**REQUEST FOR INFORMATION**

**Investment Adviser**

**General Information**

  ----------------------------------- -----------------------------------
  Document Type:                      Request for Information

  Solicitation Number:                NBC

  Posted Date:                        4/26/04

  Original Response Date:             5/17/04

  Original Archive Date:              

  Current Archive Date:               

  Classification Code:                Code \# Trust funds
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#### 

#### Contracting Office Address

#### Submissions in response to this Request for Information (RFI) should be sent to:

United States Department of the Interior, National Business Center

Attention: Ms. Fran Buhman

MS1324 Division of Acquisition Services

1849 C Street, NW

Washington, DC 20240

202-208-3931

202-208-4956 (Fax)

Fran_M_Buhman@nbc.gov

The United States Department of the Interior (DOI), Office of Insular
Affairs (OIA) solicits your qualifications for providing investment
advice and consultation services for a Trust Fund for the People of the
Federated States of Micronesia and a Trust Fund for the People of the
Republic of the Marshall Islands.

**BACKGROUND**

Public Law 108-188 authorizes the creation of the two trust funds. Over
the twenty years through 2023, Government of the United States will
contribute \$442 million to the trust fund for the Federated States of
Micronesia (FSM) and \$235 million to the trust fund for the Republic of
the Marshall Islands (RMI). The RMI will contribute \$25 million as soon
as its trust fund is established and \$2.5 million in each of the two
subsequent years; the FSM will contribute \$30 million by the end of
this fiscal year (before October 1, 2004). Income will accumulate
through the end of 2023. It is anticipated that \$46 million will be
available in fiscal year 2004 for the FSM trust fund, and \$32 million
for the RMI trust fund. After 2023, the income will aid in supporting
the governmental activities of the FSM and the RMI. These activities are
described in section 211 of the Compact of Free Association, as amended,
relating to the FSM and section 211 of the Compact of Free Association,
as amended relating to the RMI. Both amended compacts were approved in
United States Public Law 108-188. For salient details please read the
trust fund subsidiary agreements noted below and available on the web
site of the Office of Insular Affairs (see URL citation below).

The two trust funds will be incorporated separately in Washington, D.C.
in the very near future. This RFI is intended to jump start the
investment process. The responses to this RFI will be given to the two
new Trust Fund Committees for their consideration as soon as each
committee is established. At the discretion of each committee, action
may be taken to employ the Investment Adviser based on the information
received.

**REQUEST**

The Office of Insular Affairs (DOI) of the United States Department of
the Interior is soliciting in this Request for Information (RFI) your
qualifications for providing investment advice and consultation services
for the Trust Fund for the People of the Federated States of Micronesia
or the Trust Fund for the People of the Republic of the Marshall Islands
if you were chosen to be the Investment Adviser for either or both
trusts. Please respond specifically to each of the following requests:

**Organization and Services:**

1.  Provide a summary of the work of your firm and describe the overall
    financial strength of your company or parent company. Include the
    location of your organization's headquarters, depth of professional
    and support staff, year formed, ownership structure, primary contact
    person for this relationship, revenue generated from consulting
    services, and subsidiary or affiliate relationships.

2.  How many analysts are employed by your organization who are
    responsible solely for investment manager research? How many
    analysts are responsible for performance evaluations, performance
    attribution analysis, manager evaluation, due-diligence, etc.?

3.  Is your firm a registered investment advisor under the Investment
    Advisors Act of 1940? Can your firm provide fiduciary services for
    its clients?

4\. Please provide a full list of consulting services offered by your
firm.

> 5\. Describe your "consulting philosophy" (i.e. your role as a
> consultant).

**Investment Policy and Guidelines:**

1.  Describe the process you will use to assist us in the development of
    the investment policy, objectives and guidelines for these trust
    funds.

2.  How do see the role of our Trust Fund Committee in this process?

3.  Outline the Trust Fund Committee's fiduciary responsibilities in
    managing the assets? How would you assist the Trust Fund Committee
    and Trustees in meeting their fiduciary responsibilities?

4.  What process would you use to recommend an asset allocation strategy
    for these trust funds? What data is used in your asset allocation
    model?

**Manager Search/Database:**

1.  Please provide a detailed description of your firm's investment fund
    manager evaluation process. Does your firm sell any of its research
    to outside organizations such as other investment consulting firms
    or investment fund managers? If so, how do you control conflicts of
    interest? Is your database proprietary? Do you subscribe to an
    outside vendor? If so, provide the name of the vendor.

2.  What qualitative factors do you evaluate when researching investment
    fund management organizations? How does your firm identify
    qualitative problems at investment fund management organizations?
    How is historical investment performance used in your evaluation of
    investment fund managers? How do you verify a manager's performance
    composite?

3.  Does your investment fund manager research and evaluation process
    call for the use of subjective ratings of qualitative factors? If
    so, please provide a sample of an investment fund manager rating.
    Provide a breakout of how the overall rating is derived.

4.  How many managers are included in your database? Are managers
    required to pay your firm either hard or soft dollar fees to be
    included in your database? If so, how do you control conflicts of
    interest? Besides performance information, what other types of data
    are available on your database?

5.  Describe the circumstances under which you would terminate an
    investment fund manager.

**Performance Measurement**:

1.  Comment on your ability to provide performance measurement reports
    to suit the needs of the Trust Fund Committee. How frequently would
    you provide investment performance measurement reports to the Trust
    Fund Committee? Specifically, what types of exhibits would you use
    in a summary report that would be presented to the Trust Fund
    Committee? Please provide some examples.

2.  Describe the performance measurement software your firm uses. Is the
    software proprietary, or does your firm utilize the software of an
    outside vendor? If your firm uses non-proprietary software, do you
    have the ability to influence changes to the software to meet the
    demands of the marketplace and client?

3.  What other types of exhibits would you include in a detailed
    analysis of performance?

4.  Please describe how you monitor the style adherence of investment
    fund managers. Specifically, what types of reports would you use?

5.  Describe the performance attribution analysis services that you
    would provide.

**Additional Information:**

1.  Is your firm currently being, or has it within the past five years
    been, sued in a court of law for breach of fiduciary responsibility
    or for errors and omissions in the handling of client affairs? If
    so, please explain.

2.  Can your firm, or an affiliate of your firm provide custodial and
    fiduciary services.

3.  State what you believe distinguishes your consulting services from
    your competitors? Who are your competitors? What services can't your
    firm provide?

4.  Please provide the compensation schedule you would require for the
    services proposed. Break out hard dollar fees and soft dollar fees.
    Do you bill separately for spontaneous service requests, telephone
    conversations, etc.?

5.  Submit a list of client references.

**RELEVANT DOCUMENTS**

In order to properly respond to this RFI, interested parties must be
conversant with the following documents --

for the FSM:

> \(1\) Section 211, 215, and 216 of the Compact of Free Association, as
> amended, for the FSM, and
>
> \(2\) The agreement subsidiary to the Compact, as amended, relating to
> the FSM Trust Fund, and

for the RMI:

> \(1\) Section 211, 216, and 217 of the Compact of Free Association, as
> amended, for the RMI, and
>
> \(2\) The agreement subsidiary to the Compact, as amended, relating to
> the RMI Trust Fund.

These documents can be found at:

www.doi.gov/oia/solicittrustfunds/documents.htm

**TECHNICAL POINT OF CONTACT**

Stephen D. Sander

Office of Insular Affairs

Department of the Interior

\(202\) 208-4754

**(202) 501-7759 (fax)**