[Type text]

April 30, 2012

Dear Potential Provider:

The Massachusetts Pension Reserves Investment Management Board (“PRIM”) is requesting proposals from firms interested in providing Active US Small/Mid (SMID) Market Capitalization (Cap) Equity Investment Management Services.

To be considered for selection, candidates must respond to the Request for Proposals (RFP) by submitting an electronic copy of its response via e-mail to eceived by 3:00 p.m. EDT on Tuesday, May 29, 2012. In addition, one original and one hard copyof the response should be sent to:

Ms. Sarah N. Samuels, CFA

Investment Officer – Public Markets

Pension Reserves Investment Management Board

84 State Street

Boston, Massachusetts 02109

Further instructions for response submission are included in the RFP. Questions concerning the RFP must be submitted to the Procurement Officer no later than3:00 p.m. EDT on Monday, May 7, 2012.

We appreciate the time and effort required to respond to this RFP. Each respondent submitting to PRIM can be assured that the same time and effort will be expended in evaluating the responses that are submitted for consideration. We look forward to your response.

Sincerely,

Michael G. Trotsky, CFA

Executive Director

PENSION RESERVES INVESTMENT MANAGEMENT BOARD

84 State Street, Boston, Massachusetts 02109

REQUEST FOR PROPOSALS (RFP)

Active US SMID Cap Equity Investment Management Services

April 30, 2012

I.SCOPE OF SERVICES.

The purpose of this RFP is to solicit proposals from qualified investment management firms with demonstrated expertise in investing in US SMID Cap Equity stocks to manage an active US SMID Cap Equity mandate on behalf of PRIM. PRIM’s goal is to select investment manager(s) based on PRIM’s evaluation of submitted Proposals in accordance with the Selection Criteria contained in Section VIII of this RFP. Proposals submitted for other services will NOT be accepted. Investment manager(s) selected to perform these services will be required to perform the following additional services for PRIM: (1) submit monthly transaction statements within two weeks of each calendar month end; (2) attend semi-annual performance reviews in Boston, Massachusetts; and (3) participate in annual on-site visits by PRIM staff.

ll.BACKGROUND INFORMATION.

A.Legal Structure of PRIM.

PRIM was created in 1983 by the Commonwealth of Massachusetts through legislation (Chapter661 of the Acts of 1983, as amended by Chapter315 of the Acts of 1996) to provide general supervision of the investments and management of the Pension Reserves Investment Trust (“PRIT”) Fund. The PRIT Fund was created by the same legislation and is the investment portfolio for the assets of the State Employees’ and State Teachers’ Retirement Systems, as well as local retirement systems that choose to invest in the PRIT Fund.

PRIM is governed by a ninemember board of trustees. The trustees include: (1)the Governor, ex officio, or his designee; (2)the State Treasurer, ex officio, or his designee, who shall serve as Chair of PRIM; (3)a private citizen, experienced in the field of financial management, appointed by the State Treasurer; (4)an employee or retiree, who is a member of the State Teachers’ Retirement System, elected by the members of such system, for a term of threeyears; (5)an employee or retiree, who is a member of the State Employees’ Retirement System, elected by the members of such system for a term of threeyears; (6)the elected member of the State Retirement Board; (7)one of the elected members of the Teachers’ Retirement Board chosen by the members of the Teachers’ Retirement Board; (8)a person who is not an employee or official of the Commonwealth appointed by the Governor; and (9)a representative of a public safety union appointed by the Governor. Appointed members serve for a term of fouryears.

The mission of the PRIT Fundis to ensure that current and future pension benefit obligations are adequately funded in a costeffective manner. PRIM therefore seeks to maximize the total return on investments within acceptable levels of risk for a public pension fund. Under current law (as amended by Section 45 of Chapter 68 of the Acts of 2011) by the year 2040, the PRIT Fundwill have grown, through annual payments in accordance with a legislatively approved funding schedule and through total return on investment of the PRIT Fund, to an amount sufficient to meet the thenexisting pension obligations of the Commonwealth. The Commonwealth has adopted a schedule of state pension appropriations that assumes a longterm actuarial rate of return for the PRIT Fund of 8.25%.

