Entire RFP document

BOARD OF

ADMINISTRATION ___

THOMAS J. MIZOPRESIDENT

SHELLEY SMITHVICE PRESIDENT

___

KELLY CANDAELEERIC L. HOLOMANADOLFO V. NODAL

RICK ROGERSKEN SPIKER

CITY OF LOS ANGELESCALIFORNIA

ANTONIO R. VILLARAIGOSAMAYOR

LOS ANGELES CITY EMPLOYEES’

RETIREMENT SYSTEM

360 EAST SECOND STREET

2ND FLOORLOS ANGELES, CA 90012-4207

___ROBERT AGUALLO, JR.

GENERAL MANAGER(213) 473-7280

DANIEL P. GALLAGHERCHIEF INVESTMENT OFFICER

(213) 473-7124

___

TTY (888) 349-3996

January 24, 2006

Subject: REQUEST FOR PROPOSAL FOR GENERAL PENSION FUND CONSULTANT

Dear Proposer:

The Los Angeles City Employees' Retirement System (LACERS), a $9.3 Billion fund, is seeking through a competitive bid process, general investment portfolio consultation services regarding various domestic and international, equity and fixed income, separate account and total fund issues. Services will include domestic and international performance measurement, attribution analysis, formulation and modification of Plan investment policy, and strategic asset allocation advice. Additionally, services may include searches for and selection of domestic and international equity and fixed income managers; currency overlay or other asset class managers; performing asset-liability analysis and other consulting tasks. Respondents must have experience providing the aforementioned consulting services to institutional clients with portfolios of more than $5 billion on a full retainer basis.

LACERS' portfolio is currently valued at approximately $9.3 billion. The portfolio consists of: one (1) passively-managed domestic bond account; three (3) actively-managed domestic bond accounts; one (1) commercial mortgage commingled fund; two (2) passively-managed domestic equity accounts; eight (8) actively-managed domestic equity accounts; two (2) fund-of-funds managers one (1) passively-managed EAFE index account; five (5) active non-U.S. equity accounts; one (1) internally-managed cash account; thirty-five (35) closed-end commingled real estate fund accounts; seventy-one (71) closed-end commingled alternative investment fund accounts. four (4) corporate governance investment managers (one US and three non-US)

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In addition, LACERS uses an independent real estate consultant, an independent alternative investments consultant (core portfolio), and a specialized non-traditional alternative investment consultant for the private equity carve-out portfolio.

The selected consultant must be available for presentations to, and consultation with, the Board and staff on various investment-related issues. The Board may elect to hire multiple consultants if it determines that the best relationships can be established in this manner without significantly increasing the cost to the Fund.

Consideration will be given to proposals from emerging firms to ensure that women and minorities have an opportunity to participate.

The RFP and other required documents may be downloaded from LACERS’ website www.lacers.org. A list of required documents can be found in attached instructions Section IV “Proposal Requirements” of the RFP. Proposals must be received by LACERS by 3:00 PM PST, Thursday, February 23, 2006. FACSIMILE COPIES WILL NOT BE ACCEPTED NOR ANY OTHER TRANSMISSION OF THE RFP RESPONSES NOT AUTHORIZED BY THIS RFP.

Finalist candidates may be requested to submit additional copies of their proposal. Any questions should be directed to Rod June or Barbara Sandoval at (213) 473-7124 or emailed to [email protected]

Sincerely,

Robert Aguallo, Jr., General ManagerLos Angeles City Employees' Retirement System

RA:DPG:RJ/BS

Enclosures

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I. MINIMUM QUALIFICATIONS

The following is a list of the minimum qualifications that the General Pension Fund Consultant must meet or exceed to be considered for appointment.

A. The proposer must have at least one institutional, full retainer general consulting client with a portfolio valued at not less than $5 billion.

B. The consultant assigned to the LACERS relationship should have a minimum of three (3) years full-retainer institutional investment general consulting experience and not less than three (3) years with the firm.

C. The proposer must be directly responsible for the management of the account, and all personnel responsible for the account must be employees of the firm.

D. The consultant must not have, nor potentially have, a material conflict of interest to include, but not limited to, the LACERS’ Board, staff, actuary, auditor, investment manager(s) or other consultant(s).

E. The consultant must carry Errors and Omissions coverage or must have applied for it by the submission date of the RFP.

F. All Minimum Qualifications must be met by February 23, 2006.

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REQUEST FOR PROPOSAL

GENERAL PENSION FUND CONSULTANT

LOS ANGELES CITY EMPLOYEES’ RETIREMENT SYSTEM

MINIMUM QUALIFICATIONS WARRANTY

By signing below, an authorized representative of the proposer warrants that the proposer has met all of the MINIMUM QUALIFICATIONS by February 23, 2006.

