Request for Proposal For Domestic Core Fixed Income Emerging Manager

Transcription

1 Request for Proposal For Domestic Core Fixed Income Emerging Manager 2010 Chicago Teachers Pension Fund 203 North LaSalle Street, Suite 2600 Chicago, IL

2 Purpose The Request for Proposal (RFP) has been issued by the Board of Trustees of the Chicago Teachers Pension Fund. The Board solicits proposals from all qualified emerging professional firms interested in providing Core Fixed Income services. This RFP does not offer a contract, but seeks the submission of proposals from qualified, professional firms that may form the base for negotiation of an Investment Manager Agreement. Chicago Teachers Pension Fund reserves the right to reject any or all proposals and to solicit additional proposals if that is determined to be in the best interest of the CTPF. CTPF reserves the right to reject any or all proposals submitted. All proposals submitted will be evaluated by members of CTPF staff. Firms may be asked to make formal presentations of their proposals to the CTPF Investment Committee and/or the CTPF Board of Trustees. Selection of the Investment Consultant is subject to final approval by the CTPF Board of Trustees. Submissions must be ed to: Ingramd@ctpf.org and WaiYee.Kwan@mercer.com NO HARDCOPY SUBMISSIONS WILL BE ACCEPTED During the evaluation process, CTPF retains the right to request additional information or clarification from respondents to this RFP. CTPF may also allow corrections of errors or omissions by respondents, all corrections and omission must be received not later than March 10, Questions from respondents should be submitted via to Ingramd@ctpf.org andwaiyee.kwan@mercer.com CTPF reserves the right to retain all proposals submitted and to use any ideas in a proposal regardless of whether that proposal is selected. Submission of a proposal indicates acceptance of the conditions contained in this request for proposals, unless clearly and specifically noted in the proposal submitted and confirmed in the contract agreement between CTPF and the firm selected. Scope of Services 2

3 Product/Service: Domestic Core Fixed Income portfolio Benchmark: Barclays Aggregate Bond Index Mandate Size: $25-50MM Investment Guidelines: 1. The Investment Manager will have independent discretionary authority with respect to the investment of that portion of assets managed by Investment Manager. 2. The manager shall provide monthly, quarterly and year performance reports and portfolio valuations to the Fund and General Consultant, Mercer. 3. The Manager will document all investment transactions with the Fund s master custodian in accordance with the usual and customary standards of practice and confirm all executed transactions from custodial account records; the Fund s current master custodian is Northern Trust. 4. Abide by all the Fund s policies and contractual agreements Performance Standards Horizon Index Universe Rank in the upper ½ of the Less than 1 market cycle (rolling 3 year period) Exceed the Barclays Aggregate Bond Index peer universe as determined by the Fund s General Consultant One market cycle (rolling 5 year period) Exceed the Barclays Aggregate Bond Index Rank in the upper 40% of the peer universe as determined by the Fund s General Consultant Minimum Qualifications In order to be considered for selection as an Investment Manager, the Proposer must provide documented proof that the following minimum qualifications listed below are met. 1. The Company is duly registered with the Securities and Exchange Commission (SEC) pursuant to the Investment Advisors Act of

4 2. Defined as an Emerging Investment Manager as defined by IL Public act (assets under $10B and a certified MWDBE (Minority, Women and/or Disabled Business Enterprise) 3. The Company must have a documented three year track record of managing the core fixed income portfolio that they are submitting in this RFP. 4. The company and its personnel have all authorizations, permits, licensees and certifications required by federal, state and/or local law. 5. The company will carry errors and omissions insurance or comparable instruments to cover negligent acts or omissions, which will be at minimum 10% of the initial allocation. 6. The company must maintain sufficient procedures and capabilities to ensure the timely and accurate backup and full recovery for all computers and other data storage systems. 7. The company must have a company policy and practice of equal employment opportunity and non-discrimination based on race, creed and/or gender. 8. The company must comply with the Fund s MWDBE brokerage policy 9. All candidate firms must also have their information in the Mercer database ( in addition to submitting this RFP---this must be done prior to submitting a RFP. This website includes a demographic section for organizational information as well as detailed product information sections. completed. Fees All sections must be Managers will be entitled to receive quarterly compensation. Fees shall be payable based upon the average market value of each month s ending market value minus the accrued income, based on what is reported to the Fund s master custodian, Northern Trust. The Fund s expects all applicants to agree to a Most Favored Nations Clause (MFN) Submission of Proposal 4

5 Proposal must be received at the following address no later than the close of business on May 17, 2010, 5pm Central DeAnna Ingram-Davey Chicago Teachers Pension Fund and Phoebe Kwan Mercer Consultant No Hard Copies Please It is the responsibility of the Proposer to ensure that its proposal is timely delivered and received in the proper office on or before the deadline for responding to this RFP. All proposals received will be subject to public disclosures. Proposals may not be modified or withdrawn after the Proposal date has passed. Modifications or a withdrawal of a Proposal after the specified receipt date will not be considered. If it becomes necessary to revise any part of this RFP or if any additional data is necessary for an exact interpretation of the provisions of this RFP prior to the due date for Proposals, supplemental information will be posted by Chicago Teachers' Pension Fund on its website If such an addenda issuance is necessary, Chicago Teachers' Pension Fund reserves the right to extend the deadline date of Proposals to accommodate such interpretations or additional requirements. All questions RFP should be submitted via only to the following: 5