The ninemember board of trustees, as trustees for each retirement system that invests in the PRIT Fund, has the authority to employ an Executive Director, outside investment managers, custodians, consultants and others as it deems necessary; to formulate policies and procedures; and to take such other actions as necessary and appropriate to manage the assets of the PRIT Fund.

PRIM is the legal custodian of the PRIT Fundand has fiduciary responsibility for the assets transferred to the PRIT Fundby state and local retirement systems. PRIM selects the PRIT Fund’sinvestment managers and advisors, reviews and evaluates total PRIT Fundand individual investment manager performance, and performs various other activities in the daily management of the PRIT Fund. As of March 31, 2012, the PRIT Fundhad net assets totaling approximately $50 billion.

PRIM has established advisory committees (Investment, Administration & Audit, Real Estate & Timber, and Compensation) to provide a broad range of input to the Board. These committees are generally comprised of several Board members and also private citizens with investment and/or business expertise. All significant policies and investments are ultimately approved by the Board.

Please refer to Exhibit C for PRIM’s Operating Trust Agreement.

B. MGL Chapter 32.

PRIM is governed by Massachusetts General Laws (“MGL”), Chapter 32, Sections 22 and 23 (weblink attached at Exhibit F) and oversees the PRIT Fund under the terms of PRIM’s Operating Trust dated July 15, 1988 and amended on September 22, 1998 (attached as Exhibit C). The members of the Board, in conjunction with the Executive Director, who serves at the pleasure of the Board, determine significant policies and decisions concerning the administrative and investment operations of PRIM and the PRIT Fund.

C. MGL Chapter 268A.

The Massachusetts Conflict of Interest Law (weblink attached atExhibit F) applies to PRIM, including its employees and volunteers, and can apply whether paid or unpaid, full or part-time, intermittent or temporary, and can apply to what such persons may do on the job, after hours, on the side, and/or what they may do after they leave PRIM service.

D. MGL Chapter 30A, Sections 18-25.

The Massachusetts Open Meeting Law (MGL Chapter 30A, Sections 18-25, weblink attached atExhibit F) ensures transparency in public policy deliberations. Because the democratic process depends on the public having knowledge of the considerations underlying governmental action, the Open Meeting Law requires, with some exceptions, that meetings of public bodies such as PRIM be open to the public. It also seeks to balance the public’s interest in 1) observing the deliberations of public officials with 2)the government’s need to manage its operations effectively and efficiently.

E.General Description of PRIM’s Assets.

Exhibit A.1 includes a description of PRIM Board’s target asset allocation as of August 2, 2011.

F. Tobacco, Sudan and Iran Divestiture.

On October 7, 1997, the Massachusetts legislature enacted, and the Governor signed into law, Chapter 199 of the Acts of 1997, which forbids the PRIT Fund from purchasing securities “of any company which derives more than 15 per cent of its revenues from the sale of tobacco products.” The legislation also required the PRIT fund to divest itself of all such securities within three years; this divestment was largely completed before the end of 1997. PRIM provides investment managers with a quarterly listing of these restricted securities.

On November 2, 2007, the Massachusetts legislature enacted, and the Governor signed into law, Chapter 151 of the Acts of 2007, which forbids the PRIT Fund from purchasingthe securities of companies determined to be doing business in the Sudan. The legislation required the PRIT fund to divest itself of all such securities within 12 months. PRIM provides investment managers with a quarterly listing of these restricted securities.

On August 4, 2010, the Massachusetts legislature enacted, and the Governor signed into law, Chapter 232 of the Acts of 2010, which forbids the PRIT Fund from purchasingthe securities of companies determined to be doing business in Iran. The legislation requires the PRIT fund to divest itself of all such securities within 12 months. PRIM provides investment managers with a quarterly listing of these restricted securities.

G. PRIM’s Advisors.

Outside advisors are engaged for their particular expertise and retained to assist PRIM in areas such as general portfolio strategy and investments, real estate, and private markets. Callan is PRIM's general consultant, New England Pension Consultants provides asset allocation consulting services, CliffWater Associates serves as direct hedge fund consultantand fund-of-funds hedge fund consultant, Hamilton Lane is the private equity consultant, and The Townsend Group provides real estate and timber consulting services. KPMG is the Fund’s Real Estate, Timber and Hedge Fund of Funds auditor. Deloitte provides general tax services. BNY Mellon is the Fund's custodian and is responsible for providing record-keeping and analytic performance valuations for the Fund.

