Attachment 4 - Questions and Answers.pdf

Question No.

Solicitation Page

Number(s)

Solicitation Section Reference Vendor Question PBGC Response Solicitation Amendment

(Yes/No)

1 25 Section 3 -

Instructions to Offerors

We would like to clarify with you if this RFP is open for traditional asset managers (non-small business) without the subcontracting clause?

This solicitation is open to all vendors that meet the mandatory requirements listed in the solicitation's Attachment 1:

"Minimum Eligibility Requirements." Per the solicitation's Section 4.7.9.4 (Small Business Participation), offerors that are classified as other than small businesses under NAICS Code 523940: “Portfolio Management and Investment Advice” shall submit a small business subcontracting plan. While submission is required for offerors that are not classified as small businesses under NAICS Code 523940, please note that the small business subcontracting plan will not be evaluated under the established evaluation factors.

No

2 1 Cover Page Could you please confirm if an asset manager needs to qualify as a small business, based on the SBA size standards for NAICS code 523940, to be eligible for award for this contract?

Please note that this solicitation does not have a small business set-aside. Therefore, a vendor does not need to qualify as a small business based on the SBA size standards for NAICS code 523940 to be eligible to submit a proposal in response to this solicitation. Furthermore, the offeror does not need to meet the requirements of any other small business concern

(e.g., veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, or women-owned small business concern) to be eligible to submit a proposal in response to this solicitation.

No

3 11 Section 2 – Statement of Work

In the noted paragraph, the RFP states: “PBGC intends to add to its roster of fixed income managers in the Trust Fund. PBGC anticipates hiring multiple SAMP managers capable of managing fixed income assets across multiple fixed income mandates or strategies.”

To clarify, is the intent of the RFP to select one or more smaller asset managers only for the desired U.S. Core Fixed Income mandate? Or, rather, is the intent to select one or more asset managers of any size for the U.S. Core Fixed Income mandate, but the SAMP minimum eligibility framework will be used to ensure a broader pool of potential asset managers from which to select?

Please see the response to Question #2 above.

Additionally, the intent of this solicitation is to select multiple offerors for a U.S. Core Fixed Income mandate within PBGC's

Smaller Asset Managers Program. PBGC would reserve to right to utilize these managers for other Fixed Income mandates based on the needs of the investment program and other factors.

No

PBGC Smaller Asset Managers Program (SAMP) Solicitation - Industry Questions and PBGC Responses

4 34 Attachment 1 -

Minimum Eligibility Requirements

I was hoping you could qualify what counts as a Smaller Asset Manager. For example, we have approximately $200 billion in assets, would that be above the threshold? We have approximately $3.5 billion in the subject product – would that qualify us?

This solicitation is open to all vendors that meet the mandatory requirements listed in the solicitation's Attachment 1:

"Minimum Eligibility Requirements." While there is no maximum threshold for assets under management in order to be eligible to submit a proposal in response to this solicitation, please note that the PBGC Board established this solicitation's requirement as an ongoing program to be called the Smaller

Asset Managers Program (SAMP).

No

5 34 Attachment 1 -

Minimum Eligibility Requirements

Based on your prior manager selections under the pilot program, we wish to ensure that our firm will be eligible for selection in this round.

We are a $14 billion AUM fixed income manager, which is a division of a larger RIA, which is a wholly-owned subsidiary of a publicly-traded multi-boutique asset management company*. Given that we are not employee-owned, nor are we categorized as a WMBE, are we still eligible to be considered under this SAMP? Do we qualify as a small asset manager?

Please see the response to Question #2 above.

Additionally, a firm does not need to be employee-owned to be eligible to submit a proposal in response to this solicitation.

No

6 34 Attachment 1 -

Minimum Eligibility Requirements

Are there minimum and/or maximum asset requirements to qualify as a Smaller Manager, and do they apply to the strategy or firm level?