____________________________ ______________________________Authorized Signature (Print Name)

_____________________________ ______________________________Title Date

__________________________________Company

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II. RFP SEARCH PROCESS

SEQUENCE OF EVENTS AND PROPOSED TARGET DATES

Action Proposed Target Dates

Proposer submission of RFP proposal

02/23/2006

Interviews 5/19/2006

New contract takes effect 7/01/2006

III. GENERAL REQUIREMENTS

All proposals must comply with the requirements and specifications of this RFP.

A. Conditions - If LACERS is unable to agree to contract terms with the proposer receiving the highest evaluation in this RFP process or if the proposer has not fulfilled all conditions of the RFP at the time of contract execution, LACERS reserves the right to terminate contract negotiations with that proposer without undertaking another RFP process, therefore enabling the Board to negotiate with the proposer receiving the next highest evaluation.

B. Negotiations - LACERS reserves the right to negotiate a change in proposer representatives if the assigned representatives are not meeting LACERS’ needs adequately.

C. Termination – This RFP in no manner obligates LACERS to the eventual procurement of services until confirmed by a written contract. Progress toward this end is solely at the discretion of LACERS and may terminate at any time prior to the signing of a contract.

D. Withdrawal of RFP - LACERS reserves the right to cancel this RFP at any time, and to reject any and all proposals submitted in response to this RFP if LACERS determines such action or actions are in its best interest.

E. Proposal Applicability – To allow sufficient time for contract negotiation, all prices and conditions stated in the proposal must be firm for a period of 180 days from the deadline for submission of proposals.

F Legal Review – LACERS expects that all proposers will agree to be bound by the terms and conditions articulated in this RFP. For this reason, it is strongly recommended that proposers have the terms and conditions contained herein

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reviewed with corporate counsel and that proposer concerns be brought to LACERS’ attention.

G. Governing Law – This procurement and any agreement with proposers that may result shall be governed by the laws of the City of Los Angeles and the State of California. Submission of a proposal constitutes acceptance of this condition.

H. Basis for Proposal – Preparation of proposals should be responsive-specific only to questions asked in the RFP and consistent with the instructions provided in the RFP.

I. Proposal Preparation Cost – Any cost incurred by the proposer in the preparation, transmittal or presentation of any proposal or material submitted in response to this RFP will be borne solely by the proposer.

J. Proposer Qualification – LACERS may make such investigations as necessary to determine the ability of the proposer to adhere to the items as identified within the questionnaire portion of this RFP. LACERS reserves the right to reject the proposal of any proposer who, in LACERS’ opinion, is not a responsible proposer as defined below:

“Responsible proposer” means a proposer who submits a responsive proposal and who has furnished, when required, information and data to prove that his financial resources, production and service facilities, personnel, service reputation and experience are adequate to make satisfactory delivery of the services or products described in the proposal.

IV. PROPOSAL REQUIREMENTSA. Documents - The following required documents may be downloaded from

LACERS’ website at www.lacers.org:1) Request for Proposal - MS Word2) Request for Proposal - MS Excel3) Affirmative Action Questionnaire - PDF Format4) Vendor Childcare Questionnaire - PDF Format5) Child Support Statement - PDF Format6) Americans With Disabilities Certification PDF Format

B. Hard Copy Binder - Fifteen (15) hard copies of the proposal shall be submitted, each in a 3-ring binder, indexed with each section separated by properly labeled tab dividers. The name of the firm shall be placed on the front cover with “General Pension Fund Consultant RFP” and the date of “February 23, 2006”; and the name of the firm shall appear on the spine of each copy of the RFP binder. One copy shall be labeled “ORIGINAL” on the front cover and spine, and shall contain all original signatures; and the original completed supplemental documents listed in Section IV.A. 3 - 6 to be placed in the very last section of the 3-ring binder as Exhibit A. Completeness, clarity and brevity are stressed in the RFP proposal binders.

C. RFP General Outline Format - The proposers response to this proposal must be

organized, indexed, and tabbed in three ring binders in the following format:

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1. Letter of Transmittal & Cover Page titled “RFP for General Pension Fund Consultant”

2. Company Questionnaire3. Warranties 4. Fee Proposal5. RFP Response Questionnaire6. Exhibits (including the supplemental documents specified in Section IV.A.3

- 6 as the Exhibit A)

D. Company Questionnaire - You must provide company and contact information on your firm on the provided form in this RFP, including. 1. Identify the RFP as “RFP for General Pension Fund Consultant”;2. Identify the submitting organization using its legal business name;3. Identify the name and title of the person authorized by the organization to

contractually obligate the organization and be signed by that person;4. Identify the names, titles, telephone numbers and email addresses of persons

to be contacted for clarification.5. Your organization’s website address.

E. Format of Answers - Within each section of the proposal, the proposer should address the items in the RFP in the order in which they appear in the RFP. Further, each question number and question in the RFP shall be repeated in its entirety before the answer.

