Public Equity RFQ.docx

Employees Retirement System of Texas Request for Qualifications to Provide Public Equity Investment Advisory Services RFQ No. 26-15426-001

Request for Qualifications Summary

A.1. Introduction. The purpose of the RFQ is to select qualified Advisors that have existing strategies to provide public equity investment advisory services to the Employees Retirement System of Texas (ERS). A detailed description of these Services can be found in RFQ Section B, Scope of Services. The particular strategy ERS seeks at this time can be found in Appendix D.

A.1.a. Selection Process. ERS has structured this procurement as a Request for Qualifications (RFQ) as a means to determine best value to the members and Trust. To ensure full transparency and pursuant to Texas Government Code Section 2155.146(b), ERS’ Board of Trustees approved this procurement method during the December 2025 Board meeting. To signify interest in being considered for ERS’ current search, potential Respondents must have submitted data on firm/strategy to eVestment. No other action is required unless ERS contacts the potential Respondent as detailed in Section C.3. For each search, ERS will first rely on eVestment for Minimum Qualifications evaluation by identifying firms/strategies that can potentially meet the current and/or anticipated needs of the public equity asset class for investments for the Trust. Relying on criteria provided in RFQ Section E.1.a., ERS will then identify which firms/strategies in eVestment meet the thresholds identified for these criteria for the particular search. ERS will then score additional eVestment data as described in RFQ Section E.1.b. Based on this initial evaluation, these pre-qualified firms will be invited to submit a Response. ERS will evaluate the Responses as described in RFQ Sections E.2 - E.2.a.iii. for the Due Diligence Review Phase. ERS may then select top-ranked Respondents to move forward as Finalist(s). As a result of further review and additional requested documents during the Finalists Review Phase, Finalist(s) may be recommended and approved as Advisor(s) for the Select Pool. ERS will contract with Advisor(s) in the Select Pool. After contracting with Advisor(s), ERS may select Advisor(s) to provide Services on an as-needed basis pursuant to the terms of the Contract. ERS has sole discretion to then engage any Advisor(s) from the Select Pool that is available, can meet any applicable deadlines, and offers the best value to ERS for the particular investment strategy. See RFQ Section E, Evaluation Process, for additional information. ERS may repeat this search-selection process at any time or abandon a search-selection process at its discretion.

A.1.b. Per ERS Investment Policy Statement, ERS has the authority to hire external investment advisors. ERS hires external investment managers to serve as advisors without granting full investment discretion. Historically, ERS has used the term “advisor” rather than “manager” because ERS maintains discretion. ERS Investments Staff evaluates and monitors individual investments, as recommended by advisors. In many cases, ERS retains trading execution. In certain circumstances, alternative trading processes may be considered when working with advisors, but in either case, advisors must have ERS approval and comply with all requirements that would be applicable to an internal trade. Decisions on trading execution will be made by ERS Investments Staff in consultation with the Advisor during Contract negotiations. Refer to RFQ Section E.6., Contract and Funding, for further information.

A.1.c. Definitions. A list of definitions applicable to the terms used in the RFQ are in RFQ Section I. Respondent shall use this section as a reference because the terms will not be defined within the text of the RFQ.

A.2. Contract Term. The Contract Term will begin on the date specified in the Contract and will continue and can be terminated as provided for in the Contract.

Scope of Services

ERS will not accept Deviations to the Scope of Services.

Advisor Services

B.1. Upon funding, Advisor shall provide public equity investment advisory services to construct, maintain, and monitor an investment portfolio that is consistent with and integrated into ERS Investment Policy Statement.

B.1.a. Advisor shall invest a portfolio in accordance with ERS Investment Policy Statement (see link located in RFQ Section I, Definitions) and provide guidance to ERS Investments Staff on aspects of the portfolio, including, but not limited to, sector and security selection, portfolio structure, and timing of recommended purchases and sales.

B.2. Advisor will provide the Services to the Board, Executive Director and ERS Investments Staff to assist in the management of ERS’ public equity assets. Advisor shall:

· Provide information, research, and analysis that may be of benefit to ERS;

· Monitor portfolio performance against the designated benchmark(s);

· Provide monthly, quarterly and annual quantitative and qualitative assessments of the portfolio;

· Report timely on key events that may impact the portfolio’s value such as market changes, geopolitical, personnel, or regulatory changes;

· Attend ERS Board meetings, Investment Advisory Committee meetings and/or legislative hearings, as requested; and

· Maintain regular communication with the Chief Investment Officer, Managing Director of Public Equity and/or the External Advisor Team, including telephone and onsite consultations and assistance, as required by ERS.

