Request for Proposals Investment Management Services

Transcription

1 Request for Proposals Investment Management Services Deadline: March 19, 2018, 4:00 P.M. Questions concerning this solicitation must be submitted by March 9, 2018, 11:30 a.m. at Questions should be submitted in a Microsoft Word attachment. All questions received and the respective responses will be posted on the Rhode Island Foundation website, 1

2 TABLE OF CONTENTS SECTION 1. Introduction SECTION 2. Firm Overview SECTION 3. Investment Policy Statement SECTION 4. Risk Management SECTION 5. Performance SECTION 6. Fees and Compensation SECTION 7. Client Service and Reporting SECTION 8. Dates of Performances SECTION 9. Selections Criteria SECTION 10.. Proposal Submission Appendix Investment Policy 2

3 SECTION 1: INTRODUCTION The (Foundation), an independent 501 C3, is soliciting proposals from qualified firms to provide investment management services for the Foundation. The objectives are to protect, grow and steward Foundation s Endowment. The selected firm(s) will advise both the Foundation s Executive Director and the Board of Directors on investment strategies. Prospective managers should submit a proposal that encompasses the entire endowment. The Foundation reserves the right to allocate and or apportion assets to the managers as deemed appropriate. Rhode Island College is located on a 170-acre campus in the Mount Pleasant section of Providence, Rhode Island. Academic offerings are provided in five schools: the Faculty of Arts and Sciences, the Feinstein School of Education and Human Development, the School of Management, the School of Nursing and the School of Social Work, as well as the Office of Professional Studies and Continuing Education. Established in 1854, Rhode Island College serves approximately 8,500 undergraduate and graduate students in courses and programs both on and off campus. The college is the first public higher education institution in Rhode Island. The college operates under the aegis of the Rhode Island Council on Postsecondary Education and is supported by the State of Rhode Island. The, established in 1965, is a separate but affiliated enterprise that is devoted to raising funds to support Rhode Island College. The Foundation exercises fiduciary responsibility over endowments and other philanthropic investments made to Rhode Island College. The Foundation s investment portfolio is currently over $30 million with an additional $3 million in cash assets. The investment portfolio is currently managed by three independent investment managers each of whom manages a portion of the endowment portfolio. The final selection of the asset management firm(s) rests solely with the Foundation and/or the Board s appointed representative(s). Said selection process will be heavily based on the ability to assist the Foundation in its quest to optimize its returns while limited risk. As well as provide a dynamic asset management capabilities that is both opportunistic and tactical. Instructions and Notifications to Offers 1. Potential vendors are advised to review all sections of this RFP carefully and to follow instructions completely, as failure to make a complete submission as described elsewhere herein may result in rejection of the proposal. 2. Alternative approaches and/or methodologies to accomplish the desired or intended results of this procurement are welcomed. However, proposals which depart from or materially alter the terms, requirements, or scope of work defined by this RFP may be rejected as being non-responsive. 3

4 3. All costs associated with developing or submitting a proposal in response to this RFP or to provide oral or written clarification of its content shall be borne by the vendor. 4. All pricing submitted will be considered to be firm and fixed unless otherwise indicated herein. 5. Proposals misdirected to other locations or which are otherwise not present in the Foundation at the time of opening for any cause will be determined to be late and may not be considered. 6. It is intended that an award pursuant to this RFP will be made to a prime vendor(s) who will assume responsibility for all aspects of the work. Joint venture and cooperative proposals will not be considered. Subcontracts are permitted, provided that their use is clearly indicated in the vendor s proposal and the subcontractor(s) to be used is identified in the proposal. 7. All proposals should include the vendor s FEIN or Social Security number as evidenced by a W9. SECTION 2: FIRM OVERVIEW 1. Please provide the legal name, address and contact information for your firm. 2. Describe your experience, including duration, with nonprofit organizations. How many nonprofit clients do you currently manage that are similar to us in terms of asset size and type? Please describe potential conflicts of interest. 3. Please describe your executive leadership, investment personnel and client service teams to include biographies and professional backgrounds, designations and clientele. 4. What are the total AUM (Assets Under Management) assets with the firm? The total AUM assets with the team? 5. Please provide your firms, or parent company, credit rating and or other indication of credit quality. 6. What are you capabilities with alternative investments and ability to assume alternatives already in place? How do ESG investments factor into your portfolio? 7. What portion of the firm s assets are represented by the total OCIO (Outsource chief investment officer)? What portion of the team s assets are OCIO? 8. What portion of revenue are derived from investment manager teams? 4

5 9. Please provide the following information about your team s assets: Asset Class Firm Assets ($MM) % of Firm Total Assets Discretionary OCIO AUM ($MM) % of Discretionary OCIO AUM Equity - Traditional Fixed Income - Traditional Hedge Strategies Private Alternatives and Distressed Debt Real Assets Cash and Equivalents Total: 10. How many professionals will support the RIC Foundation OCIO business? Please provide average tenure and years of experience. Full-Time Employees # Investment Professionals OCIO Professionals Client Service and Sales Marketing Legal and Compliance Accounting Information Technology, Operations & Finance Risk Management Human Resources & Administration Total: 11. Segment your client base at the firm and outsourced levels as of 12/31/2016 as follows: Client Type Number of Firm Clients Firm Client Assets Under Mgt. ($MM) % of Firm Total Assets Number of OCIO clients OCIO Client Assets under Mgt. ($mm) % of OCIO Total Assets Educational Endowments Foundations Healthcare Organizations High Net Worth Clients Family Offices Other Total: 5