6 Chicago Teachers Pension Fund DeAnna Ingram-Davey: and Mercer Consultant Phoebe Kwan: **All questions and answers will be posted on the Chicago Teachers Pension Fund website** All questions regard submitting company data to Mercer s website: usmanagerresearch@mercer.com Timeline Deadline for RFP Questions May 14, 2010 RFP Submission Due Date May 17, 2010 Finalist Presentation June 15, 2010 Selection of Manager June 15, 2010 Tentative Funding Date August 2, 2010 Evaluation and Selection All proposals received by the requested deadline will be reviewed and evaluated. After the review and evaluation of the proposal, the Board may conduct interviews of the finalist candidates. The Board will select the manager they determine, in their sole discretions, to be fully qualified and best suited among those submitting proposals on the basis of the evaluations. Once the Board has selected a Manager, negotiations for contract terms and conditions will begin. The Board may also chose no candidate and begin a new search or seek other candidates from the respondents of the original RFP. 6

7 Quiet Period The following guidelines will be instituted during the RFP process for a service provided; a quiet period will commence upon Board action to authorize a search for service provider and end once a selection has been made by the Board and accepted by the service provider. The objectives of the policy are to ensure that: Prospective service providers competing to become employed by CTPF have equal access to information regarding the search parameters; Communications related to the selection are consistent and accurate; The process of selecting service providers is efficient, diligent, and fair. Policy Guidelines The following guidelines will be instituted during a search process for a service provider: Initiation, continuation and conclusion of the quiet period shall be publicly communicated to prevent inadvertent violations All Board members, and Staff not directly involved in the search process, shall refrain from communicating with service provider candidates regarding any product or service related to the search offered by the candidate throughout the quiet period and shall refrain from accepting meals, travel, hotel, or other values from the candidates. Throughout the quiet period, if any Board member is contacted by a candidate, the Board member shall refer the candidate to CTPF Consultant or Staff directly involved in the search process. All authority related to the search process shall be exercised solely by the Board as a whole and not by individual Board Members All information related to the search process shall be communicated by the CTPF Consultant and Staff to the relevant Committee or Board as a whole, and not to individual Board Members: and The quiet period does not prevent Board approved due diligence, client conference attendance or communications with an existing service provider that happens to be a candidate in the ordinary course of services provided by such service provider; however, discussions related to the pending selection shall be avoided during those activities. The provisions of this policy will apply to service provider candidates throughout the quiet period and shall be communicated to candidates in conjunction with any Request For Proposal or Request For Information 7

8 A service provider may be disqualified from a search process for a knowing violation of this policy. Firm Name 8

9 Firm Primary Location Contact Person Name Contact Number Contact Address Product Name Date of product inception Total Firm AUM as of 12/31/09 $ Total Assets in Core Fixed Income Product as of 12/31/09 $ Is your firm a certified MWDBE firm? (If you mark yes please provide certification) Yes No Request for Information 9

10 Firm Information 1. Please provide an overview of your firm including the following: a. All related and affiliated firms b. Organizational chart, with brief biographies of all key personnel c. Number of institutional clients d. Number of public plan clients e. Number and location of additional offices 2. Are there any pending litigation against your firm, any of its employees or any owners of the firm? If so please explain. Portfolio Information 3. Please provide the following information for your firm s product as of 12/31/2009: a. Investment Philosophy b. Portfolio Construction Process c. Buy Strategy d. Sell Strategy e. Initial and On-going Due Diligence f. Risk Controls 4. Please provide gross and net of fee performance for the 1,3,5 year period ending 12/31/2009 Additional Information 5. Please provide the following documents: a. MWDBE Certification b. Contingency/Disaster Recovery/SAS 70 for 2010 c. Fee proposal based an anticipated allocation of $50MM d. EEOC Chart By submitting this Request for Information, I certify the following statements are true regarding 10

11 (Company Name) 1. The product that I am submitting for review is Domestic Core Fixed Income Product, with a three year track record 2. The firm that I represent is duly registered with the Securities and Exchange Commission (SEC) pursuant to the Investment Advisors Act of The firm carries errors and omissions insurance to cover negligent acts or omissions 4. The firm has a company policy and practice of equal employment opportunity and non-discrimination based on race, gender and/or creed. 5. All requested firm information has been submitted to Mercer s database (www. mercergimd.com) 6. The firm understands and will be able to comply with Chicago Teachers Pension Fund s MWDBE Brokerage Policy of 35% (50% of which must be DIRECT trading) for this mandate 7. The firm understands and will be able to comply with the Chicago Teachers Pension Fund month and quarterly reporting requirements 8. The firm understands and will comply with the Chicago Teachers Pension Fund Quiet Period Policy 9. The firm understands that Chicago Teachers Pension Fund accepts no obligation for costs incurred by the Respondents in anticipation to being awarded a contract 10. The firm understands that Chicago Teachers' Pension Fund is exempt from federal, state and local taxes and will not be responsible for any taxes levied on the Respondent as a result of any contract resulting from this RFP 11. The firm certifies that at the time of submitting this RFP that there are no past or present litigation or regulatory actions against the firm or any current employees. Signature Date Name Title 11