B.3. In fulfilling this Contract, Advisor shall take direction from the Chief Investment Officer, Managing Director of Public Equity and/or the External Advisor Team. These Services shall be subject to reasonable deadlines established by ERS.

B.4. Advisor shall:

· Demonstrate continuity of key personnel and have institutional fund experience;

· Have an established, competent back office environment and maintain adequate segregation of duties between front and back office;

· Have an established compliance framework;

· Have integrated systems and/or processes in place in order to accurately capture and report, protect, and store data;

· Ensure the security, confidentiality, integrity, and availability of ERS data in accordance with all applicable laws and regulations, both state and federal;

· Have a clearly defined investment philosophy and decision-making process; and

· Demonstrate generally favorable and consistent historical performance, based on a composite of all fully discretionary accounts of similar investment style relative to a predetermined benchmark.

Security Practices and Business Resumption

B.5. Encryption. All computing devices (e.g., laptops, desktops, and servers) and storage devices that contain, process, or interact with ERS data shall be encrypted at rest.

B.6. Disaster Recovery Plan. Advisor shall have a written disaster recovery plan that provides for the recovery of Advisor’s electronic data and data processing equipment. The business-related functions that Advisor uses to provide the Services shall be addressed by the written disaster recovery plan. Advisor’s disaster recovery plan shall be tested annually.

B.6.a. Advisor shall deliver to ERS, upon request during the Contract Term, a summary of its disaster recovery plan and a summary of its latest disaster recovery test results. The summary of the latest disaster recovery test results should state the date the last time the disaster recovery plan was tested. The documents must be based on actual testing within the last twelve (12) months of all systems and applications required to provide the Services under this Contract. If requested, Advisor shall also include a copy of, or allow for the virtual viewing of, the Recovery Time Objective (RTO) and Recovery Point Objective (RPO) as well as the actual recovery time and recovery point from the tests for each system and application. If these are part of a SOC-2 Type II report, Advisor shall provide the portions of the report that refer to the applicable annual disaster recovery and business continuity tests, plus copies of the service auditor’s report. Tabletop exercises are not permitted to show compliance with this requirement.

B.6.a.i. Advisor shall be readily available for reasonable inquiry by ERS of the disaster recovery plan and test results.

B.7. Recovery Time Objective. All the Services provided to ERS under the Contract will be fully operational within ninety-six (96) hours after any business interruption.

B.8. Recovery Point Objective. Advisor shall not lose more than ninety-six (96) hours of data in the event of a business interruption.

B.9. Business Continuity. Advisor shall maintain a business continuity plan that ensures its ability to continue to provide the Services under the Contract during an unplanned interruption to business operations. The plan should include communications, personnel, any subcontractor upon whom Advisor relies in performing or providing services or products to or on behalf of ERS, alternate office arrangements, and other elements typical of a business continuity plan and as applicable to the Services under the Contract.

Schedule of RFQ Process and Submittal Requirements

C.1. Schedule of RFQ Process. The RFQ process will be conducted in accordance with the following schedule. ERS reserves the right to change any and all deadlines below at any time. For more information regarding each of the review phases, see RFQ Section E. Each time ERS is seeking a new strategy, the RFQ will be published with an updated Appendix D (ERS Investment Strategy Description). The review phases below will be repeated on an ongoing basis as needed for additional strategies.

*Anticipated time frame for these phases is 20 -30 business days; however, as noted above, ERS reserves the right to change any and all deadlines at any time.

C.2. Euna Procurement (formally known as Bonfire). As provided for in the ESBD notices published by ERS, ERS’ procurement tool, Euna, is where ERS manages the submission of the Response documents and communications to Respondents. When ERS invites a potential Respondent to submit a Response, ERS will provide this link to create a Euna account: erstexas.bonfirehub.com

C.3. Response Submission. Potential Respondents have at least sixty (60) days from the publication of Notice of Intent to Procure and fourteen (14) days from the ESBD publication of the RFQ to have submitted data on firm/strategy to eVestment. No other action is required unless specifically contacted by ERS. Potential Respondents will be emailed if they have met the Initial Review Phase requirements. If contacted, potential Respondent may then submit a response online via Euna, with the exception of the Short Form which shall be completed on ERS’ External Advisor Website. (See Response Deliverables in RFQ Section F and the Deliverables Checklists in RFQ Section J).

