§ 3-15 Investment Manager Search.
RCNY § 3-15
(a)Policy. Notwithstanding any other provision of this title, the preferred method of procuring investment management services for the assets of the City's Retirement Systems shall be the Investment Manager Search as described in this section. Upon the demonstration of compelling circumstances and in accordance with this section, an alternative procurement method to procure investment manager services may be utilized with the approval of the CCPO.
(b)Content of Notice of Search. Notices of Search shall include the following: (1) the Retirement Systems participating in the search; (2) the asset class or classes for which Investment Managers are being sought; (3) the minimum requirements for eligibility; (4) the factors upon which Investment Consultant recommendations will be made after application of minimum requirements; (5) the database(s) to be reviewed for purposes of identifying candidates for further consideration and the date on which review of the database(s) may commence; (6) information regarding how to participate in the database(s); (7) a statement that the contract award will be made to the responsible Investment Manager(s) whose product is determined to be the most advantageous to the Retirement System, taking into consideration the price and such other factors or criteria that are set forth in the Notice of Search; (8) the specific criteria and relative weight of each criterion or category of criteria that will be used by the Evaluation Committee to evaluate Investment Managers; and (9) a statement of how price will be evaluated.
(c)Evaluation Process.
(1)Consultant Review. The respective Investment Consultant(s) for each participating Retirement System shall independently review information posted in the databases identified in the Notice of Search, and provide a written report that identifies the Investment Managers that meet the minimum requirements set forth in the Notice of Search. The Investment Consultants shall provide to the Evaluation Committee a report confirming databases searched and a list of Investment Managers that meet the minimum requirements.
(i)Investment Managers meeting the minimum requirements shall be further analyzed by each participating Investment Consultant based on quantitative and qualitative factors used for institutional investment management services searches. Such factors shall include, but are not limited to, investment philosophy, strategy and process; organizational stability, expertise and expertise of staff; regulatory history as well as analysis of customary and appropriate historic and comparative investment portfolio performance metrics; and such other factors consistent with industry standards for institutional investment management services and the Retirement System's investment policies and guidelines.
(ii)Following the analysis in subparagraph (i) of this paragraph, each Investment Consultant shall provide a written report describing the basis for its recommendations of qualified Investment Managers for further consideration by the evaluation committee.
(2)Evaluation Committee. An evaluation committee consisting of no fewer than three persons with knowledge, expertise, and experience sufficient to make a fair and reasonable evaluation shall be established. The ACCO shall require each member of the evaluation committee to submit a signed statement, in a format approved by the CCPO, agreeing to prohibitions on any conflicts of interest. The evaluation committee may include outside evaluators pursuant to 9 RCNY § 3-03(g)(1)(b).
(3)Shortlist of Investment Managers.
(4)Evaluation Committee Review. The evaluation committee shall then evaluate the Shortlist of Investment Managers in accordance with the evaluation criteria set forth in the Notice of Search. The evaluation committee may require Investment Managers on the Shortlist of Investment Managers to submit information and documentation consistent with the evaluation criteria in the Notice of Search. The Evaluation Committee will review the recommendations of the Investment Consultants and work with each Investment Consultant to obtain information and documentation necessary to optimize the portfolio recommendations for the respective Board of Trustees.
(iii)Discussions with Investment Managers. The evaluation committee may elect to enter into discussions with those Investment Managers as part of the evaluation process either before or after proposals are solicited and/or for the purpose of arriving at a contract that will be most advantageous to the Retirement System(s), taking into consideration price and the other evaluation factors set forth in the Notice of Search.
(iv)Conduct of Discussions. (A) Investment Managers shall be accorded fair treatment with respect to any opportunity for discussions and clarifications of information. (B) Working with the Evaluation Committee and Investment Consultants, the ACCO shall provide the Investment Manager with customized agendas and schedule for conducting discussions. (C) Auction techniques (revealing one Investment Manager's price to another) and disclosure of any information derived from competing proposals are prohibited. (D) Any oral clarification of a proposal shall be confirmed in writing by the Investment Manager.
(v)Best and Final Offers. Best and final offers are the revised and corrected final offers submitted by Investment Managers after discussions, if any, have been held. The ACCO shall establish a common date and time for the submission of best and final offers. Best and final offers shall be submitted only once unless the ACCO makes a determination that it is in the Retirement System's best interest to conduct additional discussions and/or require another submission of best and final offers. All best and final offers shall be handled in accordance with the control procedures contained in 9 RCNY § 3-03(f)(9). Best and final offers shall be evaluated in accordance with this subdivision and the Notice of Search.
(vi)Report to Board of Trustees. The Evaluation Committee, in consultation with the Investment Consultants, shall provide the Board of Trustees of the participating Retirement System(s) or its delegee with a written report summarizing the evaluation of all firms on the Shortlist of Investment Managers and at least two optimized portfolio recommendations prior to the Board of Trustees making a determination on the award of contract(s).
(5)Investment Manager Selection. Contract award(s), if any, must be made to the responsible proposer whose proposal is determined to be the most advantageous to the Retirement System(s), taking into consideration the price and such other factors or criteria that are set forth in the Notice of Search. In evaluating Investment Managers, only price, portfolio optimization and the criteria set forth in the Notice of Search may be considered. In considering price, methods such as ranking the Investment Managers on the Shortlist of Investment Managers by price, evaluating price per technical point, or evaluating Investment Managers on the Shortlist of Investment Managers in accordance with another combination of price and technical merit may be used. Such methods may result in selection of the highest technically rated Investment Manager over another technically qualified Investment Manager who offered a lower fee as a result of factors including, but not limited to, the selected Investment Managers' philosophy, strategy and process; stability and expertise of staff; regulatory history; and analysis of customary and appropriate historic and comparative investment portfolio metrics.
(6)Documentation of Award. The ACCO shall make a determination showing the basis on which the contract award was made to the responsible Investment Manager whose product was determined to be the most advantageous to the Retirement System(s), taking into consideration the price and such other factors or criteria that are set forth in the Notice of Search. This determination shall be included in a Recommendation for Award. Each Recommendation for Award shall include at a minimum the following information: (i) justification of the award; (ii) if the award is for services for which there is price history, a price comparison of the proposed price versus previous price, if applicable, with the rationale for any increases supported by cost/price analysis data; (iii) reasons for multiple awards; (iv) any special terms and conditions included in the proposed contract via the use of cost/price analysis techniques; (v) affirmative finding of responsibility for the selected Investment Manager(s); and (vi) efforts to negotiate better value. Upon determination of the most favorable product(s) and after obtaining all required approvals, the Contracting Officer shall award the contract to that Investment Manager.
(d)Public Notice.
