RFP Investment Managers for Investment Grade Credit and Municipal Bonds 370-500-20-002

Agency: Illinois State Treasurer
State: Illinois
Type of Government: State & Local
NAICS Category:
  • 523920 - Portfolio Management
  • 523930 - Investment Advice
  • 541611 - Administrative Management and General Management Consulting Services
  • 541990 - All Other Professional, Scientific, and Technical Services
Posted Date: Nov 26, 2019
Due Date: Jan 10, 2020
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RFP Investment Managers for Investment Grade Credit and Municipal Bonds 370-500-20-002
RFP Investment Managers for Investment Grade Credit and Municipal Bonds 370-500-20-002

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Request for Proposals
Investment Managers for Investment Grade
Credit and Municipal Bonds
370-500-20-002
November 26, 2019
Proposals due by 2:00 p.m. CT on January 10, 2020
Ms. Maria Oldani
Chief Procurement Officer
400 West Monroe Street, Suite 401
Springfield, IL 62704
Office of the Illinois State Treasurer
Request for Proposals
Investment Managers for Investment Grade Credit and Municipal Bonds
370-500-20-022
TABLE OF CONTENTS
I. OVERVIEW ....................................................................................................................... 3
II. BACKGROUND ................................................................................................................ 3
III. SCOPE OF SERVICES ...................................................................................................... 4
IV. RFP SCHEDULE AND PROCESS ..................................Error! Bookmark not defined.
V. PROPOSAL ........................................................................................................................ 5
VI. EVALUATION PROCESS AND CRITERIA ................................................................. 15
VII. CONTRACTUAL TERMS .............................................................................................. 18
Appendix A The Illinois State Treasurer’s Office Investment Policy Statement for the State
Investment Portfolio (“Policy”)
Appendix B Complete Equity Diversity and Inclusion Firm Profile
Appendix C Complete Sustainability Investments-Due Diligence Questionnaire
Appendix D Illinois State Treasurer Certifications, Disclosures Financial Interest and Potential
Conflicts of Interest (Disclosure Form A), and Disclosures Other Contract and
Procurement Related Information (Disclosure Form B)
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I. OVERVIEW
The Office of the Illinois State Treasurer (“Treasurer”) is issuing this Request for Proposals
Investment Managers for Investment Grade Credit and Municipal Bonds (“RFP”) to retain an
investment manager(s) to invest up to $200 million in investment grade credit bonds, pricing tiered
in $50 million increments and up to $100 million in municipal bonds, pricing tiered in $50 million
increments or a combination thereof, held in a separately managed account in the name of the
Treasurer. Firms that submit responses (“Respondents”) shall submit their responses to this RFP
(“Proposals”) by 2:00 p.m. on November 22, 2019.
This procurement has been designated by the Treasurer’s Chief Procurement Officer (“CPO”) as
a small business set-aside for small businesses in Illinois. For purposes of this RFP, a Respondent
will qualify as a “small business” if it meets the following criteria: (1) for purposes of investment
grade credit bonds, has less than $96.8 billion in total firm assets under management; (2) for
purposes of municipal bond investments, has less than $18.6 billion in municipal bond assets under
management; and (3) has no more than 100 employees. For purposes of computing the number of
employees, employees of any parent company and underlying subsidiaries must be included in the
calculation. Further, the Respondent must be authorized to do business in the State of Illinois and
either have a physical or significant economic presence in the State of Illinois as determined by
the Treasurer.
Respondents shall submit responses (“Proposals”) to this RFP by 2:00 pm CT on January 10, 2020.
The Treasurer intends to select the Respondent with the most effective yet cost efficient Proposal.
The successful Respondent (“Contractor”) shall enter into a contract with the Treasurer
(“Agreement”) for a term of 4 years. Upon expiration of this term, the Treasurer may elect to
extend the Agreement for a period of time agreed upon by the parties, not to exceed a total of
ten (10) years, including the initial four (4) years. The Treasurer may select more than one
Respondent to provide the Services.