C.3.a. Deadline. Responses must be uploaded, submitted, and finalized by the deadline specified in Euna.

C.3.b. Euna Requirements. The maximum upload file size in Euna is 1,000 MB. All documents submitted in Euna shall be submitted in the file formats listed in Euna.

C.3.c. Technical Questions. Respondent may contact ERS at ivendorquestions@ers.texas.gov or Euna at https://erstexas.bonfirehub.com/portal/support for technical questions related to submissions submitted via Euna. Respondent may also visit Euna’s help forum at https://vendorsupport.gobonfire.com/hc/en-us. Contact ERS at advisorsearch@ers.texas.gov with a copy to ivendorquestions@ers.texas.gov for questions related to Short Form submissions completed on ERS’ External Advisor Website.

C.4. Respondent shall provide true and accurate answers in all communications and documents provided to ERS. Respondent’s Response documents and communications shall use the terms defined in the Investment Management Agreement and RFQ only as they are defined.

C.5. Amendment. ERS may, at its discretion, post an amended RFQ to Euna to revise the RFQ or provide additional information to clarify the provisions of the RFQ. ERS will also publish a notice on ESBD regarding the amendment and notify the potential or current Respondents impacted by these revisions. As applicable, Respondent shall acknowledge each amendment in the Acknowledgment of Receipt of Amendment section of the Signature Page (Appendix A). Note: When ERS seeks a new strategy and publishes the RFQ with an updated Appendix D, this will not be considered an amended RFQ unless noted as an amendment in the ESBD publication notice.

Minimum Qualifications

D.1. ERS will not contract with Respondents who do not meet all of the Minimum Qualifications listed below. ERS will evaluate the Minimum Qualifications during the Initial Review Phase. However, if at any time during the evaluation process ERS determines that Respondent does not meet these qualifications, Respondent will be disqualified from further review.

· Respondent’s organization is a bank, insurance company, or investment advisor as defined by the Investment Advisers Act of 1940 and is in good standing with the SEC.

· Respondent has submitted all relevant information about the firm and strategy to eVestment.

· Respondent has been in business for a period of no less than three (3) continuous years and has at a minimum $500 million in assets under management at the firm level.

Evaluation Process

Initial Review Phase Evaluation

E.1. In the Initial Review Phase, ERS will evaluate potential Respondents based on the Minimum Qualifications in Section D.1. and based on the current and/or anticipated needs of the Trust. ERS will apply parameters to the eVestment data as described below in Section E.1.a. to determine which firms are potentially qualified to provide the Services for the current search. ERS will then evaluate additional eVestment data based on selected criteria for a particular search as described in Section E.1.b. to determine if the strategy meets the current and/or anticipated needs of the public equity asset class for investments for the Trust.

E.1.a. Pass/Fail Criteria. For each strategy, ERS will evaluate eVestment data for the following criteria on a pass/fail basis subject to the parameters detailed in Appendix D:

· Asset Class;

· Investment Focus;

· Portfolio Management Strategy;

· Preferred Benchmark;

· Equity Style Focus;

· Primary Equity Capitalization;

· Primary Investment Approach;

· Tracking error.

E.1.b. Numerically Scored Criteria. For each strategy that ERS passes on the above criteria, ERS will further evaluate eVestment data based on the following criteria, as applicable to a particular search and as detailed in Appendix D, by assigning a numerical score.

· Firm Information;

· Strategy Information;

· Risk/Return Profile;

· ERS Portfolio Fit.

E.1.c. Based on the above evaluation, ERS will determine the top-scoring strategies qualified for further evaluation in the Due Diligence Review Phase. These firms will be sent an email invitation via Euna to submit a Response by the deadline specified.

Due Diligence Review Phase Evaluation

E.2. In the Due Diligence Review Phase, ERS will first evaluate the Short Form, Investment Due Diligence Questionnaire (IDDQ), Form ADV, and Firm/Strategy Marketing Presentation based on the following criteria:

Note: ERS reserves the right to take into account relevant eVestment data impacting these criteria. ERS may also conduct remote interviews and ask Clarifications regarding any information submitted. New or clarified information on any of these items may impact scores, as applicable.

