Procurement
Comptroller (OOC)
Asset Management
1 Centre Street, Room 650, New York, NY 10007
Evelyn Dresler
phone: (212) 669-2756
email: bamcontracts@comptroller.nyc.gov
phone: (212) 669-2756
email: bamcontracts@comptroller.nyc.gov
Archived
Goods and Services
Negotiated Acquisition
10/16/2015 - 10/22/2015
Solicitation
PIN#015-16817400 FI Due:
Attachments 1
Description
The Office of the New York City Comptroller seeks expressions of interest from prospective bank loan fixed income investment managers (“Manager” or “Firm”) to become part of a pool of prospective Firms that may in the future manage one or more portfolios for the New York City Retirement System(s) (the “Systems”). Managers selected for the pool may be eligible to compete for future allocations to the bank loan portfolio in the event that the Systems and the Comptroller determine there is a need for additional Managers, such as when there is an increase in allocation or when a current manager is terminated. To be eligible to receive a future allocation, the Manager must still meet the minimum requirements described below at the time of the allocation. Managers will not be permitted to increase their fee proposal in any subsequent selection from the pool.
All responding Managers must meet the highest standards of professional competence and ethics. If a Manager is selected from the pool to manage assets, the Manager will be required to serve in a fiduciary capacity to the Comptroller and the Systems.
Only Managers that meet the following minimum requirements as of August 31, 2015, will be considered:
A. Investment Approach
The Firm must offer a bank loan product that can be benchmarked to one of the following major market indexes of $U.S.-denominated non-investment grade fixed income securities:
• S and P/LSTA Leveraged Loan Index;
• Credit Suisse Leveraged Loan Index; or
• Another appropriate bank loan benchmark.
Note: The benchmark currently used is the Credit Suisse Leverage Loan Index, but this is subject to change at the Comptroller’s option.
Products that predominantly utilize the following investment strategies will not be considered:
• Distressed Debt products;
• Multi-Asset/Balanced Portfolio products;
• CBO or CDO products;
• Long/short or Absolute Return products;
• Any products utilizing leverage;
• Strategies that do not primarily invest in below investment grade debt;
• Products based on derivative strategies;
• Tactical asset allocation strategies; or
• Products utilizing derivatives as a main focus of the strategy (products with limited derivative usage will be permitted).
B. Performance
The proposed product must have, at a minimum, a live, three-year track record. It is preferred that the track record is Global Investment Performance Standards (GIPS) compliant and GIPS verified.
Only products with a continuous track record for the entire three year minimum period will be considered.
The following track records will not be considered responsive:
• Linked performance of two different products, even when they both use a similar approach and the same personnel;
• Performance extracted from any other product; or
• Back tested or otherwise simulated track record.
Proposers may link track records from two Firms if they meet CFA Institute standards for portability. The products offered by the two Firms must be substantially the same in style and use a similar benchmark.
Do not include securities lending income in the track record.
C. Assets Under Management
At a minimum, the Firm must:
(i) Have at least $400 million under management in the proposed product,
and
(ii) Have proven ability in managing institutional-sized portfolios, including at least one non-affiliated client for whom the Firm currently manages $50 million or more in the proposed product.
Note: Distinct non-investment grade products with carve-outs of non-investment grade securities from other products will not be combined to calculate the total for Assets Under Management. (e.g., a Firm with $200 million in institutional non-investment grade fixed income products plus $200 million in institutional non-investment grade fixed income assets extracted from another product does not meet the $400 million minimum requirement.)
D. Regulatory
The Firm must be a registered investment advisor under the Investment Advisors Act of 1940, or must be a duly authorized bank or insurance company and must also be registered with the appropriate local regulatory authority (e.g., FSA) as applicable. Although the Systems are not subject to ERISA, Firms must agree to perform as a fiduciary to the Systems, consistent with ERISA standards.
E. NYCRS’ Ethics and Compliance Policy
Firms will be required to comply with the NYCRS’ Ethics and Compliance Policy. The policy will be provided to selected Firms at a later date.
A negotiated acquisition procurement method pursuant to Section 3-04 of the New York City Procurement Policy Board Rules will be used to select this pool of Managers.
It is anticipated that the initial term of the pool contracts will be three (3) years with renewal options up to an additional six (6) years. Selected Firms may be allocated assets at any time during the contract term, or may neither be selected nor allocated any assets.
Firms may express interest by sending a summary of their qualifications, demonstrating that the minimum requirements are met. Firms must also provide the following:
• A Firm and product’s team overview (Organization/Staff, Nature of Amount of Assets Managed, Compliance, Client Service);
• A detailed description of investment management and decision making process for the proposed product (Philosophy/Process, Research and Resources, Portfolio Construction and Characteristics, Trading and Operations, Risk Management);
• Performance:
o Trailing one through ten year product returns as well as the benchmark’s returns (identify benchmark), through August 31, 2015
o Monthly product and benchmark returns from inception through August 31, 2015;
• A reference list of at least three non-affiliated, tax exempt institutional clients. Include the name, title, contact number and email address; and
• A fee proposal.
