary, privileged or confidential unless it is identified and separated as indicated herein. A. B. Specific Items Requested from Respondent Firms: Enumerated below are the specific items requested from respondent firms. 1. Letter of Transmittal. A letter of transmittal must be submitted on the Proposer’s official letterhead. The letter must identify all documents provided collectively as a response to the RFP, and must be signed by an individual authorized to bind the Proposer contractually. An unsigned proposal will be rejected. The letter must also contain the following: a. Statement that the proposal is being made without fraud or collusion; that the Proposer has not offered or received any finder’s fees, inducements or any other form of remuneration, monetary or non-monetary, from any individual or entity relating to the RFP. b. Statement that discloses any current business relationship or any current negotiations for prospective business with the Board or any SURS Board Members or SURS Staff. c. Statement that the proposing firm has been in compliance with the System’s Quiet Period Policy and Ex-Parte Communications Policy.7 2. Minimum Qualification Certification. The Proposer must complete the certification in Appendix A and provide all supporting documentation.3. Diversity Disclosures per Illinois Pension Code Section 1-113.21. The Proposer must complete the required disclosures regarding staff and vendor diversity in the form provided in Appendix B.Submission Deadline: The completed RFP must be delivered (electronically, please) by 4:30 pm CT, Friday, December 18, 2015. Earlier responses are welcome. Any RFP delivered after the deadline will not be considered. The e‐mail subject line must read as follows: “Options Strategy RFP Response – Name of Respondent” and should be sent to both SURS and NEPC at: Douglas Wesley, CFA John Lutz SURS NEPC Deputy Chief Investment Officer Research Associate [email protected] [email protected]Submission of Questions: In order to clarify any issues in this Request for Proposals, the System will respond only to questions that are presented in writing via e-mail to: Douglas Wesley, CFA at [email protected]. All questions should be submitted to SURS by 8:00 AM CT Tuesday, November 24, 2015. These questions will be consolidated into a single Q&A document and responded to by the System on, or about, Friday, December 4, 2015. The Q&A document will be posted on the SURS web site at www.surs.org /rfp without divulging the source of the query.Communications with SURS Other than existing normal business matters, respondents, potential respondents, or their representatives should not contact anyone at SURS (including SURS staff, members of the SURS advisory committees and members of the SURS Board) other than the investment team assigned to the RFP listed above.In addition, respondents must not discuss this RFP with any employee of SURS’s custodian, managers, legal counsel, or other advisors or persons/entities having contracts or other affiliations with SURS. FAILURE TO OBSERVE THIS RULE IS GROUNDS FOR DISQUALIFICATIONSURS Quiet Period Policy: Please note the Quiet Period Policy that establishes guidelines by which the Board of Trustees and staff will communicate with prospective service providers during a search process. Please review Section VIII of the Investment Policy and observe the Quiet Period guidelines. The Quiet Period for this search was initiated on September 11, 2015.8 Ex-parte Communications: The State Officials and Employees Ethics Act (5 ILCS 430/5-50) provides that all “ex parte communications” concerning investment, rulemaking or quasi-adjudicatory matters pending before a State agency must be documented and some must be reported. An “ex parte communication” is any written or oral communication by any person that imparts or requests material information or makes a material argument regarding potential action concerning an investment, a rulemaking process, or a quasi-adjudicatory matter. An “ex parte communication” does not include statements publicly made in a public forum or communications among employees of the State agency.An “ex parte communication” from an “interested party” or his or her official representative or attorney to an employee or the agency must be memorialized and made a part of the record. An “interested party” is a person or entity whose rights, privileges, or interests are the subject of or are directly affected by an investment, regulatory or quasi-adjudicatory matter. An “ex parte communication” other than that described above must be reported by the staff member or Board Trustee immediately to the agency’s Ethics Officer. The communication must be memorialized and made a part of the record. The communication must be filed with the Executive Ethics Commission, accompanied by a memorandum from the Ethics Officer.Rights Reserved: SURS reserves the right to amend any segment of the RFP prior to the announcement of a successful contractor. In such an event, all responders will be afforded the opportunity to revise their proposal to accommodate the RFP amendment.SURS reserves the right without prejudice to reject any or all proposals submitted. The system is not obligated to award a contract to any of the respondents to the RFP. There is no express or implied obligation for SURS to reimburse for any expenses incurred in preparing proposals in response to this RFP.VII. Projected Schedule of Events: September 11, 2015 Quiet period begins November 16, 2015 Dissemination of RFP November 24, 2015 Deadline for questions to SURS December 4, 2015 Responses to questions submitted to SURS posted online December 18, 2015 RFP responses due by 4:30 pm CT December 2015 Identify firms for further consideration February 2016 Interviews with selected firms March 10, 2016 Finalist presentations to SURS Investment Committee9 Appendix AMINIMUM QUALIFICATION REQUIREMENTS AND CERTIFICATIONProposers must satisfy each of the following minimum qualifications for this RFP, in order to be given further consideration by the Board of Trustees. Failure to satisfy each of the requirements will result in the immediate rejection of the proposal. Failure to provide complete information will result in the rejection of the proposal. Please circle “YES” or “NO” where indicated. If evidence is requested, please provide complete documentation.1. Proposing firm must be SEC-registered or exempt from registration with the nature of the exemption provided. If so registered, please submit Form ADV (Parts I and II). (Yes/No):_____ 2. Proposing firm must agree to serve as a “fiduciary” to the Fund within the meaning of Illinois legislation and to act in accordance with all requirements and standards of conduct applicable to fiduciaries. (Yes/No):_____ 