E.2.a. ERS will evaluate the following items on a pass/fail basis, and for each of these items, ERS may begin review during the Due Diligence Phase and carry over the review and finalize it in the Finalists Review Phase:

E.2.a.i. Operational Due Diligence Questionnaire (ODDQ) Information. ERS will evaluate the ODDQ information received from Respondent.

E.2.a.ii. Contractibility. ERS will evaluate Contractibility based upon Respondent signing an Investment Management Agreement (Appendix B) acceptable to ERS. As stated in RFQ Section G.1., ERS prefers that the Respondent does deviate from the Investment Management Agreement. However, if Deviations are submitted, ERS will not fail a Respondent based solely on the fact that Respondent provided Deviations to the Investment Management Agreement. That being said, Deviations to the Investment Management Agreement that are not withdrawn by Respondent at ERS’ request may result in Respondent receiving a fail score for Contractibility.

E.2.a.iii. Fee Proposal. ERS will review Respondent’s Fee Proposal based on reasonableness of the proposed fees. Only Respondents that ERS determines are offering fair and reasonable fees will qualify for the Finalists Review Phase. ERS may continue or further negotiate fees after selection.

Finalists Review Phase Evaluation

E.3. After the Due Diligence Review Phase is complete, ERS will recommend the top-ranked Respondents as Finalist(s) for further review as detailed below. ERS is not obligated to notify Respondents that have not qualified for the Finalists Review Phase.

E.3.a For any information gathered in the Finalists Review Phase, including Clarifications, ERS may update the scores from the Due Diligence Review Phase subject to the same criteria as shown below:

E.3.b. In addition to finalizing (if applicable) any pass/fail items from the Due Diligence Phase, ERS will also evaluate the following items on a pass/fail basis:

E.3.b.i. Site Visits. If determined to be necessary by ERS, ERS’ designated staff may perform site visits on-site or remote at ERS’ expense to each Respondent’s investment/operational facilities.

E.3.b.ii. Vendor Checks. ERS will evaluate certain vendor checks required by the CPA.

E.3.b.iii. Reference Checks. ERS reserves the right to contact any of the entities provided in Appendix F when evaluating Respondent’s past performance. ERS is not limited to contacting references provided by a Respondent and may contact other persons or entities in connection with ERS’ due diligence process. If a Respondent has performed services for ERS in the past ten (10) years, ERS may also rely on its own experience with the Respondent as part of this check.

E.3.b.iv. Legal Requirements, Regulatory Compliance and References Questionnaire (Appendix F). ERS will evaluate responses to this questionnaire.

E.4. Compliance and Responsiveness. ERS reserves the right to determine a Response is noncompliant with or nonresponsive to the RFQ at any time it becomes apparent to ERS that any documentation submitted for the Response is noncompliant or nonresponsive. If Respondent does not respond to ERS’ Clarification requests or other communication by the stated deadline, whether via Euna or otherwise, Respondent may be deemed nonresponsive.

E.5. ERS will not select a strategy that is non-compliant with either Tex. Gov’t Code Chapter 802 or Tex. Gov’t Code Chapter 809. In order to be selected, the manager’s proposed strategy must rely solely on enhancing and protecting long-term value to ERS; more specifically, the strategy’s investment selection methodology must be based solely on financial factors and may not be based in whole or in part on establishing or endorsing any social, political, or ideological interests. The manager shall not be listed on any applicable government agency’s list of prohibited companies for contracting or investments.

E.6 ACIC Approval. ERS will recommend Finalist(s) to the ACIC who will review those recommendations and approve the Finalist(s) who will be placed into the Select Pool. Funding, defunding, or removal of an Advisor or other actions regarding Advisors in the Select Pool will be recommended by ERS Investments Staff for action by the Chief Investment Officer in consultation with the Executive Director, as detailed in ERS Investment Policy Statement. ERS is not obligated to notify Finalist(s) that are not approved for placement into the Select Pool.

E.7. Contract and Funding. After a Finalist has been approved for placement into the Select Pool by the ACIC, ERS’ Office of the General Counsel will finalize Contract negotiations, including fees. Funding will take place on an as-needed basis after Contract execution, based on recommendation by ERS Investments Staff and approval by the Chief Investment Officer in consultation with the Executive Director.