II. BACKGROUND
Pursuant to Section 22.5 of the Deposit of State Moneys Act, 15 ILCS 520, the Treasurer is
authorized to invest or reinvest certain State money in the Treasury in corporations or limited
liability companies organized in the United States with assets exceeding $500,000,000, if the
following criteria are met:
A. The corporation or limited liability company has a significant presence in the State of
Illinois;
B. The obligations are rated at the time of purchase at one of the three (3) highest
classifications established by at least two (2) standard rating services;
C. The obligations mature more than 270 days, but less than ten (10) years, from the date of
purchase;
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D. The purchases do not exceed 10% of the corporation's or the limited liability company's
outstanding obligations;
E. No more than one-third of the public agency’s funds are invested in such obligations of
corporations or limited liability companies; and
F. The corporation or the limited liability company has not been placed on the list of restricted
companies by the Illinois Investment Policy Board under Section 1-110.16 of the Illinois
Pension Code.
Also pursuant to 15 ILCS 520/22.5, the Treasurer is authorized to invest or reinvest certain State
money in the treasury in bonds issued by counties or municipal corporations of the State of Illinois
(“Municipal Bonds”). Pursuant to the Policy, Municipal Bonds must meet the following criteria:
A. Earn interest under federal law;
B. Are rated, at the time of purchase at one (1) of the three (3) highest classifications
established by at least one (1) standard rating service with nationally recognized expertise
in rating bonds of states and their political subdivisions (upper medium grade for the long-
term rating of A- and above or equivalent rating);
C. Mature in a period equal to or less than ten (10) years, from the date of purchase; and
D. Are registered in the name of the State of Illinois or held under a custodial agreement at a
financial institution.
The Treasurer prefers to invest with bond issuers that can meet the investment size needs of the
Treasurer’s separately managed account as outlined in the Overview section and provide full-time
employment opportunities to at least 2,500 people corporate-wide. In addition, the bond issuers
should have a State of Illinois presence. Such “presence” can be demonstrated by the following
factors: the number and percentage of full-time employees; whether the corporate headquarters are
within Illinois; and whether there are other physical corporate offices or operating locations in
Illinois.
In the event a financial institution is the bond issuer, the Treasurer prefers such financial
institutions (parent or subsidiary) to be Community Reinvestment Act, 12 U.S.C. § 2901 et seq.,
(“CRA”) rated as Satisfactory or above.
III. SCOPE OF SERVICES
The Contractor will perform the following services (collectively, the “Services”) in accordance
with applicable State and federal laws, rules, and regulations:
A. Establish and maintain a separately managed investment account(s) (“Portfolio(‘s)”);
B. Develop an investment strategy for the Portfolio, subject to approval by the Treasurer, that
abides by the Policy;
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C. Research and invest in investment-grade credit bonds, pricing tiered to $50m increments,
that qualify for investment by the Treasurer;
D. Research and invest in Municipal Bonds, pricing tiered in $50m increments, that qualify
for investment by the Treasurer;
E. Research and invest in both investment-grade credit and municipal bonds, pricing tiered in
$50m increments, that qualify for investment by the Treasurer;
F. Track the performance of the Portfolio against industry benchmarks, agreed upon by the
Treasurer and Contractor;
G. Provide the Treasurer investment activity and investment performance reports of the
Portfolio on a schedule provided by the Treasurer;
H. Transfer the assets in the Portfolio, if requested by the Treasurer; and
I. Perform any additional related investment duties, as requested by the Treasurer.
IV. PROPOSAL
A. Proposal Format
All Proposals must be submitted within the prescribed format to facilitate objective review. Any
Proposal that materially deviates from this format will be rejected without further consideration of
its content. Proposals that contain false or misleading statements or that provide reference that do
not support an attribute or condition claimed by the Respondent may also be rejected. Narratives
should provide a concise description of capabilities to satisfy the requirements of the RFP.
Emphasis should be on clarity, brevity and completeness of response. The following are the
sections that must be provided in the Proposal. The sections should be labeled accordingly.
1. Cover page – The Proposal must be accompanied by a transmittal letter that designates the
name, physical address, e-mail address, and telephone number of the person or persons
available for contact concerning the Proposal and who is authorized to make
representations on behalf of the Respondent.
2. Table of Contents – Include a listing of the main chapters and paragraph headings
contained in the Proposal, including page numbers.
3. Introduction - Include any introductory remarks, not to exceed two (2) pages, deemed
appropriate. Briefly discuss such topics as the Respondent’s background, management,
facilities, staffing, related experience, and financial stability.
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