Answers to the RFP in the Word document should be in standard 12 point Times New Roman font (or its equivalent), non-bolded and non-italicized. All questions requesting asset values must be stated in US Dollars only.

F. Other Materials - Proposers may attach other materials that supplement their responses of the RFP if they feel it may improve the quality of their responses. However, these should be included as items in Exhibit G.

G. Exhibits - The following Exhibits shall constitute the final section of the RFP response binder:A – Required City Forms (4)B – Organizational Chart of Parent/Subsidiary RelationshipsC – Organizational Chart of proposer’s organization (indicating key personnel

names and titles)D – Proof of Insurance Coverage/Form ADVE – Standard Report SamplesF – Other Report samplesG– Other Materials

H. Word and Excel Electronic Versions - In addition to the hard copy and the hard copy responses of the proposal, please provide the proposal and the responses in

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Microsoft Word and in Microsoft Excel saved on a CD ROM. The Excel spreadsheet containing questions and answers to the RFP must be submitted in the format specified in the download Excel RFP Questionnaire and saved with a file name using the prescribed file name format found in the spreadsheet. We strongly advise against cut and paste answers from the Word Document directly to the Excel document as it may change the integrity of the formatted Excel cells, and may therefore be returned to you for correction. Note that there may exist maximum word limitations in the Excel spreadsheet that are not necessarily found in the Word document. In such cases we would expect respondents to summarize the answers while maintaining the same meaning and consistency with the Word document responses, where applicable. The CD ROM containing the file of the Word document and the file of the Excel spreadsheet should be labeled with the firm name and “RFP General Pension Fund Consultant” directly on the CD ROM and placed in a sealed envelope with the firm’s name written across the front and attached or affixed inside the front cover of the original signature binder only. Please carefully follow the instructions listed at the top of the formatted Excel spreadsheet.

I. Completion of Answers - All forms, the RFP Questionnaire, and the electronic versions in Word and Excel provided in this RFP must be completely filled out. If a question does not apply to you, please write in “not applicable” and then state the reason why the question does not apply to your firm.

J. Required Supplemental Forms - Please download from the LACERS web page, complete, and submit with your hard copy proposal the LACERS Affirmative Action, Vendor Child Care, Child Support questionnaires, and American Disabilities statement. Proposals not including these completed forms/documents will be considered non-responsive, and cannot be considered for contract. Provide all original four completed forms/documents as Exhibit A in the proposal copy marked “Original” and place photocopies of these completed forms in the remaining RFP response binders as Exhibit A.

K. Authorization to Bind Organization - Proposals must be signed by an individual with the authority to bind the Proposer organization and the authority of the individual signing must be stated thereon (see “Minimum Qualifications Certification” form).

L. Additional Copies of RFP - Additional copies of the proposal may be requested from firms selected for personal interview. These copies must be exact duplicates of the response submitted for evaluation.

M. Multiple Products or Services - Each product or service that you submit for consideration must be submitted as a complete and separate proposal.

N. RFP Responses Format - All information requested in this RFP must be submitted in the format as specified in this RFP. Responses not meeting format requirements

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or that are incomplete in any way will be rejected. Proposers are urged to be concise and accurate in the preparation of responses and to carefully proofread the final copies. Each proposal that is submitted must include written acknowledgment in the front cover of the inside of the each 3-ring binder receipt of any and all amendments (if applicable) made to this RFP.

O. Confidentiality of Reponses - The word CONFIDENTIAL should be stamped and must be clearly designated on every page in the proposal containing proprietary or trade secret information. Proposers should be aware that LACERS is subject to the Public Records Act, but will endeavor to keep these materials private.

P. City Seal - Do not use, copy, or replicate in any form, the City of Los Angeles seal as this emblem is for City of Los Angeles use only and may be considered a violation of the policies stated in the governing Charter of the City of Los Angeles.

Q. Submitting the RFP Binders and CD ROM - The hard copy proposals found in the 3-ring binders along with the CD ROM (containing the Word document and Excel Spreadsheet) shall be sealed in packaging suitable for safe delivery which shall be clearly marked on the lower left hand corner of the front of the packaging for identification purposes:

NAME OF FIRMGENERAL PENSION FUND CONSULTANT RFP

With the package addressed to:DANIEL P. GALLAGHER, CHIEF INVESTMENT OFFICERLOS ANGELES CITY EMPLOYEES’ RETIREMENT SYSTEM360 EAST SECOND STREET, 2nd FLOORLOS ANGELES, CA 90012-4207

R. Submitting the Soft Copy RFP Responses in Excel - In addition to the CD ROM (containing the completed Word document and the Excel spreadsheet), the Excel spreadsheet must also be e-mailed back to LACERS at [email protected] not later than February 23, 2006, 3:00 PM, Pacific Standard Time.

