Consulting Contract with Percentage on Turnover by mzy13601


More Info
                          REQUEST FOR PROPOSAL
                              HEDGE FUNDS

                                        Part I


 General Information

1.   Purpose

     This request for proposal (RFP) invites proposals for consideration by the Fort
     Worth Employees' Retirement Fund (FWERF) for Consulting Services. A
     detailed description of the work appears in Part IV. This assignment requires a
     firm and individuals having extensive experience in providing these services to
     small and mid-sized public pension plans.

2.   Background Information

     The Fort Worth Employees' Retirement Fund is governed by a thirteen member
     Board of Trustees (Board), comprised of two elected active general city
     employees, one active firefighter, one active police officer, one retired general
     city employee, one retired firefighter, one retired police officer, the City’s CFO,
     and five members of the local business community appointed by City Council.
     The Board retains an Executive Director to manage day-to-day operations of
     FWERF. All permanent, full-time City employees are members of FWERF.

     The Retirement Fund has total assets in its investment portfolio of just under two
     billion dollars, with a current allocation to hedge funds of 10%.

3.   Issuing Office

     Proposals, inquiries and all other communications should be directed to:

        Ruth Ryerson, Executive Director/CIO
        Fort Worth Employees' Retirement Fund
        4100 International Plaza, Suite 730
        Fort Worth, TX 76109

        The Executive Director is the sole point of contact for the RFP.

                                                                             Page 1 of 11
4.   Response Date

     To be considered, proposals must arrive at the Retirement Office on or before
     the close of business, Friday, February 1, 2008. Proposers mailing proposals
     should allow appropriate mail delivery time to ensure timely receipt of their

5.   Type of Contract

     The contract period is three (3) years commencing April 1, 2008 and expiring
     March 31, 2011. The contract will be for a fixed price. FWERF may extend the
     contract during the third year for an additional year, utilizing the existing contract
     with the Consultant.

6.   Selection Process

     The criteria for selection appear in Part III. The Executive Director/CIO, with
     assistance from staff and/or a committee of the Board, will review proposals
     received and select those deemed most advantageous for an oral presentation.

     As part of the review of proposals, additional information may be requested in
     order to clarify or get a better understanding of a proposal and other clients of the
     proposers may be contacted for reference purposes.

7.   Presentation

     Presentations by selected Consultants will be scheduled to provide an
     opportunity for the Board and Executive staff to meet the Consultant's personnel
     and for the Consultant to clarify the proposal in order to ensure thorough mutual
     understanding. It is anticipated that those presentations will take place at the
     Board’s February 27, 2008 meeting, although the Board reserves the right to
     schedule presentations the following month, at its March 26, 2008 meeting.

8.   Rejection of Proposals

     FWERF reserves the right to reject any and all proposals received.

9.   Incurring Costs

     FWERF will not pay proposers any cost incurred by proposers in making their
     proposals or presentations or for any information learned in the course of the
     selection process.

                                                                               Page 2 of 11
10. Inquiries

    Questions regarding this RFP must be submitted in writing to the Executive
    Director via email. The address is shown in item 3 above. It is expected that
    proposers will base their proposals on the information contained in this RFP, and
    the Executive Director has discretion to respond or not to respond to inquiries.

11. Addenda to the RFP

    FWERF may amend or revise the RFP at any time. If FWERF revises any part of
    the RFP, the revisions will be included in a revised document that will be e-
    mailed to all proposers.

12. Proposals

    To be considered, proposers must submit a complete response to this RFP using
    the format provided in Part II. Each proposal must be submitted with five (5)
    copies to the address provided in Part I (3).

    The proposer will make no other distribution of the proposals. Proposals must
    be signed by an official authorized to bind the proposers to its provisions. For
    this RFP, the proposal must remain valid for at least ninety (90) days. Emphasis
    should be placed on completeness and clarity of the proposal.

13. Acceptance of Proposal Content

    The contents of the proposal of the successful proposer may become contractual
    obligations. Failure of the successful proposer to accept these obligations may
    result in cancellation of the award.

14. Prime Contractor Responsibilities

    The proposer (contractor) will be responsible for providing all services in the
    contract, whether or not it performs the services directly itself, or retains
    subcontractors. The contractor shall be the sole point of contact and shall pay
    any and all charges incurred in performing the services in the contract.

15. Contract Payment Schedule

    Payment under any contract entered into as a result of this RFP will be made on
    the basis of completed work elements and upon receipt of the contractor's billing
    statement unless otherwise agreed to by the Board.

                                                                          Page 3 of 11
16. News Releases

    News releases pertaining to this RFP or the service, study or project to which it
    relates will not be made without prior FWERF approval and then only in
    coordination with the Executive Director.

17. Disclosure of Proposal Contents

    Proposals submitted become the property of the Retirement Fund and are
    subject to disclosure under Texas Open Records laws. A proposer may discuss
    proprietary information during an oral presentation, but must indicate that the
    material is confidential during the meeting.