Please refer to PRIM’s website at to obtain additional information about PRIM.

III.RFP SPECIFICATIONS.

A.Deadline for Proposals.

Proposals, including all attachments, must be delivered electronically via e-mail eceived by 3:00 p.m. EDT on Tuesday, May 29, 2012 (the “Proposal Deadline”). Any Proposal received after the Proposal Deadline will not be considered. The e-mail subject header must be in the following format: “PRIM US SMID Cap RFP Response – Name of Responding Firm.”

In addition, one original and one copy of the Proposal should be delivered by 3:00 p.m. EDT on Tuesday, May 29, 2012 to PRIM as listed below:

Ms. Sarah N. Samuels, CFA

Investment Officer – Public Markets

Pension Reserves Investment Management Board

84 State Street, Suite 250

Boston, Massachusetts 02109

In addition, please e-mail your proposal to to the following representative of PRIM’s long-only consultant:

Ms. Mildred Viqueira

Senior Vice President

All electronic documents submitted must be 10MB or smaller in size. If necessary, the respondent should separate the RFP submission into multiple emails to ensure that the 10 MB size requirement is met. The respondent is responsible for ensuring that a complete electronic RFP response is received prior to the Proposal Deadline.

The questions and/or requests made in this RFP should be duplicated in their entirety in the submitted response, with each question/request followed by an answer or response.

Faxed transmissions are NOT acceptable.

Copies of this RFP can be obtained electronically fromthe PRIM website at

B.Required Enclosures and Attachments.

In addition to the responses to the questions in Section VII of this RFP, the following information must be included in your response.

1.Cover Letter. Proposals must be accompanied by a cover letter, which will be considered an integral part of the Proposal, and which shall be signed by at least one individual who is authorized to bind the respondent contractually. This cover letter must include: (a) the Respondent’s name, address, telephone number and e-mail address; (b) the name of the primary contact at the Respondent for the PRIM account should the respondent be selected; (c) the title or position which the signer of the cover letter holds at the respondent; and (d) a statement to the effect that the Proposal and its Fee Proposal serve as a firm and irrevocable offer to provide services to PRIM.

2.Representations and Warranties. The Representations and Warranties contained in Section IX hereof, signed by an authorized representative of the respondent, must be included as an attachment to the cover letter referenced in (1) above.

3.Disclosure Statement. Attached to this RFP as Exhibit Dare two Disclosure Statements, one for PRIM and one for the Public Employee Retirement Administration Commission (PERAC). Each respondent submitting a Proposal must complete the two disclosure forms and submit both as attachments to the cover letter referenced in (1) above. YOU MUST COMPLETE AND INCLUDE BOTH THE PRIM AND PERAC DISCLOSURE FORMS OR YOUR SUBMISSION MAY NOT BE CONSIDERED.

4.Fee Proposal. Each response must include a “Fee Proposal.”

C.Public Record.

In accordance with MGL Chapter 66, Section 10 and Chapter 4, Section 7(26) (h), all materials submitted in response to this RFP are public records and as such are subject to requests for disclosure of public records.

D.Waiver/Cure of Minor Informalities, Errors and Omissions.

PRIM reserves the right to waive or permit cure of minor informalities and/or errors and/or omissions prior to the selection of finalists, and to conduct discussions with any respondent and to take any other measures with respect to this RFP in any manner to serve the best interests of PRIM and its beneficiaries.

E.Communications with PRIM.

PRIM’s Procurement Officer for this RFP is:

Ms. Sarah N. Samuels, CFA

Investment Officer – Public Markets

Pension Reserves Investment Management Board

84 State Street, Suite 250

Boston, Massachusetts 02109

Telephone: (617) 946-8469

Persons and/or entities intending to submit a response to the RFP should not contact PRIM after April 30, 2012 (including PRIM staff, members of the PRIM advisory committees, members of PRIM, or employees of the Massachusetts Treasury), other than the Procurement Officer listed above. In addition, respondents should not discuss this RFP with any employee of PRIM’s custodian, managers, consultants, legal counsel, or other advisors or persons/entities having contracts or other affiliations with PRIM.

