CITY OF LAKEWOOD

5050 Clark Ave.

Lakewood, CA 90712

REQUEST FOR PROPOSAL

FOR INVESTMENT ADVISORY FIRMS

The City of Lakewood is soliciting proposals from investment advisory firms for portfolio management services for two government reserve funds.

Investment practices and procedures must comply with California law and the City of Lakewood investment policy. Firms responding to this request for proposal are invited to suggest changes that might be appropriate in the investment policies that would govern the segment of the portfolio to be managed externally.

I.Criteria for Selection

Selection of a professional investment advisory firm is at the sole discretion of the City of Lakewood, which includes, but is not limited to the following:

  • Understanding of the City of Lakewood overall investment program and the investment objectives and constraints unique to City of Lakewood.
  • Experience, resources, and qualifications of the firm and individuals assigned to this account.
  • Experience of the firm in managing state/local/district government reserve funds. In evaluating the firm’s experience, past performance data will be evaluated in the context of portfolio objectives and constraints, as well as risks.
  • Recommended approach to management of the City of Lakewood portfolio.
  • Additional investment of financial services offered or available through affiliation.
  • Fees, relative to services.

II.Format for Proposals

Please format your response to this request in the following order to facilitate comparisons between respondents:

A.Organization

  • Describe the organization, date founded, and ownership of your firm and any subsidiaries and affiliates relevant to the government entity.
  • Describe any other business affiliations (e.g., subsidiaries, joint ventures, “soft dollar” arrangements with brokers) that would affect investment performance of the government entity’s account. Would you pay, or have you paid a finder’s fee to any third party for business related to this account?
  • Describe the firm’s primary sources of revenue and types of accounts currently under advisement, categorized between retail and institutional accounts.
  • Describe any SEC or regulatory censure or litigation within the past three years involving institutional business your firm conducts with governmental investors or regulatory censure or litigation involving any individuals added to the firm in the past three years.
  • Identify and provide background information on the key person or personnel who take the most active role(s) in the administration and management of the firm.
  • Identify the types of accounts primarily sought by your firm.
  • Describe your firm’s research capabilities and resources. How and when does your firm assign credit research to specialists?
  • Describe your credit review process. Who reviews portfolio lists for credit approved?
  • Provide evidence of required insurance coverage:
  • Commercial general liability at least as broad as ISO CG 0001 (per occurrence) 1,000,000 (general aggregate) 2,000,000
  • Commercial auto liability at least as broad as ISO CA 0001 (per accident) 1,000,000
  • Errors and omissions liability (per claim and aggregate) 1,000,000
  • Worker’s compensation- Statutory

B.Personnel

  • Identify the number of investment professionals (portfolio managers, analysts, and researchers) employed by your firm, by classification and specify the average number of accounts held by portfolio managers. Are there any established limits on accounts or assets under management?
  • Identify the size and key personnel of your staff commitment tot he public sector, along with their credentials.
  • Provide biographical information on investment professionals that will be directly involved in the decision-making process for the portfolio.
  • What efforts does your firm make to keep portfolio managers informed of developments relevant to government investment managers?
  • Has there been any turnover of professional staff in the firm in the last 12 months? Have there been any additions?

C.Assets Under Management

  • Summarize your institutional investment management asset totals by category for your latest reporting period in the following table:

Operating FundsReserve Funds

Governmental$______$______

Other Institutional$______$______

  • Summarize your assets under management (institutional only) over the past five years. Categorize as appropriate (expand) to include cash component.
  • Provide relevant performance statistics on operating and reserve funds, and compare with appropriate industry averages or benchmarks.
  • List your five largest clients or most representative governmental clients. Identify those that are exclusively retirement fund relationships and/or those that are operating or reserve fund relationships along with contact names for each.
  • How many accounts have you gained in the last 12 months? How many accounts have been lost in the last 12 months and why? Please provide a complete list of clients.

III.Investment Management Approach and Discipline

  • In your investment decision-making process, are there one or more people who predominate?
  • Describe how your firm organizes its investment management process. What oversight is provided to portfolio managers?
  • What are the primary strategies for adding value to portfolios (e.g., market timing, credit research, trading)?
  • Describe the process you would recommend for establishing the investment objectives and constraints for this account’s two reserve funds.
  • How will you handle fluctuating cash flows and the cash forecasting process?
  • What is your firm’s experience in developing investment policies and portfolio management guidelines for governmental operating and reserve funds?
  • How frequently would you suggest that your staff meet with the government entity’s staff? Who will attend briefings?
  • How are differences in account policies and objectives managed and reconciled in-house?
  • What percentage of your research is conducted in-house? Describe your research capability.
  • What interest-rate forecasting analysis do you use in your bond management strategy?
  • What technical analysis do you use in your bond management strategy?
  • How frequently do you formulate and review fixed income strategy? How is that carried out and who is involved?
  • How are portfolios managed (e.g., by team, individual manager)? What is the back up when the manager is away?
  • How do you propose to resolve any conflict of interest that could develop in the broker/advisor and advisor relationship?
  • Under what market conditions would you transfer funds into and out of LAIF and/or the County Treasury?

IVReporting

  • Describe the frequency and format of reports that you would provide to the government entity’s staff. Attach complete examples.
  • What performance benchmarks would you suggest for this portfolio, and why?

V,Fees

  • Provide a fee schedule that would apply to this account.
  • If alternate fee schedules could be developed, such as performance fees, describe how you would propose to develop such fee structures.
  • What expenses would be covered through the fee structure?
  • What additional costs would be required in order to implement your program (e.g., bank custodial fees, travel expenses, etc.)?

VI.References

  • Provide three references (identify as short-, intermediate-, and/or long-term funds), including length of time you have managed their assets, client name, contact personnel, address and phone number.
  • Provide references, if appropriate, from non-client organizations that can attest to the professional reputation of your firm and its personnel.

VII.Submission Deadline

  • Please send seven (4) copies of your proposal accompanied by annual audited financial reports to:

Ms. Denise Hayward

City Clerk

City of Lakewood

5050 Clark Ave.

Lakewood, CA 90712

The deadline for proposals is September 28, 2007.

Enclosures: City of Lakewood Investment Policy

Portfolio Report as of July 31, 2007.