S. Deadline - All 15 completed and fully signed copies of the final proposals must be received at LACERS’ office by 3:00 PM Pacific Standard Time on February 23, 2006. Date and time will be recorded on the proposals upon their arrival. No exceptions to this deadline will be granted. Excel spreadsheet must be transmitted to [email protected] by 3:00 PM Pacific Standard Time on February 23, 2006.

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LOS ANGELES CITY EMPLOYEES’ RETIREMENT SYSTEM

GENERAL PENSION FUND CONSULTANT REQUEST FOR PROPOSAL

COMPANY QUESTIONNAIRE

General Pension Fund ConsultantProduct Name

Organization’s Legal Name

Headquarters Address Website Address

Address Of Office Managing The Account (If Different)

RFP Contact Name

Telephone Number Fax Number Internet E-Mail Address

RFP Back-up Contact Name

Telephone Number Fax Number Internet E-Mail Address

Signed (authorized to contractually bind the Organization) Date

_______________________________________________________________________________Name and Title of Authorized Signer (please print)

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REQUEST FOR PROPOSAL

LOS ANGELES CITY EMPLOYEES’ RETIREMENT SYSTEM

GENERAL PENSION FUND CONSULTANT

WARRANTIES

Proposer agrees to the incorporation of the following warranties in a proposed contract:

Proposer warrants that it maintains or will obtain at its expense prior to funding an errors and omissions insurance policy providing a prudent amount of coverage for negligent acts or omissions and that such coverage is applicable to Manager’s actions under the Contract.

Proposer warrants that all information and statements in this RFP are complete and true. Any statement or claim found to be incomplete, misleading, or false will be grounds for immediate disqualification or dismissal and may be subject to legal action.

___________________________________ ______________________________Authorized Signature (Please Print Name)

Title:_______________________________ Date:__________________________

Company:___________________________

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REQUEST FOR PROPOSAL

LOS ANGELES CITY EMPLOYEES’ RETIREMENT SYSTEM

GENERAL PENSION FUND CONSULTANT

FEE PROPOSAL

Firm Name:____________________________________________

Your lowest fees in US Dollars annually for managing the relationship on a full retainer basis as described in this General Pension Fund Consultant RFP:

Are the fees presented above negotiable?

Once a consultant (or consultants) has been selected, negotiations of the fee may become necessary in order to account for the size of potential funding, the increments of the funding and any clarification. In no case will the negotiations result in a fee that is higher than the fee contained in the proposal.

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Los Angeles City Employees’ Retirement SystemGeneral Pension Fund Consultant Questionnaire

Section A: Statement Of Intent and Background Information

1. Statement of Intent. The Los Angeles City Employees’ Retirement System, hereinafter referred to as LACERS, is seeking proposals for a General Pension Fund Consultant.

2. Background. LACERS has total plan assets of approximately $9.3 billion.

3. General Pension Fund Consultant will be assisting LACERS in the review and update of objectives, benchmarks, and performance evaluations, and other tasks as may be required.

4. LACERS has historically used a single General Pension Fund Consultant compensated on a full retainer basis to provide the following services:

Quarterly performance analysis Attendance at Board/Committee meetings as needed Manager searches, and recommendations for hirings/terminations On-going monitoring of managers Assistance in the development of investment policy, practices and philosophy Asset allocation Asset/Liability studies Research on other investment issues as needed Trustee/staff education

When reference is made in this RFP to hiring an investment consultant on a full retainer basis to provide the “full range” of investment consulting services, it is assumed that the consultant may provide each of the services listed above.

5. Other LACERS relationships include:Custodian: The Northern Trust CompanyReal estate consultant: The Townsend GroupAlternative Investments Consultant: Hamilton LaneSpecialized Alternative Investment Consultant:

Pension Consulting Alliance Auditor: Brown Armstrong, CPAActuary: The Segal Company

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SECTION B: QUESTIONNAIRE INSTRUCTIONS

1. Contact Concerning Questionnaire. The primary contacts for this Questionnaire are:

Rod June and Barbara Sandoval (213) 473-7124

LACERS

360 East Second Street, 8th Floor

Los Angeles, CA 90012

Fax: (213) 687-8412E-mail: [email protected]

2. Letter of Intent. Potential responders (“Proposers”) should submit a letter of intent on the firm’s letterhead to respond to the General Pension Fund Consultant Questionnaire to LACERS no later than January 31, 2006. Letters of intent may be sent by mail, hand delivery, fax or email and addressed to the attention of Daniel P. Gallagher, Chief Investment Officer. A letter of intent is not a prerequisite for submission of a response to the Questionnaire, nor does it obligate a firm to submit a response to the Questionnaire. However, addenda and amendments to the Questionnaire and written responses to any questions submitted in accordance with the terms of this Questionnaire can only be assured to be sent to those firms who submit a letter of intent. The letter of intent should indicate the name, title, mailing address, telephone and fax numbers, and e-mail address of the person within the firm’s organization to whom correspondence should be sent.

