Questions with Responses in Regard to the RFP for Investment Management Services for the Louisiana Asset Management Pool

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2 1) Could you please clarify the following question under section V. INFORMATION REQUESTED, A. Program Support, which asks respondents to verify that they can provide each and every service outlined in Section II A: Program Services and General Operational Information. Section II A seems to refer to those services that would be provided by the participant services provider/participant record keeper and not the investment manager. Is this a correct interpretation of your expectations?, the services outlined in Section II A are currently being provided by LAMP s fund accountant, Cutwater Asset Management. 2) Would the executive officers and Board of Directors of LAMP, Inc. be willing to consider a bundled bid wherein the functions of investment management, custody, and participant services and record keeping are combined and delivered in a full service model by the contending firm? If so, in what format would the decision makers of LAMP prefer to receive the details and pricing of such a bid? For purposes of this RFP the LAMP, Inc. board of directors will primarily be evaluating investment management services, and therefore you should provide your proposal for investment management services. However, if your firm is interested in presenting an investment management proposal and a separate all-in bundled bid please feel free to present that information as well. 3) What has been the history of the participants use (frequency and volume) of arbitrage rebate tracking services? Has it been customary for participants to seek these services from the current investment manager? If so, what if any additional fee is currently charged? LAMP currently has 3 bond issues that require arbitrage rebate tracking services. LAMP is using an outside firm to prepare these calculations at no cost to participants. 4) How are arbitrage rebate services currently being handled and by whom? Is the current Investment Manager providing them or are they using a third party provider? LAMP is using a third party provider, PFM Asset Management, LLC.

3 5) What criteria will be used to determine a responding firm's "Ability to assist the LAMP in its marketing effort to political subdivisions in the State of Louisiana (VII. C. p. 20)? From time to time LAMP anticipates requesting assistance from the investment advisor to attend local government conferences or presentations. The investment advisor is also a presenter at the LAMP annual meeting. LAMP may also request assistance from the investment advisor to develop marketing presentations for prospective participants. An affirmative response to the firm s Ability to assist the LAMP in its marketing efforts to political subdivisions in the State of Louisiana will receive 15% in the evaluation of the RFP responses. 6) Do you have a list of preferred Louisiana based broker/dealers? LAMP does not maintain a list of Louisiana based broker/dealers. LAMP would expect the investment manager to execute trades on a best execution basis. 7) Is the LAMP eligible to use the Fed's Reverse Repo Program? If so, is the current manager utilizing this program? If it is not currently being utilized, would LAMP consider using it should the need and opportunity arise? LAMP is not eligible to use the Fed s Reverse Repo Program (RRP). LAMP does not satisfy the initial eligibility requirement. 8) Please describe the current and expected flow of information between the administrator and investment manager including intraday and day end portfolio holdings. Does the administrator provide the investment manager with portfolio holdings information that is reconciled with the custodian on a daily basis (or other frequency)? Holdings between the custodian and the administrator are reconciled daily. An unaudited holdings report is provided to the investment manager at the close of business each day.

4 9) Does the administrator provide intra-day cash flows (deposits/redemptions)? If so, how often during the day? What information is the investment manager required to provide to the administrator? Daily cash availability is provided after the pool closes each day at 11:00 a.m. CT. This file contains the investment activity (provided electronically by the investment manager), maturities/calls/income, and LAMP participant activity. The investment manager is required to provide trade tickets to the administrator electronically on a timely basis. 10) Please describe the on-site marketing assistance to be provided by the investment manager. Please see response to Question #5 11) How many investor transactions on average does LAMP have on a monthly basis? In 2013 LAMP participants averaged 890 transactions a month. 12) Are wire fees fund specific or client specific? Wire fees are fund specific 13) How many issuers may take advantage of arbitrage rebate services? Any LAMP participant that invests bond proceeds in their LAMP account may take advantage of the arbitrage rebate services. 14) On page 11 of the RFP under program support, Sections I, II, and V are referenced. Please confirm if these are the correct sections to refer to when answering the questions. 15) On page 4 the request for proposal states that the current administrative fee is 19.5 basis points annually. Are the investment advisory, portfolio management and custody fees included in the 19.5 basis point administrative fee? If not, can you provide the appropriate break down?

5 16) Section E Item 7 states that "As a matter of policy, LAMP, Inc. wishes the investment manager to execute trades with Louisiana based broker/dealers on a competitive basis." Does LAMP have any internal guideline established on the number or percentage of trades desired to satisfy this requirement? Please refer to the response of question 6 above. 17) Does LAMP require investment portfolio reporting from the investment advisor or is this reporting provided by the custodian? Investment portfolio reporting is currently provided the custodian and the fund accountant. 18) Does LAMP or its current investment advisor currently provide arbitrage rebate services to the LAMP participants? If not, will the ability to provide arbitrage rebate services be required by the investment manager going forward? Please refer to the responses of questions 3 & 4 above. 19) With respect to arbitrage rebate tracking services, does LAMP currently contract with an accounting firm and/or legal firm or does the Advisor perform the services? If the Advisor provides arbitrage reporting, is the service provided to all Participants or is this limited to Participants for which the Advisor additionally provides separate account management of bond proceeds? Please refer to the responses of questions 3, 4 & 13 above. 20) To what extent are 2a-7 rules implemented in the Fund? Are all 2a-7 rules implemented in the asset management of the Fund? What, if any, reporting requirements of 2a-7 are implemented? LAMP is not a registered 2a7 fund. Please refer to RFP Attachment #1 LA R.S. 33:2955 Investments by political subdivisions and RFP Attachment #2 LAMP s Statement of Investment Guidelines.

6 21) Section IV.B. states, The successful proposer(s) will direct the investment of a portion of the assets comprising the LAMP. What portion or how much of the assets of LAMP do you anticipate will be managed by the Advisor hired through this Request for Proposal? LAMP anticipates hiring one investment advisor to manage 100% of the pool s assets. 22) To what extent is the Advisor currently active in the marketing of the Fund? We are seeking guidance on the extent to which LAMP wishes Advisor to provide marketing services to new and prospective participants since this function is included in the Evaluation Criteria. Please see response to Question #5 23) Would all permissible investments described under RFP Attachment #1 (Investments by Political Subdivisions) be eligible for investment in the LAMP, or are we restricted to the subset of investments described in RFP Attachment #2 (LAMP Statement of Investment Guidelines)? The investment advisor would be restricted to the subset of investments described in RFP Attachment #2 the LAMP Statement of Investment Guidelines. 24) Would government money market funds managed by the sub-adviser of LAMP represent permissible investments (subject to limits described in Investment Limitations and Restrictions item B (RFP Attachment #2), and item H of Exhibit A)? 25) Exhibit A references an exclusive list of authorized investment instruments. Would these be in addition to US Treasury obligations and other permissible investments referenced earlier under LAMP Statement of Investment Guidelines.

7 26) Exhibit A states that commercial paper is limited to CP of US corporations. Item D under Investment Limitations and Restrictions (RFP Attachment #2) references a 25% industry limit for CP excluding the financial services industry. Is financial CP also eligible? If so, what limitations apply (e.g., US? Foreign? US CP subsidiaries of foreign banks? Would ABCP of domestic and foreign banks be considered to be financial CP?). U.S. financial services commercial paper is eligible, US commercial paper subsidiaries of foreign banks are eligible. Asset backed commercial paper of domestic and foreign banks is not eligible.