administration
___
SHELLEY I. SMITH
PRESIDENT
THOMAS J. MIZO
VICE PRESIDENT
___
MARVIN ADAMS, JR.
ERIC L. HOLOMAN
RICK ROGERS
VICKIE L. SCHIFF
KEN SPIKER / City of Los Angeles
CALIFORNIA
JAMES K. HAHN
MAYOR / los angeles city employees’
retirement system
360 EAST SECOND STREET
2ND FLOOR
LOS ANGELES, CA 90012-4207
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ROBERT AGUALLO, JR.
GENERAL MANAGER
(213) 473-7280
DANIEL P. GALLAGHER
CHIEF INVESTMENT OFFICER
(213) 473-7124
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TTY (888) 349-3996
May 11, 2004
Subject: CONSULTANT FOR ALTERNATIVE INVESTMENTS REQUEST FOR PROPOSAL
Dear Proposer:
The Los Angeles City Employees' Retirement System (LACERS), a $7.7 Billion fund, is seeking to acquire through a request for proposal (RFP) process, the services of a consultant providing a combination of consulting and gatekeeper services for an approximately $500 million alternative investments program. Additionally, a specialized, non-traditional alternative investment program was implemented in late 2003 as a complement to the alternative investments asset class.
The scope of the consultant services will include the following: gatekeeper functions, strategic asset allocation advice, performance measurement, attribution analysis, and investment due diligence analysis and reporting. The program includes primary and secondary limited partnership interests in venture capital, buy-outs, and distressed debt. Gatekeeper services include identification and assistance in selection of managers, partners, and deals. Respondents must have experience providing alternative investment consulting services for both non-discretionary and discretionary clients with combined alternative investment assets of more than $1 billion. Respondents must also consult for at least one public pension fund whose total plan assets are at least $3 billion with an alternative investment program of at least $200 million. The selected consultant must be available for presentations to, and consultation with, the Board on a wide variety of alternative investment-related issues.
This search would also be inclusive of experience with a non-discretionary specialized, non-traditional investment partnership program. Specialized investments might focus on specific sectors of the economy perceived to be less efficient such as industries targeting underserved communities, might target new technologies like biotechnology, may take advantage of demographic opportunities such as catering to the growing seniors market, etc. The primary consideration in any deal is the risk-return characteristics. Achievement of other desired goals, such as minority manager participation or investment in Los Angeles, is ancillary to the primary purpose of achieving value added risk adjusted competitive investment returns.
The LACERS' $7.7 billion portfolio has target allocations as follows: Fixed Income 27%; Cash, 1%; U.S. Stocks 40%; Non-US Equities 18%; Real Estate 7%; traditional Alternative Investments 7% (the Specialized Alternative Investment Program is up to 10% of the Alternative Investments target allocation).
LACERS employs independent general, alternative, and real estate consultants. Consideration will be given to proposals from emerging firms to ensure that women and minorities have an opportunity to participate.
The Board, after reviewing all proposals submitted, may elect to hire multiple consultants if it determines that the best relationships can be established in this manner without significantly increasing the cost to the Fund.
The RFP and other required documents may be downloaded from LACERS’ website www.lacers.org. A list of required documents can be found in attached instructions Section IV “Proposal Requirements” of the RFP.
Please submit 13 copies by 4:00 P.M., PDT, Thursday, June 10, 2004 and mailed to:
DANIEL P. GALLAGHER, CHIEF INVESTMENT OFFICER
Los Angeles City Employees' Retirement System
360 East Second Street, Second Floor
Los Angeles, California, USA 90012-4207
FACSIMILE COPIES WILL NOT BE ACCEPTED.
Finalist candidates may be requested to submit additional copies of their proposal. Any questions should be directed to Rod June or Dan Gallagher at (213) 473-7124 or emailed to
Sincerely,
Robert Aguallo, Jr., General Manager
Los Angeles City Employees' Retirement System
RA:DPG:RJ
Enclosures
GENERAL INFORMATION AND REQUIREMENTS
I. MINIMUM QUALIFICATIONS
A. The proposer must be a firm whose primary business is that of consultant for the alternative investment asset class. The proposer must have at least three years experience in institutional non-discretionary, discretionary and advisory relationships.
B. The firm's team must have at least a three-year performance history of alternative investment consulting with a minimum of $1 billion in combined alternative investment assets, and consult on alternative investment assets to at least one public pension fund clients with total plan assets greater than $3 billion and an alternative investment program of more than $200 million.
C. The firm’s senior members must have worked together for at least three years.
D. The proposer must be directly responsible for the management of the account, and all personnel responsible for the account must be employees of the firm.
E. The proposer must carry errors and omissions coverage and be approved for it at the time of funding.
F. All minimum qualifications must be met by June 10, 2004 except where otherwise noted.
REQUEST FOR PROPOSAL
LOS ANGELES CITY EMPLOYEES’ RETIREMENT SYSTEM
CONSULTANT FOR ALTERNATIVE INVESTMENTS
MINIMUM QUALIFICATIONS WARRANTY
By signing below, an authorized representative of the proposer warrants that the proposer has met all of the MINIMUM QUALIFICATIONS.
______
Authorized Signature (Print Name)
______
Title Date
______
Company
II. RFP SEARCH PROCESS
SEQUENCE OF EVENTS AND PROPOSED TARGET DATES
Action / Proposed Target DatesProposer submission of proposal / 06/10/2004
Interviews / 08/13/2004
New contract takes effect / 09/17/2004
III. GENERAL REQUIREMENTS - all proposals must comply with the requirements and specifications outlined in 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. Negotiations - LACERS reserves the right to negotiate a change in proposer representatives if the assigned representatives are not meeting LACERS’ needs adequately.