FAILURE TO OBSERVE THIS RULE IS GROUNDS FOR DISQUALIFICATION.

F.Questions Regarding this RFP.

All questions concerning this RFP must be delivered to the Procurement Officer via email by3:00 p.m. EDT on Monday,May 7, 2012 (the "Question Deadline"). Questions received in accordance with this section will be answered and circulated by e-mail to all respondents who have proposed a question or who have requested by email a copy of submitted questions and PRIM’s responses. Questions, or requests for the complete listing of questions and answers, submitted after the Question Deadline will not be considered.

G.Incurring Costs.

PRIM is not responsible for any costs incurred by a respondent in responding to this RFP.

H.Withdrawal/Irrevocability of Responses.

Respondents may withdraw and resubmit Proposals prior to the Proposal Deadline. No withdrawals or re-submissions will be allowed after the Proposal Deadline.

I.Rejection of Responses; Cancelation.

PRIM reserves the right in its sole discretion to reject any response, as well as the right to reject all responses submitted in response to this RFP, and to cancel and rescind the procurement at any time, for any reason or for no reason.

IV.MINIMUM QUALIFICATIONS.

A Respondent must meet each of the following minimum qualifications in order to be given further consideration. Failure of a Proposal to demonstrate that it meets these minimum qualifications will result in the Proposal’s rejection.

Basic Minimum Qualifications.

All proposal must demonstrate that the respondent meets the following minimum qualifications. Please provide a detailed response to each question below indicating how your firm meets each minimum qualification:

  1. The proposing firm must be submitting an active US SMID Cap Equity product, or similar product, and must be willing to be benchmarked to the Russell 2500 Index.
  1. The investment professionals must have at least a three year performance history in the subject product as of March 31, 2012.
  1. The senior investment professionals whose performance history is submitted with respect to the subject product should be substantially the same individuals over the last three years, and will be the team responsible for the management of the PRIM account.
  1. The proposing firm must have at least $500 million in assets under management in the subject product as of March 31, 2012.
  1. The 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).
  1. The proposing firm must have at least five U.S. tax-exempt institutional clients invested in the subject product, as of March 31, 2012.
  1. The proposing firm must have been in operation as an investment management organization for at least three years as of March 31, 2012.
  1. The proposing firm must be willing to include the attached representations and warranties in the contract if selected as the manager to the PRIM Board.
  1. The proposing firm must not be proposing a manager of managers strategy.

V.SELECTION PROCESS & SELECTION CRITERIA.

Proposals will be evaluated by a search committee that may include members of the PRIM Board, its advisory committees, staff, and others. Respondents may be invited to interview with the search committee should the search committee determine that such an interview would be helpful; responses and respondents may, however, be evacuated solely on the basis of the submitted Proposal, without an interview. The search committee will present its results and issue a recommendation to the Investment Committee. The Investment Committee will then present its recommendation to the PRIM Board. After decision by the PRIM Board, PRIM will award the contract(s) to the selected respondent(s).

PRIM will apply the criteria set forth below in reviewing the respondents’ qualifications. The search committee will assign a rating of either "Highly Advantageous", "Advantageous", "Acceptable", or "Unacceptable" to each of the categories listed below. Respondents receiving a rating of "Unacceptable" in any category will likely not be considered further.

  1. Stability and General Experience of the Firm.
  1. Stability of the firm and the expected financial stability of the firm.
  2. Experience of the firm in providing investment management services to similar institutional investors.
  1. Experience and Stability of the Proposed Team Dedicated to PRIM.
  1. Experience of portfolio manager(s) in providing similar services to similar institutional investors.
  2. Experience of other supporting staff in providing investment management services to similar institutional investors.
  1. Client References.
  1. Stability of the firm's client base, as measured by the number of accounts gained or lost in the subject product since March 31, 2009.
  2. Quality of the client references.
  1. Process.

Consistent process implementation, as measured by return consistency, buy/sell disciplines, portfolio construction methodology, and the implementation of risk controls.