18. Indemnification

    The Consultant shall indemnify, save harmless and defend the Retirement Fund
    from all claims, demands, suits, judgments, and liability (including attorney’s fees,
    losses, cost and expenses of any kind) arising out of, in connection with, or
    incident to any act, error, or omission of the Consultant, or any of its agents or
    employees under this Agreement. The indemnification and defense obligation
    provided for in this section shall survive any termination or expiration of this

                                                                             Page 4 of 11
                                        Part II

                       Information Required From Proposers

Proposals must be submitted in the format outlined below:

All proposals must be structured to respond to the following questions. All answers must
be complete and specific in detail. The Proposer must submit five printed copies of the

 1.   Organization

      A. State the full name and address of your organization and, if applicable, the
         branch office of other subordinate elements that will perform or assist in
         performing the work. Indicate whether you operate as an individual,
         partnership, or corporation.
      B. Provide a general description of the firm, including size, number of
         employees, primary business (consulting, pension planning, insurance, etc.),
         other business or services, and other descriptive material. Please include
         when the firm was founded and by whom; current ownership and affiliations;
         names and titles of key officials.
      C. Are any changes in the ownership of your firm planned or anticipated during
         the next 24 months?
      D. How many years has your firm provided pension fund consulting service to
         public pension plans?
      E. Please discuss in detail what you consider to be your firm’s consulting
         specialties, strengths and limitations.
      F. What services, if any, does your firm offer in addition to pension fund
         consulting? What percentage of organization revenues are the result of
         consulting services?
      G. Does your firm act as a fiduciary when serving as a pension fund consultant?
         Please define what you consider a fiduciary with regard to a pension fund

      H. Is your firm a registered investment advisor under the Investment Advisors
         Act of 1940?
      I. Describe the services provided by your organization and the attributes of your
         pension investment consulting philosophy that distinguish your firm from your
      J. Does your firm or any affiliate provide brokerage or funds management? If
         yes, how does your firm protect against conflicts of interest?

                                                                             Page 5 of 11
     K. Has your firm or any other member of the consulting staff ever lost or settled
        a civil suit, or been involved in an SEC investigation, related to activities as a
        consultant? If yes, describe.
     L. Identify the total number of investment consulting clients your firm services,
        by assets, as follows:

                                                Total Clients             Public Clients
         •   Less than $100 million
         •   $100 million to $1 billion
         •   $1 billion and over

     M. What was the client turnover (gains and losses) of your firm over the last
        three years?

                                      2007                  2006                 2005
        Clients Gained
        Clients Lost

     N. List public employee retirement systems and private pension systems for
        which your firm currently provides consulting services, including system
        name, approximate number of participants and number of years your firm has
        been retained. Provide references and the address, telephone number, name
        and title of person (s) responsible for the administration of three of your
        referenced public employee retirement system clients.

2.   Staff Profile

     A. Provide the name(s) and location of the individual(s) who will be responsible
        for the FWERF account. Also, provide a brief biography including titles,
        functions, academic credentials, professional affiliations, relevant work
        experience and number of years with your firm.

     B. How many client accounts are assigned to each of the person(s) named
        above? What is the range in asset values of these client accounts? Is there a
        limit to the number of accounts that your firm will assign to any one

     C. Describe turnover of key professional personnel within your organization
        during the past three years and provide a brief explanation.

     D. Identify at least five references for the individual who would be responsible for
        our engagement. Show the asset size, years with your firm, and services
        provided. Include names of entity, address, telephone number, and contact.

                                                                              Page 6 of 11
3.   Consulting Services – Hedge Funds

     A. Please provide a detailed description of your firm’s expertise that would be
        appropriate for this RFP.

     B. Please provide a detailed description of the process that is undertaken to
        evaluate a potential hedge fund-of-funds investment opportunity.

     C. Please provide a detailed description on your hedge fund-of-funds monitoring
        and performance evaluation capabilities, including your process for replacing
        a manager when necessary.

4.   Cost and Price Analysis

     FWERF is willing to consider either a retainer relationship or an intermittent
     project relationship.

     A. Proposed price for analysis of our current hedge fund investments and a
        comparison with other sophisticated public pension plans.

     B. Proposed price for the evaluation and due diligence of potential new
        investments (new or additional fund-of-funds investments).

     C. Proposed price for the on-going monitoring and performance evaluation of our
        hedge fund portfolio.

     D. Indicate your charges for additional services, if any, not included within the
        scope of the routine services outlined in these specifications.

     E. Additional services will be contracted on a prior approval basis only by

5.   Authorized Negotiations

     Include the names and phone numbers and email addresses of personnel of your
     organization authorized to negotiate the proposed contract with FWERF. Please
     include a copy of your standard consulting contract, if one exists, with your
     proposal. We are not able to indemnify your firm, nor are we interested in
     exculpating for negligence.