3. Questions. Should a firm find discrepancies in or omissions from the questions or specifications, or should there be doubt as to their meaning, the firm may direct written questions to LACERS as identified above. All written questions must also identify the questionnaire section, question number and page number for each question submitted. Written questions may be sent by mail, e-mail, or fax. LACERS shall only be bound by written responses to questions concerning this Questionnaire.

LACERS should receive questions no later than February 8, 2006. Questions received by the February 8, 2006 due date will be responded to no later than February 15, 2006.

4. Amendments to Questionnaire. LACERS reserves the right to amend the Questionnaire at any time but no later than five (5) working days prior to the Questionnaire due date.

Amendments will be sent to all Proposers who have filed a letter of intent. Firms shall respond to the Questionnaire and any exhibits, attachments, amendments or written responses to submitted questions. If significant amendments occur, LACERS may extend the Questionnaire due date.

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5. Assignment and Subcontracting. LACERS requires General Pension Fund Consultant services described herein to be performed by the Proposer; however, subcontracting of these services may be allowed if in the best interests of LACERS and only if fully disclosed in the RFP in question #14.

6. Form of Questionnaire Response. Responses must be submitted in the order that the items appear in the Questionnaire. Responses must restate the question from the Questionnaire before stating the Proposer's response to the question. The use of 12 point Times New Roman font (or its equivalent) is recommended.

Responses should be prepared simply and concisely. Emphasis should be placed on clarity of content and responsiveness to the questions.

Each proposal submitted must include written acknowledgment of the receipt of any and all amendments made to this RFP.

If a Proposer is unable to provide any information requested in the Questionnaire for evaluation, the firm is to provide an explanation as to why it cannot provide such information. Any exception may result in disqualification for consideration.

Responses received that do not meet the Questionnaire Instructions may be considered to be non-responsive and not given further consideration.

All costs incurred by the Proposers in responding to the Questionnaire shall be borne by the firm. Materials submitted with the response to the Questionnaire will not be returned.

7. Letter of Transmittal. A transmittal letter must accompany all responses to this Questionnaire and placed as the first page of the RFP. The transmittal letter must further state that the response to the Questionnaire is valid for six (6) months subsequent to the proposal due date.

The letter of transmittal MUST:a. identify the RFP as “General Pension Fund Consultant”b. identify the submitting organization;c. identify the name and title of the person authorized by the organization

to contractually obligate the organization;d. identify the names, titles, telephone and fax numbers, and e-mail

addresses of persons to be contacted for clarification; e. certify that your firm has fully complied with all provisions of the RFP

and that all statements are true and accurate, and that the firm has not knowingly made any false or misleading statements in its proposal

f. be signed by a person authorized to contractually obligate the organization.

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8. Proposal Format. The Proposer’s response to this proposal must be sequentially page numbered, organized and indexed in the following format:

1. Letter of Transmittal & Cover Page titled:

“RFP for General Pension Fund Consultant”

2. Company Questionnaire

3. Warranties

4. Fee Proposal

5. RFP Response Questionnaire

6. Exhibits A - G (including the supplemental documents specified in Section IV.A.3 - 6 as the Exhibit A)

9. Proposers may attach other material that is directly related to a question asked in RFP if they feel it may improve the quality of their responses. However, any such items should be included as items in Exhibit G and should not contain promotional materials.

10. All proposals must be printed on standard 8 1/2 x 11 paper indexed and placed within a standard three binder. Your firm’s name should appear prominently on the front cover of the binder along with “General Pension Fund Consultant RFP”; and the firm’s name must be clearly visible on the spine of the binder. Supporting Forms provided in this RFP to the Proposer must be completely filled out. Completeness, clarity and brevity are stressed.

11. Please note that the Excel spreadsheet contains questions that have maximum word limitations that may require you to condense your answers as provided in the Word document.

ALL INFORMATION REQUESTED IN THIS RFP MUST BE SUBMITTED IN THE FORMAT SPECIFIED IN THIS RFP. RESPONSES NOT MEETING FORMAT REQUIREMENTS OR THAT ARE INCOMPLETE IN ANY WAY MAY BE REJECTED. CANDIDATES ARE URGED TO TAKE CARE IN THE PREPARATION OF RESPONSES AND TO CAREFULLY PROOFREAD THE FINAL COPIES.