3. Proposer and its proposed team have all authorizations, permits, licenses and certifications required by federal and state laws and regulations to perform the services specified in this RFP at the time Proposer submits a response to the RFP. Proposer’s audited financial statements will be made available for review. (Yes/No):______4. Proposer will comply with all legislation regarding investment restrictions, and all applicable State fiduciary, ethics, and diversity laws, including any additional disclosure requirements. (Yes/No):______5. Proposer must have an established track record of at least 3 years managing an equity index option overlay strategy as of 6/30/15. Qualified Women, Minority, or Disabled Owned Businesses are exempt. (Yes/No/Exempt):______6. Proposer must have a minimum firm-level equity index option overlay AUM of $500 million as of 6/30/15. Qualified Women, Minority, or Disabled Owned Businesses are exempt. (Yes/No/Exempt):______7. Proposer must provide the performance track record (in managing non-proprietary capital) for the proposed strategy submitted for the RFP. Qualified Women, Minority, or Disabled Owned Businesses are exempt. (Yes/No/Exempt):______IF PROPOSER PROVIDED A “NO” RESPONSE TO ANY OF THE MINIMUM QUALIFICATION REQUIREMENTS ABOVE, PROPOSER SHOULD NOT SUBMIT A PROPOSAL TO SURS.10 PLEASE CERTIFY THE PROPOSER’S SATISFACTION OF THE MINIMUM QUALIFICATIONS BY PROVIDING THE PROPOSER’S AUTHORIZED SIGNATURE BELOW.Authorized Signer Name: ______Title: ______Respondent Firm: ______Signature: ______Date: ______11 Appendix BDISCLOSURES PER ILLINOIS PENSION CODE SECTION 1-113.21Beginning January 1, 2015, section 1-113.21 of the Illinois Pension Code requires the following disclosure from the investment advisor, consultant or private market fund:Name of investment advisor, consultant, or private market fund:______1. The number of its investment and senior staff and the percentage of its investment and senior staff who are (i) a minority person (ii) a female, and (iii) a person with a disability; (If none, state “none”)Staff Classification Number of Investment and % Percentage of Investment Senior Staff Who Are and Senior Staff Who Are Minority Female Person with a Disability2. The number of contracts, oral or written, for investment services, consulting services and professional and artistic services that the investment advisor, consultant, or private market fund has with (i) a minority owned business, (ii) a female owned business, or (iii) a business owned by a person with a disability; and (If none, state “none”)Contracts Number Contracts Minority Female Person with a Disability3. The number of contracts, oral or written, for investment services, consulting services, and professional and artistic services the investment advisor, consultant, or private market fund has with a business other than (i) a minority owned business, (ii) a female owned business or (iii) a business owned by a person with a disability, if more than 50% of services performed pursuant to the contract are performed by (i) a minority person, (ii) a female, and (iii) a person with a disability.(If none, state “none”)12 Contract Number Contracts Minority Female Person with a DisabilitySupplemental Information (Optional): If desired, please include additional information on your firm’s diversity efforts to supplement the information provided above. This may include initiatives such as internal training and development programs, as well as recruitment and outreach efforts, etc.INVESTMENT ADVISOR / CONSULTANT/ PRIVATE MARKET FUND: Company Name: Signature: Printed Name Title: Dated: Resources and Definitions Section 1-113.21 of the Illinois Pension Code website: http://www.ilga.gov/legislation/publicacts/98/PDF/098-1022.pdfDefinitions per Illinois Law Illinois Legislation & Laws website: http://www.ilga.gov/"Contract" means all types of [State] agreements, regardless of what they may be called, for the procurement, use, or disposal of supplies, services, professional or artistic services, or construction or for leases of real property where the [State] is the lessee, or capital improvements, and including renewals, master contracts, contracts for financing through use of installment or lease-purchase arrangements, renegotiated contracts, amendments to contracts, and change orders.“Investment adviser”, "investment advisor", or "investment manager" with respect to a pension fund or retirement system established under Illinois Code if the person: (1) is a fiduciary appointed by the board of trustees of the pension fund or retirement system in accordance with Section 1-109.1; (2) has the power to manage, acquire, or dispose of any asset of the retirement system or pension fund; (3) has acknowledged in writing that he or she is a fiduciary with respect to the pension fund or retirement system; and (4) is at least one of the following: (i) registered as an investment adviser under the federal Investment Advisers Act of 1940 (15 U.S.C. 80b-1, et seq.); (ii) registered as an investment adviser under the Illinois Securities Law of 1953; (iii) a bank, as defined in the Investment Advisers Act of 1940; or (iv) an insurance company authorized to transact business in this State.13 “Minority person” means a person who is a citizen or lawful permanent resident of the United States and who is a member of a minority."Minority owned business" means a business concern which is at least 51% owned by one or more minority persons, or in the case of a corporation, at least 51% of the stock in which is owned by one or more minority persons; and the management and daily business operations of which are controlled by one or more of the minority individuals who own it. "Female owned business" means a business concern which is at least 51% owned by one or more females, or, in the case of a corporation, at least 51% of the stock in which is owned by one or more females; and the management and daily business operations of which are controlled by one or more of the females who own it. "Business owned by a person with a disability" means a business concern that is at least 51% owned by one or more persons with a disability and the management and daily business operations of which are controlled by one or more of the persons with disabilities who own it. A not-for-profit agency for persons with disabilities that is exempt from taxation under Section 501 of the Internal Revenue Code of 1986 is also considered a "business owned by a person with a disability". 14

Investment Consultant RFP

Details

Download

Copyright

We respect the copyrights and intellectual property rights of all users. All uploaded documents are either original works of the uploader or authorized works of the rightful owners.

Support