6.   Additional Information and Comments

     Include any other information that is believed to be pertinent but not specifically
     asked for elsewhere.

                                                                             Page 7 of 11
Also, in anticipation of an additional consultant search to take place later in the
year, please provide information on your private equity / alternative investment
consulting capabilities as indicated below. This information only needs to be
provided if you feel this is a strength of your firm and that you would be able to
adequately service the Fund’s needs in this area. The Fund currently has a 7.5%
target for its private equity portfolio, but less than 2% actually invested. The
portfolio consists of two venture capital fund-of-funds and two custom private
equity fund-of-funds. The desired structure in the future would be for FWERF to
invest directly in private equity partnerships without the additional layer of fees
inherent in the fund-of-funds structure.

A. Please provide a detailed description of your firm’s expertise that would be
   appropriate for this area (private equity, venture capital and mezzanine debt).

B. Please provide a detailed description of the process that is undertaken to
   evaluate a potential investment opportunity, including: commingled funds or
   limited partnerships.

C. Does your firm also have the resources to assist in the evaluation of a direct
   investment opportunity? If so, please describe the available resources and
   expertise. (At this time, we expect that we will continue to limit our investment
   opportunities to that of commingled funds or limited partnerships. We do not
   expect do any direct transactions unless we run across a compelling local

                                                                        Page 8 of 11
                                        Part III

                                Criteria for Selection

All proposals received shall be subject to an evaluation by the Retirement Office as
deemed appropriate for the purpose of selecting the Consultant with whom a contract
will be signed. The following factors will be considered in making the selection:

 1.   Price (20%)

 2.   Capability and Qualification (25%)

      This criteria includes the ability of the Consultant to meet the terms of the RFP,
      including the time constraints, and the quality, relevance, and recency of similar
      engagements. Emphasis will also be placed on the soundness of the
      Consultant's approach to the stated needs.

 3.   Professional Personnel (30%)

      This refers to the competence of the professional personnel who would be
      assigned to the job by the Consultant. Qualifications of professional personnel
      will be measured on education, experience and projects similar to those
      described in this RFP.

 4.   Analyses and Reports (25%)

      This refers to oral and written advice. Since oral advice will occur during
      consultations by phone, at meetings and at formal presentations, stress is placed
      upon being clear, cogent, and correct, including the ability to explain investment
      concepts to lay people. Emphasis with written reports will be upon providing
      accurate useful information in a concise and easily understood manner.

 5.   Equal Employment Opportunity and MWBE Utilization

      Non-discrimination in employment will be evaluated on a pass/fail basis, and
      MWBE utilization will be considered a positive factor.

                                                                             Page 9 of 11
                                      Part IV

                                 Work Statement

1.   General Responsibilities of Proposer:
     A. FWERF will furnish the successful proposer (Consultant) with such data or
        statistical information as may be determined to be necessary for the
        performance of the work described herein and which is available in the
        records and files of FWERF, the custodian bank, and FWERF investment
     B. Unless and until published, the Consultant will be expected to treat all
        information as confidential.
     C. The professional consulting services for FWERF shall be performed by, or
        under the direct supervision of a senior member of the Consulting firm.
        FWERF reserves the right to reject the choice of primary consultant and may
        terminate the contract if a person acceptable to FWERF cannot be made
        available by the Consulting firm.
        The Consultant shall provide a means by which any change in its staff may be
        effected with a minimum of disruption of the services provided to FWERF.
     D. The Consultant shall channel all requests, reports and all other
        communication in connection with this contract through the FWERF Executive
        Director or a designee.

2.   Tasks

     We presently allocate 10% of the Total Fund to hedge funds, with the entire
     allocation currently invested in one hedge fund-of-funds managed by our general
     consultant.     A recent review by an independent investment consultant
     recommended that the Board hire another consultant to oversee the hedge fund
     program, to include performance evaluation, monitoring, and recommending
     hedge fund-of-funds for our portfolio.

     We are interested in an analysis of our current portfolio and how it compares to
     hedge fund portfolios of other sophisticated public pension systems as well as
     those held by some of the sophisticated foundations.

     We are seeking a resource to assist with the evaluation of our existing portfolio
     and due diligence on potential new investments.

                                                                          Page 10 of 11
3.   Administrative Controls

     The Consultant will carry out this assignment under the direction and control of
     the Executive Director/CIO of the Retirement Fund.
     The Executive Director will meet with the Consultant's authorized representative
     as necessary, for the purpose of reviewing the needs of the Fund or the products
     of the Consultant. At the discretion of the Executive Director, the Consultant
     shall conduct and pay the costs of attending up to four meetings per year, at the
     Retirement Fund’s Offices. If the consulting arrangement were that of a project
     basis, as opposed to an ongoing retainer situation, the meeting frequency will be
     determined during the project.

                                                                          Page 11 of 11

To top