12. Submission of Response. Proposers shall deliver fifteen (15) copies of its response, in the form and detail specified in this Questionnaire, to:

Daniel P. Gallagher, Chief Investment OfficerLos Angeles City Employees’ Retirement System360 East Second Street, 2nd FloorLos Angeles, CA 90012

Phone: (213) 473-712415

Fax: (213) 687-8412E-mail: [email protected]

Faxed or e-mailed proposals will NOT be accepted nor will hard copy proposals that are printouts of the Excel spreadsheet responses. In addition to providing hard copies in the prescribed format, each Proposer must also supply a copy of its proposal on a CD Rom in Microsoft Word and Microsoft Excel, saved with prescribed file names, and formatted for viewing on a Windows 2003 operating environment.

Responses must be submitted and received at the above listed address no later than February 23, 2006 at 3:00 p.m. Pacific Standard Time. It is the Proposer’s sole responsibility to ensure that the response is submitted on or before the time due. Responses received after the time and date they are due will be deemed non-responsive.

13. Upon the completion of the review and evaluation of all responses submitted, all responses will become public documents of LACERS. Proprietary information contained in the proposal should be clearly and boldly identified, stamped “CONFIDENTIAL” on each page of the RFP document; and the entire page will be deemed as such. It is understood that LACERS, a public agency subject to the Public Records Act, will use its best efforts to maintain the confidentiality of the information labeled “CONFIDENTIAL”. However, in the event the confidential material is disclosed for any reason whatsoever, LACERS shall not be liable or responsible to applicant or any third party for alleged damages. All responses, inquiries or correspondence submitted in reference to this Questionnaire and any other documentation provided by any Proposer will become the property of LACERS whether or not a contract is subsequently consummated.

14. Clarification or Rejection of Proposals. LACERS reserves the right to request clarification or corrections to responses, to reject any and all responses, or to cancel or modify the Questionnaire in part or its entirety at LACERS sole discretion. LACERS reserves the right, at its sole discretion, to waive variances in responses to the Questionnaire provided such action is in the best interests of LACERS. Where LACERS waives variances in responses, such waiver does not modify the Questionnaire requirements or excuse the Proposer (or any other Proposer) from full compliance with the Questionnaire. Notwithstanding any variance, LACERS may hold any Proposer to strict compliance with the Questionnaire.

15. Proposed Schedule of Events for Questionnaire Evaluation

a. RFP Questionnaire Issued January 24, 2006

b. Letters of intent due not later than January 31, 2006

c. Written Questions from Proposers not later than February 8, 2006

d. Responses to Proposers’ Questions not later than February 15, 2006

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e. Questionnaire Due Dates February 23, 2006, 4:00 pm PST

f. Interviews of finalists May 19, 2006

g. New contract takes effect July 1, 2006

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SECTION C: MANDATORY ATTACHMENTS

Submit a completed:

1. LACERS Affirmative Action Policy and Questionnaire;

2. American with Disabilities Certification;

3. Child Care Declaration Statement; and,

4. Certification of Compliance with Child Support.

All four aforementioned documents must be returned completed and signed with your proposals, with the original placed in the original binder of the RFP as Exhibit A. All other binders shall include the photocopies of the completed and signed copies found in Exhibit A. Copies of all forms are available on LACERS website at www.lacers.org.

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General Pension Fund Consultant

REQUEST FOR PROPOSAL

Questionnaire

January 24, 2006

Los Angeles City Employees’ Retirement System360 East Second Street, 2nd Floor

Los Angeles, CA 90012

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GENERAL PENSION FUND CONSULTANT RFP QUESTIONNAIRE

Organization

1. Provide the address of the local office that will service this account. If you have other office locations, where are they located (address and telephone number), and what are the primary functions performed within each office?

2. Give a brief history of your firm's involvement in the consulting business, including the year of organization. How many years has your firm provided pension fund consulting services to public pension plans (as of December 31, 2005) with total assets above $5 billion on a full retainer basis and in other capacities other than a full-retainer basis?

3. Describe the ownership structure, including affiliations and employee ownership. Has your firm undergone ownership structure changes in the past three years, or are ownership changes planned or anticipated at this time? Is your firm a Minority-owned Business Enterprise or a Woman-owned Business Enterprise (MBE/WBE)? If certified as such, please name the certifying body or organization. Include a copy of the organizational chart of parent/subsidiary relationships in Exhibit B and a copy of the organizational chart of proposer’s organization (indicating key personnel names and titles) in Exhibit C.

4. Does your firm act as a fiduciary when serving as a pension fund consultant? Is your firm a registered

investment advisor? If so, please provide a copy of Form ADV, Part II in Exhibit D. If not, what is your fiduciary classification?

5. What are your firm's consulting specialties and strengths? What differentiates your firm from your competition? What are your firm’s limitations? Who are your top 5 competitors? Why should LACERS hire your firm rather than your competitor(s)?

6. Disclose any relationship you have or have had with any LACERS Board member, consultant, or LACERS employee. If there are no conflicts of interest, please state, “There are no conflicts of interest to report.” In addition, do you have any written policies or procedures to address conflicts of interest, including (but not limited to) the payment of fees or other consideration from other clients, relationships, or entities that may compromise your fiduciary duty to your clients? If so, please include in Exhibit D.