Also, is it a requirement to be a smaller manager in order to be eligible for this RFP?

Please see the responses to Questions #2 and #4 above. No

7 10 Section 2 – Statement of Work

Would you be able to provide detail on The Smaller Asset Managers Pilot Program (SAMPP), and the size / type of firms that would qualify for consideration?

Please see the solicitation's Section 2: "Statement of Work" for details on the Smaller Asset Managers Pilot Program

(SAMPP) and the Smaller Asset Managers Program (SAMP).

Regarding size and type of firms, please see the responses to Questions #2 and #4 above.

No

8 34 Attachment 1 -

Minimum Eligibility Requirements

Is this requirement limited to “Smaller Asset Managers” and if so, what would that definition entail? We are an asset manager focused on public equities/public fixed income. Our AUM is ~$200B and we manage about $40B in overall fixed income assets (that number includes all strategies-international, multi sector, high yield, etc., so core is a much smaller number).

Please see the response to Question #4 above. No

9 11

Section 2 – Statement of Work

Section 2.1 Investment Mandate

Paragraph 3.

Can you please elaborate on what you mean by manage across multiple fixed income mandates? Does PBGC intend to hire SAMP managers for additional fixed income mandates or to change the RFP mandate at any point in time?

While the intent of this solicitation is to select one or more managers for a U.S. Core Fixed Income mandate within

PBGC's Smaller Asset Managers Program, PBGC would reserve to right to utilize these managers for other Fixed Income mandates based on the needs of the investment program and other factors.

No

10 21

Section 4 - Instructions to

Offerors

4.6.2.0 Proposal

Formatting

Please confirm that only an electronic submission of the RFP is required. Correct. Only electronic submission of the RFP is required. No

11 21

Section 4 - Instructions to

Offerors

4.6.2.0 Proposal

Formatting

Should each volume of the RFP be a single tabbed PDF (single PDF file with the RFP and all attachments)?

Yes. Please see the changes in the solicitation's Amendment 0001. Yes

12 35 Attachment 1 -

Minimum Eligibility Requirements

Is the IR average calculation requested being based on gross or net returns?

The IR average calculation will be based on gross returns.

Please see the changes in the solicitation's Amendment 0001. Yes

13 37 Attachment 1 -

Minimum Eligibility Requirements

Can you confirm that your request in Attachment 1 - Table 1 is for alpha or excess return? Alpha is sometimes confused with excess return

In the column for alpha, the gross excess return generated versus the benchmark should be entered. No

14 12

Section 2 – Statement of Work

2.2 Scope of Work, Fidelity Bond and

Insurance Coverage

Our fidelity insurance coverages have much higher limits then the state requirements, however our deductibles are higher as well. Is there any flexibility on the deductible amount? Our firm has maintained a $1,000,000 investment account for purposes of funding any potential cash needs to the business. This is in addition to our regular working capital which is typically exceeds $2,000,000

Please refer to the solicitation's Attachment 1 for the timing of when insurance is required after contract award. No

15 24

Section 4 - Instructions to

Offerors

4.7.9.3 Factor 3 –

Past Performance

Please specify the difference between customer point of contact and contracting officer owner name

The intent of this requested information is to provide PBGC with a point of contact outside of your firm for your firm's referenced project.

For referenced projects that supported the federal Government, it is recommended that you list the cognizant federal

Contracting Officer. A Contracting Officer is the person with the authority to enter into, administer, and/or terminate contracts.

For referenced projects that support state or private sector projects (e.g., plan sponsor), it is recommended that you list the cognizant customer point of contact. PBGC's recommendation is that the recommended customer point of contact is the individual from the supported business that is most familiar with your investment firm's work on the project.

No

16 49

Attachment 2 - Product Level Questionnaire

Investment Results #5

The Sample Table includes “benchmark weight”. Are you looking for the CUSIP’s benchmark weight or is it acceptable to include the Issuer’s benchmark weight?