C. Termination – This RFP in no manner obligates LACERS to the eventual procurement of services until confirmed by a written contract. Progress toward this end is solely at the discretion of LACERS and may terminate at any time prior to the signing of a contract.
D. 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.
E. Proposal Applicability – To allow sufficient time for contract negotiation, all prices and conditions stated in the proposal must be firm for a period of 120 days from the deadline for submission of proposals.
F 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 proposer concerns be brought to LACERS’ attention.
G. 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.
H. Basis for Proposal – Preparation of proposals should be responsive-specific only to questions asked in the RFP.
I. 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.
J. 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.
IV. PROPOSAL REQUIREMENTS
A. The following required documents may be downloaded from LACERS’ website at www.lacers.org:
1) Request for Proposal - Microsoft Word
2) Request for Proposal - Excel
3) Affirmative Action Questionnaire - PDF Format
4) Vendor Childcare Questionnaire - PDF Format
5) Child Support Statement - PDF Format
6) Americans With Disabilities Certification PDF Format
B. Thirteen (13) 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 and on the spine of each copy of the RFP binder. One copy shall be labeled “ORIGINAL” on the front cover and spine, and shall contain all original signatures.
C. In addition to the hard copy of the proposal, please provide the proposal in Microsoft Word and in Microsoft Excel on one CD-ROM or one 3 ½” floppy disk. In the Excel version of the RFP, the proposal must be submitted in the format specified in the download Excel RFP Questionnaire.
D. A CD-ROM or 3 ½” diskette containing the proposal should be labeled with the firm name and “RFP Consultant for Alternative Investments” 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.
E. Forms 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.
F. Please download from the LACERS web page, complete, and submit with your hard copy proposal the LACERS Affirmative Action, Vendor Child Care, Child Support questionnaires, and American Disabilities statement. Proposals not including these completed forms/documents will be considered non-responsive, and cannot be considered for contract. Provide all original four completed forms/documents as Exhibit A in the proposal copy marked “Original” and place photo copies of these completed forms in the remaining RFP response binders as Exhibit A. Completeness, clarity and brevity is stressed in the RFP proposal binders. Do not exceed the stated maximum number of words in the responses provided in the formatted Excel spreadsheets.
G. 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 “Minimum Qualifications Certification” form).
H. Additional copies of the proposal may be requested from firms selected for personal interview. These copies must be exact duplicates of the response submitted for evaluation.
I. Each proposal that is submitted must include written acknowledgment of the receipt of any and all amendments (if applicable) made to this RFP.
J. All information requested in this RFP must be submitted in the format as specified in this RFP. Responses not meeting format requirements or that are incomplete in any way will be rejected. Proposers are urged to be concise and accurate in the preparation of responses and to carefully proofread the final copies.
K. The word CONFIDENTIAL should be stamped and must be clearly designated on every page in the proposal containing proprietary or trade secret information.
L. HARD COPY MAILING INSTRUCTIONS: The hard copy proposals along with the CD or 3½” floppy disk 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 FIRM
RFP CONSULTANT FOR ALTERNATIVE INVESTMENTS
With the package addressed to:
DANIEL P. GALLAGHER, CHIEF INVESTMENT OFFICER
LOS ANGELES CITY EMPLOYEES’ RETIREMENT SYSTEM
ATTENTION: REQUEST FOR PROPOSAL FOR CONSULTANT OF ALTERNATIVE INVESTMENTS
360 EAST SECOND STREET, 2nd FLOOR
LOS ANGELES, CA 90012-4207
M. SOFT COPY E-MAIL INSTRUCTIONS: The proposal must also be completed on the formatted attached Excel spreadsheet in the format provided by LACERS, and e-mailed back to LACERS at . The spreadsheet is available for downloading from the web page at www.lacers.org. Do not change the format of the spreadsheet, or any of the cells within. Please follow the instructions listed at the top of the spreadsheet.
N. DEADLINE: All 13 completed copies of the final proposals must be received at LACERS’ office by 4:00 PM Pacific Daylight Time on June 10, 2004. Date and time will be recorded on the proposals upon their arrival. No exceptions to this deadline will be granted.
O. RFP GENERAL OUTLINE FORMAT: The proposer’s response to this proposal must be organized, indexed and tabbed in three ring binders in the following format:
1. Cover Page titled “RFP for Consultant of Alternative Investments”
2. Company Questionnaire
3. Signed Minimum Qualification Warranty and Warranties
4. Fee Proposal
5. Questionnaire Responses
6. Appendices
P. The company questionnaire MUST:
1. Identify the RFP as “RFP for Consultant of Alternative Investments;
2. Identify the submitting organization;
3. Identify the name and title of the person authorized by the organization to contractually obligate the organization and be signed by that person;
4. Identify the names, titles and telephone numbers of persons to be contacted for clarification;
5. Have signed and attached the included forms.
Q. 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. Further, each question number and question in the RFP shall be repeated in its entirety before the answer.
R. Proposers may attach other materials that they feel may improve the quality of their responses. However, these should be included as items in Exhibit B.
S. DEFINITION OF TERMS - -“Consultant” may include both non-discretionary and discretionary client relationships and inclusive of ‘advisory’ and ‘fund of funds’ services. “Advisory” refers to non-discretionary client relationships. “Fund of Funds” refers to discretionary relationships.