7. What percentage of your firm’s revenue is derived from investment consulting services?

8. In addition to the investment consulting fees paid to your firm by clients who retain your firm as their investment consultant, what other sources of revenue does your firm and/or your firm’s affiliates receive that relate (directly or indirectly) to the provision of investment consulting services?

9. Does your firm generate fee income from investment management organizations? If so, do you receive compensation directly or indirectly?

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10. Does your firm or any of its affiliates manage money or provide trust services for clients? Does your firm have relationships with money managers that you recommend, consider for recommendation, or otherwise mention to the plan for our consideration? If so, please describe those relationships.

11. Is your firm or affiliate a broker/dealer? If yes, does this broker/dealer execute trades for portfolios for which your firm provides consulting services? Do you have any arrangement with broker/dealers under which you or an affiliated/related company will benefit if money managers place trades for their clients with such broker/dealers?

12. Describe your firm’s goals for expansion of its investment consulting business, and how this impacts your ability and commitment to servicing your existing clients.

13. Has your firm or any officer or principal of your organization been involved in litigation relating to investment management, brokerage, or consulting activities in the last 10 years? If so, provide a brief explanation and indicate the current status of the proceedings.

14. Do you subcontract or outsource any parts of your investment consulting business? If yes, please describe in detail which parts are performed externally and the reason for doing so. Please provide the name(s) of the providers, their office location, how long they have been in business, and the qualifications of the specific people who will be working on our account.

Clients

15. How many institutional clients does your firm currently provide a full range of investment consulting services.

Total Plan Assets

All Pension Plans

Number of Retirement Plan

Investment Consulting

Relationships Under $1 billion$1 billion to $5 billionMore than $5 billionFoundations & EndowmentsTaft Hartley PlansOther ERISA plans

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Total Plan Assets

Public Pension Plans Only

Number of Retirement Plan

Investment Consulting

Relationships Under $1 billion$1 billion to $5 billionMore than $5 billion

16. Indicate the total amount of assets under your pension fund consulting management at the end of each calendar year from 2001 to 2005. Please state Assets in US Dollars

12/31/05 12/31/04 12/31/03 12/31/02 12/31/01# of clientsAssets ($)

17. Indicate the approximate aggregate market value in US Dollars of your full service clients' investments in various asset classes as of 12/31/05 (do not overlap amounts).

Domestic equitiesDomestic fixed incomeNon-U.S. equitiesInternational bonds (not included above)Commercial mortgagesCash (not included above)Real estateAlternative investments (e.g., Buyouts, VC, Distressed Debt)Hedge FundsOtherTOTAL All client’s assets (100%)

18. List references for all public pension funds with assets equal to or greater than $5 billion for whom you provide primary consulting services comparable to the services requested in this RFP, and whether they are a full-retainer client. For each reference listed, include client name, name of contact person, title, address, telephone number, and email address. Please secure advanced permission to contact no less than three of these references and provide the name and title of the person(s) at your firm who secured the permission. In addition, for each client referenced, include number of managers monitored, fund

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diversification by asset class, inception date of consulting relationship, and the total number of dollars under management. If you have fewer than three public pension fund clients with assets above $5 billion, list at least two of the next two largest public pension plan clients, providing the same reference information and the amount of their funds, and whether they are a full-retainer client.

19. Provide a list of clients that have terminated your services within the last five (5) years, the dollar amount of assets under management at time of termination, and the reasons for termination of each.

20. Describe your plans for managing the future growth of your firm in terms of staff, maximum assets, number of clients, etc.

Personnel

21. For the investment consulting arm of your business, please list the number of professionals and staff involved in:

marketingclient relationship managers (consultants)researchmanager search (database) personnelperformance evaluation technical personneldata processingsupport serviceslegalother

- by TOTAL number of professionals; by TOTAL number of other staffNote: Please disclose information on professionals and staff that may serve in more than one of the functional area.

22. For primary personnel assigned to the LACERS account:List the names, and their biographies including titles, functions, academic credentials, professional affiliations, relevant experience, number of years with your firm, and their track record with investment performance of pension plans for which they provided consulting services. Disclose which office location they primarily are assigned to.

23. How many other accounts will the consultant assigned to our account be the primary or back-up consultant?

24. What policies are in effect to control the workload as it relates to the number of clients serviced by each consultant/relationship manager? Is there a limit on the number of accounts that a consultant/relationship manager may handle? What is the average number of accounts per consultant?

25. Describe the firm’s compensation and incentive program for hiring and retaining key consultant personnel. How does the firm tie client performance and satisfaction to a consultant’s compensation?