Portfolio holdings should be listed at the CUSIP level and the benchmark weight is at the CUSIP level as well. Preferably, the list should sort the holdings by industry sector (include any cash holdings) and provide the corresponding total for the benchmark weight.

No

17 35

Attachment 1 - Minimum Eligibility

Requirements

Product Level Minimum Eligibility requirements (Core

Fixed Income) Questions B and C

Both Questions require supporting documentation showing evidence of B) Strategy Assets over $250mm and C) tax-exempt institutional account over $25mm. Will a list of clients with market value, client type, etc. suffice for this request? If not, please provide details on required supporting documentation.

Yes, to the extent the information provided meets the minimum requirements listed in the solicitation's Attachment

1.

No

18 55

Attachment 3 - Firm Level Questionnaire

A. Business Issues and Strength of the Firm Question #9

Question requests audited financial statements for most recent fiscal year through 06/30/2022. Our firm operates on a 09/30 fiscal year, with audited financial statements available through 09/30/2021. Will a copy of 09/30/21 audited financials suffice or is additional documentation required?

Audited financial statements from the most recent fiscal year are required per the solicitation's Attachment 3. Unaudited financials are requested as of 6/30/22 if audited financials are not available.

19 19

Section 4 - Instructions to

Offerors

Section 4 Paragraph 4.1.1

Are there maximum file size restrictions? If so, may we submit the RFP in more than one email?

In the event your firm is unable to submit the proposals in a single email, more than one (1) email is permissible. No

20 19

Section 4 - Instructions to

Offerors

Section 4 Paragraph 4.3.1

This section states “The Offeror shall include, in its Volume III: Price Proposal,” completed fill-ins for the following clauses:

-FAR 52.209-7 -

FAR 52.212-3

In addition to completing Attachment 4: “Price Worksheet” and other required documentation, do we need to complete and submit FAR 52.209-7 and FAR 52.212-3?

Yes, your firm will need to complete and submit its responses to FAR 52.209-7 and FAR 52.212-3. No

21 34

Attachment 1- Firm Level Minimum

Eligibility

Requirements Item D

As a privately- held company, we believe our audited financial statements are exempt from public disclosure. If we submit our audited financial statements and mark them “Confidential,” will PBGC exclude them from public disclosure?

Yes, unless otherwise stipulated by FOIA requirements, PBGC will exclude your audited financial statements from public disclosure.

No

22 35-36

Attachment 1- Firm Level Minimum

Eligibility Requirements, Item G

Should we provide the IR Table as an excel spreadsheet, an Adobe PDF table or both? Please see the changes in the solicitation's Amendment 0001. Yes

23 47-48

Attachment 2 - Product Level Questionnaire

C. Investment Results, 3. "Provide the quarterly, quarter-end sector allocations of the portfolio and the appropriate benchmark for the previous five years in the following table.

Please specify the benchmark used

Table 9"

Please provide the table column headings as some of them are cut off. Please see the changes in the solicitation's Amendment 0001. Yes

24 25 Price Proposal” (Section 4.7.10.1), Can you please define Base Year and Option Period and include an example?

A Base Year is the first twelve (12) months of performance of an awarded contract. An option period is an additional twelve

(12) months of performance that may be executed unilaterally by PBGC in accordance with FAR 52.217-9. Per the solicitation, PBGC anticipates awarding contracts with one

(12) twelve-month base period and nine (9) twelve-month option periods from the date of contract award. Please see the solicitation's Section 1 for examples.

25 10

Section 2 – Statement of Work

2.1

What is the risk/return target range of the portfolio? PBGC sets individual portfolio risk/return targets upon reward based on negotiated guidelines and program needs. No

26 10

Section 2 – Statement of Work

2.1

Is PBGC looking to invest in Core and/or Core Plus strategies?

Please see the solicitation's Attachment 3: Product Level Minimum Eligibility Requirements. PBGC may invest in

Core and/or Core Plus strategies benchmarked to the Bloomberg U.S. Aggregate Bond Index.