6 12. Please describe your sources of revenue. Do you share revenue or receive revenue from any source other than asset management services? If so, please describe. Category Revenue $MM Revenue % Management Fees Incentive Fees Trading and proprietary fund Fees Other Total Revenue SECTION 3: INVESTMENT POLICY STATEMENT 1. Describe your firm's investment philosophy and process. 2. Does your firm advise on the formulation of written investment goals and policies? 3. Please submit an investment policy statement for the RIC Foundation Endowment. 4. Detail your due diligence and manager search capabilities. Describe your ability and experience gaining access to capacity constrained managers and explain your allocation policy for capacity constrained investment opportunities. 5. Does your firm maintain a database of investment managers? If so, does your firm sell data? Does your firm charge for inclusion? If no, where does your firm purchase said services? 6. Describe in detail the firm's depth and experience in researching, selecting and monitoring managers in alternative asset classes, such as hedge funds, private equity, real estate, distressed debt and commodities. 7. Describe how you will work with the Foundation board of directors, Investment Committee and staff to develop an effective asset allocation structure. 8. Describe how you would respond to market volatility, communications with staff and the committee and decisions surrounding re-allocation discussions. 9. Describe how you design portfolios for clients, including the types of investment vehicles used and whether or not you recommend proprietary products. Please include your firm s experience in identifying, evaluating and recommendations pertaining to alternative investments. 10. Describe your experience working with multiple managers. Section 3A: Active vs Passive Management: 6

7 If you intend to use active management please describe how it is superior to passive management. if you intend to use passive management please describe how it is superior to active management. SECTION 4: RISK MANAGEMENT 1. Describe your investment risk management process. 2. How do you measure risk of your client s portfolios? Do you utilize options? Margin? Futures? SECTION 5: PERFORMANCE 1. Asset Allocation - The Foundation s goal is for the portfolio to reach achieve an annual total minimum return of 7% over a 3-5 year period. Please describe how the Foundation s $30 million portfolio should be allocated: Domestic Fixed Income International Fixed Income Domestic Equities International Equities Alternative Investments Provide 1, 3 and 10 year return and risk expectations for the portfolio designed. Include strategic asset allocation (by traditional asset class or other segmentation as you choose), types of managers within each segment, and specific examples of managers. Include any portfolio elements you deem useful, including: passive exposures; active longonly strategies; hedge funds; primary and secondary investments of private equity, etc. You may implement the portfolio with 100% proprietarily managed strategies, 100% externally sourced strategies, or any combination of the two. 2. Provide peer client and aspirational client performance for the Foundation. Provide size and type of institution of each client and their benchmark. 3. For clients for similar returns on objectives as described in section 1, please provide composite historic performance to include one, three, five and ten years as of 12/31/2016. Please provide the one, three, five and ten-year annualized returns (as available) against appropriate benchmark returns and 5 and 10 year standard deviation and Sharpe ratios for the investment programs(s) above. Please present returns net of investment management/advisory fees. SECTION 6: FEES AND COMPENSATION 7

8 1. What is your advisory fee for services rendered? Do you allocate to managers that also charge a fee? Do you allocate mutual funds and or ETFs that charge a fee? 2. Describe all other fees that may apply. 3. What are the total fees you or managers you work with charge to the Foundation for the portfolio designed above? Please provide fee allocation in the table below: Category Basis Points or $ Advisory Fee Manager/Fund Fees Commingled/Partnership Expenses Other (custody, tax, audit, etc.) Total Fees 4. Is an alternate fee structure available example - base fee plus incentive fee option? 5. Please describe how your investment personnel and client service teams are compensated. SECTION 7: CLIENT SERVICE AND REPORTING 1. Describe your client service roles and responsibilities. 2. Describe your ability to provide consolidated reporting. How is consolidated reporting provided? 3. Describe your ability to patriciate in quarterly, in-person, investment performance meetings and monthly conference calls. 4. Describe other services you provide to nonprofit institutions, such as web-based reporting and back office support, etc. 5. Describe the educational materials and programs available to clients. 6. Describe your process to monitor client satisfaction. 7. What are your competitive or distinctive advantages? 8. If not described somewhere else within this document, how do you help support your clients endowments, fundraising and other non-investment activities? Are there any value added attributes of your firm? 8

9 9. Why is your firm the best option for the? Please share any additionally information your feel is relevant including awards and recognitions. SECTION 8: DATES OF PERFORMANCE The term of services requested will be for the period of approximately July 1, 2018 until June 30, The Foundation reserves the right to cancel the agreement prior to the ending date by giving thirty (30) days written notice to the vendor. SECTION 9: SELECTION CRITERIA AND PROCESS 1. Relevant experience in investment management services for college, university or related community foundations comparable to Rhode Island College and the Rhode Island College Foundation. 2. Demonstrated performance in investment management services for college, university or related community foundations comparable to Rhode Island College and the Rhode Island College Foundation. 3. Specific qualifications and experience of the principal(s) and subordinate team members to be assigned. 4. Ability to advise, communicate and provide exceptional services to the Foundation board of directors and staff. 5. Proposed fee structure for the services requested. It is anticipated that, following the receipt of proposals, designees of the Foundation shall review the proposals and determine the need to conduct interviews with any respondents. Following the review of proposals and interview process, if any, the Foundation or their designee(s) will select a consultant to provide the services. SECTION 10: PROPOSAL SUBMISSION Questions concerning this solicitation may be ed to the at epacheco@ric.edu. Respondents should submit (5) original copies be mailed or hand-delivered by 4 p.m., March 19, 2018 in a sealed envelope addressed to: 9

10 Attn: Edwin R. Pacheco Executive Director East Campus, Kauffman Center 600 Mt. Pleasant Avenue Providence, RI NOTE: Proposals received after the above-referenced due date and time will not be considered. 10