26. Explain turnover in key professional personnel (consultants, manager search, performance evaluation, etc.) in each of the last five (5) years. Indicate the number of people lost in the following categories:

marketingclient relationship managers

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researchmanager search (database) personnelperformance evaluation technical personneldata processingsupport serviceslegalother

27. Provide an organizational chart of your consulting unit listing major functional areas with the names and titles of key staff in each area along with the total number of staff in each area. If there are staffing overlap, please indicate and explain as a footnote.

Related Services

28. How do the standard services provided in your typical pension plan full service consulting relationship differ from those listed above, in SECTION A.4 STATEMENT OF INTENT AND BACKGROUND INFORMATION?

29. Briefly summarize your philosophy relating to the consultant's relationship with Boards; Staff; Investment Managers; Brokers.

Investment Policy/Asset Allocation

30. Describe your public pension fund experience and approach in developing and monitoring, and updating investment policies and objectives for a diversified pension fund. Comment on your process for analyzing a client's portfolio structure, for recommending modifications, and frequency.

31. Describe your method of conducting asset/liability studies. Is this covered in your full retainer fee?

32. Describe your firm's experience in customizing asset allocation studies for individual clients, including integration of liabilities and funding. How often does your firm recommend reviewing asset allocation? Asset liability?

33. Discuss how risk is assessed in the overall portfolio. Describe techniques that you support for managing risk and risk budgeting.

34. Discuss how you optimize the number and types of managers and how you assess the effect of including new managers. Discuss any statistical analysis that is performed.

35. What is your firm’s philosophy on active vs. passive investment management?

36. What is your philosophy on commingled vs. separate accounts? Describe any style preferences, biases or reasons for such that your firm has towards:a. value vs. growth investingb. large vs. small cap investingc. non-US investments

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d. emerging markets investmentse. real estatef. private equityg. timber, agriculture, oil and gash. hedge funds

37. Briefly discuss your views on portfolio rebalancing, in particular:trigger points for portfolio rebalancing (calendar, percentage, etc.)relative market value vs. volatilityrebalancing to threshold vs. to targetshould the portfolio be rebalanced between asset classes, or also down to the individual manager level?how should illiquid asset classes be treated for rebalancing purposes?

38. What systems will you make available to LACERS' staff to evaluate "what if" asset allocation scenarios?

Manager Database & Search

39. Describe your experience and capabilities in conducting searches for investment advisors and other investment services.

40. During calendar years 2003, 2004, and 2005, what type and how many searches did you conduct for clients with over $5 billion in assets for each year?

41. How many different managers were recommended by you for each year from 2003 to 2005 in each asset category (as listed in question 17)?

42. Describe your database that is used for manager searches.a. How many managers do you maintain on your manager search database?b. Is your system purchased or proprietary?c. How do you gather, verify, analyze, and update manager information? How frequently? How many

years of performance data s on the system, and are simulated returns included?d. How do you categorize managers? List manager styles, characteristics that distinguish each style in

your classification system, and include concise definitions.e. What criteria do you use in evaluating managers?

43. What fees or other consideration do you receive from managers who wish to be maintained on your database?

44. Describe the firm’s methodology and sources of data for analyzing and evaluating a potential manager’s performance. Discuss benchmarks and comparisons with other managers. How is risk factored into this analysis? How do you verify investment manager information such as performance history and their compliance with AIMR performance reporting standards?

45. Briefly describe how a new client would transition to your firm. Do you backload transaction and/or investment performance data? What problems have you encountered in transitioning a new client to your firm from their previous consultant. Please provide at least one reference (name, fund name, address, phone, email) of a recent client of yours whom we can contact regarding the transition process.

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46. Provide one example of a written recommendation to hire, and one recommendation to fire a manager that you have made within the last 12 months. Include copies of supporting documentation you provided to your client.

Other

47. What is your view on performance based fees for managers? Do you typically recommend performance-based fees over asset-based fees (or vice versa)? If you have a preference of one over the other or no preference, please explain why?

48. Include in Exhibit E a sample of your firm's standard reports and include in Exhibit F any other kinds of report samples. Do reports include an executive summary? If so please include a sample and place in Exhibit E.

49. Provide a yardstick, benchmark, measurement methodology, or other technique that a public fund plan sponsor might use for ongoing quantitative and qualitative evaluation of a full service consultant.

50. Please describe your emergency preparedness and backup office/computer system plans. Have you ever had to activate any parts the plan? If so, describe the effectiveness of the plan and any post-activity modifications to that plan.

51. Describe how the firm implements and uses the latest technology, and how such technology adds value to the firm’s clients. What internet technology do you provide to your clients?

52. Provide a list of any research reports that were prepared for your clients or the investment industry in the last three years. Include the topic of the research or article, and the name of the publication (and date) where it appeared. Include one sample in Exhibit G.

53. List the frequency or schedule of specific services that will be provided under your proposed fee.

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