No

27 11

Section 2 – Statement of Work

2.1 and 2.2

Will PBGC consider an allocation to below Investment Grade (IG) credit within the portfolio?

Yes. Investment guidelines will be negotiated between PBGC and the contractor(s) subsequent to contract award. No

28 24

Attachment 4 - Instructions to

Offerors

4.7.9.3

Can client references be from both separate accounts and pooled funds? Yes. No

29 34

Attachment 1 - Firm Level Minimum

Eligibility Requirements

Would PBGC consider a comingled fund/CTF? Or is PBGC only considering a Separately Managed Account (SMA)?

Per the solicitation's Attachment 1, the proposed qualifying product shall be actively managed against the Bloomberg U.S.

Aggregate Bond Index and available in a separate account format.

No

30 37

Attachment 1 - Product Level

Minimum Eligibility Requirements

Are we required to use Adobe Tables? Meaning, are we able to draft in Microsoft Word and then PDF the document? Offerors are not required to use Adobe Tables. No

31 41 Attachment 2 - Product Level Questionnaire

Are there any limitations to derivatives in the portfolio?

PBGC permits the use of derivatives in its investment program; however, it has specific guidelines around derivative exposure and use. Guidelines will be negotiated after contract award.

No

32 53

Attachment 2 - Product Level Questionnaire

D.5

Please clarify “flow of funds into this sector”. Do you mean net flows into the strategy?

Yes. Please see the changes in the solicitation's Amendment 0001. Yes

33 25

Section 3 - Instructions to

Offerors

Section 4.7.9.4. Small Business Participation

“Offerors that are classified as other than small businesses under NAICS Code 523940…shall submit a small business subcontracting plan.” Can you direct us to where “small business” is defined for this NAICS code? We are unable to find that figure.

The SBA's small business size standards may be accessed here:

https://www.sba.gov/sites/default/files/2022- 12/Table%20of%20Size%20Standards_Effective%20Decembe r%2019%2C%202022_508%20%281%29_0.pdf

34 51

Attachment 2 - Product Level Questionnaire

C16

What are PBGC’s limits to percentage of portfolio investible in plus sectors? For a core plus mandate, may investments be made in non- US securities, including developed markets investment grade and high yield, and emerging market corporate debt?

Limits around investments in plus sectors are set at the portfolio level and negotiated as part of guidelines after contract award.

No

35 53

Attachment 2 - Product Level Questionnaire

D5

Question D5 appears to request flows into the proposed strategy. Is the period requested as of 6/30/22? Yes No

36 11 Section 2 - Statement of Work

Is the PBGC willing to consider any fixed income benchmarks outside of the US Bloomberg Aggregate Index? No No

37 General Question General Question Does the PBGC currently invest any of its assets in a liability-aware manner? Yes No

38 General Question General Question Has the plan experienced any funded status gains given the recent rise in Treasury yields? Yes No

39 34 Attachment 1- Firm

Level Minimum Eligibility

Our interpretation of the instructions yield 120 data points of rolling 36-month IRs (ten years of rolling IRs with the first observation being the month ended 8/31/09). This yields an average IR of 0.57 and qualifies us to respond.

Another approach, which incorporates fewer data points, is to begin observations in July 2012. This approach does not capture rolling IRs for a full ten year period, but rather for only 85 months (~seven years). This yields an average IR of 0.48, and disqualified us to respond.

Of course, we favor the approach which incorporates a fuller data set and reflects ten full years of rolling IRs, and believe this to be what the PBGC is requesting. We also believe our performance reflects a robust investment program that may be value-adding alongside the incumbent managers within the PBGC’s portfolio, but above all we want to respect your process. Can you please provide guidance on which method the PBGC wishes us to utilize?

The solicitation's Attachment 1's instructions clearly stipulate the timeframe and methodology. No