Firms must also enter their proposed product(s) information in eVestment Alliance’s database. Information on requirements for entering information into this database can be found at https://www.evestment.com (click on “Submit My Data).
Consistent with the laws and policies of the City, proposals from certified M/WBE Firms or proposals that include partnering arrangements with certified M/WBE Firms are encouraged. Additionally, proposals from small and New York City-based businesses are also encouraged.
All responding Managers must meet the highest standards of professional competence and ethics. If a Manager is selected from the pool to manage assets, the Manager will be required to serve in a fiduciary capacity to the Comptroller and the Systems.
Only Managers that meet the following minimum requirements as of August 31, 2015, will be considered:
A. Investment Approach
The Firm must offer a bank loan product that can be benchmarked to one of the following major market indexes of $U.S.-denominated non-investment grade fixed income securities:
• S and P/LSTA Leveraged Loan Index;
• Credit Suisse Leveraged Loan Index; or
• Another appropriate bank loan benchmark.
Note: The benchmark currently used is the Credit Suisse Leverage Loan Index, but this is subject to change at the Comptroller’s option.
Products that predominantly utilize the following investment strategies will not be considered:
• Distressed Debt products;
• Multi-Asset/Balanced Portfolio products;
• CBO or CDO products;
• Long/short or Absolute Return products;
• Any products utilizing leverage;
• Strategies that do not primarily invest in below investment grade debt;
• Products based on derivative strategies;
• Tactical asset allocation strategies; or
• Products utilizing derivatives as a main focus of the strategy (products with limited derivative usage will be permitted).
B. Performance
The proposed product must have, at a minimum, a live, three-year track record. It is preferred that the track record is Global Investment Performance Standards (GIPS) compliant and GIPS verified.
Only products with a continuous track record for the entire three year minimum period will be considered.
The following track records will not be considered responsive:
• Linked performance of two different products, even when they both use a similar approach and the same personnel;
• Performance extracted from any other product; or
• Back tested or otherwise simulated track record.
Proposers may link track records from two Firms if they meet CFA Institute standards for portability. The products offered by the two Firms must be substantially the same in style and use a similar benchmark.
Do not include securities lending income in the track record.
C. Assets Under Management
At a minimum, the Firm must:
(i) Have at least $400 million under management in the proposed product,
and
(ii) Have proven ability in managing institutional-sized portfolios, including at least one non-affiliated client for whom the Firm currently manages $50 million or more in the proposed product.
Note: Distinct non-investment grade products with carve-outs of non-investment grade securities from other products will not be combined to calculate the total for Assets Under Management. (e.g., a Firm with $200 million in institutional non-investment grade fixed income products plus $200 million in institutional non-investment grade fixed income assets extracted from another product does not meet the $400 million minimum requirement.)
D. Regulatory
The Firm must be a registered investment advisor under the Investment Advisors Act of 1940, or must be a duly authorized bank or insurance company and must also be registered with the appropriate local regulatory authority (e.g., FSA) as applicable. Although the Systems are not subject to ERISA, Firms must agree to perform as a fiduciary to the Systems, consistent with ERISA standards.
E. NYCRS’ Ethics and Compliance Policy
Firms will be required to comply with the NYCRS’ Ethics and Compliance Policy. The policy will be provided to selected Firms at a later date.
A negotiated acquisition procurement method pursuant to Section 3-04 of the New York City Procurement Policy Board Rules will be used to select this pool of Managers.
It is anticipated that the initial term of the pool contracts will be three (3) years with renewal options up to an additional six (6) years. Selected Firms may be allocated assets at any time during the contract term, or may neither be selected nor allocated any assets.
Firms may express interest by sending a summary of their qualifications, demonstrating that the minimum requirements are met. Firms must also provide the following:
• A Firm and product’s team overview (Organization/Staff, Nature of Amount of Assets Managed, Compliance, Client Service);
• A detailed description of investment management and decision making process for the proposed product (Philosophy/Process, Research and Resources, Portfolio Construction and Characteristics, Trading and Operations, Risk Management);
• Performance:
o Trailing one through ten year product returns as well as the benchmark’s returns (identify benchmark), through August 31, 2015
o Monthly product and benchmark returns from inception through August 31, 2015;
• A reference list of at least three non-affiliated, tax exempt institutional clients. Include the name, title, contact number and email address; and
• A fee proposal.
Firms must also enter their proposed product(s) information in eVestment Alliance’s database. Information on requirements for entering information into this database can be found at https://www.evestment.com (click on “Submit My Data).
Consistent with the laws and policies of the City, proposals from certified M/WBE Firms or proposals that include partnering arrangements with certified M/WBE Firms are encouraged. Additionally, proposals from small and New York City-based businesses are also encouraged.