Response Deliverables

Due Diligence Review Phase Deliverables

F.1. When a potential Respondent receives an email invitation via Euna to submit a Response, Respondent shall submit the following Response deliverables listed in the Due Diligence Review Deliverables Checklist in RFQ Section J.1. by the deadline specified in Euna and further detailed below:

F.1.a. Short Form. A separate Short Form for each proposed strategy shall be completed on ERS’ External Advisor Website at the following link: https://advisorsearch.ers.texas.gov. Even if Respondent has submitted a Short Form in the past, Respondent shall submit an updated Short Form in response to this RFQ for each proposed strategy with information at least as current as the preceding quarter. A Short Form sample is in Appendix C.

Note: All other Response deliverables listed below shall be submitted online via Euna at the following link: erstexas.bonfirehub.com.

F.1.b. Investment Due Diligence Questionnaire (IDDQ). Respondent shall provide its standard Investment Due Diligence Questionnaire, which, at a minimum, must include the information below. If Respondent does not already have a standard Investment Due Diligence Questionnaire, Respondent shall ensure its submission includes the same information:

· Firm Information (details regarding firm history, ownership structure, management team, and breakdown of firm assets under management); and

· Strategy Information (details regarding investment team, investment strategy, investment philosophy and process, portfolio characteristics, risk management, and breakdown of strategy assets under management).

ERS reserves the right to request additional IDDQ information during the evaluation process.

F.1.c. Form ADV. Respondent shall provide its most recent Form ADV Part 1 and Part 2 filed with the SEC. If the file exceeds the maximum upload file size of 1,000 MB in Euna, Respondent may upload a link for this deliverable.

F.1.d. Firm/Strategy Marketing Presentation. Respondent shall provide the most recent version of its overview of the firm and strategy.

F.1.e. Fee Proposal. Respondent shall submit its fees. ERS is interested in asset-based and performance-based fee structures and one (1) or both may be included in the Fee Proposal. If Respondent includes performance-based fees, Respondent shall include base fee, incentive fee, and a cap for fees.

F.1.f. Operational Due Diligence Questionnaire (ODDQ). Respondent shall provide its standard Operational Due Diligence Questionnaire, which, at a minimum, must include the information below. If Respondent does not already have a standard Operational Due Diligence Questionnaire, Respondent shall ensure its submission includes the same information:

· Operations (portfolio implementation/trading, valuation, counterparty risk and service providers);

· Information Technology (employee access rights and controls, security practices requirements, business resumption/data center facilities requirements, and cybersecurity);

· Most recent audited financial statements from Respondent or from any sponsoring or parent corporation, if applicable. If Respondent or its sponsoring or parent corporation does not have audited financial statements, provide financial statements that were reviewed by an independent certified public accountant. (Note: The financial statements provided should not be prepared in cash basis and shall be prepared in accordance with the appropriate industry principles (e.g., Generally Accepted Accounting Principles as a set of accounting rules used in the U.S.; International Financial Reporting Standards as a set of accounting standards set by the International Accounting Standards Board; etc.) and shall include, but not be limited to, balance sheet(s), income statement(s), statement(s) of retained earnings or statement(s) of stockholders’ equity, statement(s) of cash flows, and notes to the financial statements.);

· Compliance (trading compliance, regulation, insurance coverage). During the Finalists Review Phase, Finalists will be required to provide proof of the insurance coverages provided.

ERS reserves the right to request additional ODDQ information during the evaluation process.

F.1.g. Signature Page (Appendix A). One (1) Authorized Representative shall execute the Signature Page. If more than one (1) entity will sign the Contract, each entity shall submit a separate Signature Page executed by its Authorized Representative. The signature(s) of the Authorized Representative(s) on the Signature Page(s) and all other related documents submitted by Respondent reflect Respondent’s agreement with the truth and accuracy of all statements, warranties, and representations contained in the Response and all other documents submitted by Respondent. The signature(s) further reflect Respondent’s authorization for ERS to rely on same for all purposes in connection with the RFQ process. Respondent’s executed Signature Page(s) shall be submitted with its Response. ERS will not accept Deviations to the Signature Page.

F.1.h. Investment Management Agreement (Appendix B). If Respondent is proposing Deviations to the Investment Management Agreement, it must provide Deviations in accordance with RFQ Sections G.1. – G.1.a. by the deadline specified in Euna. If Respondent does not submit proposed Deviations by the deadline specified in Euna, ERS will accept that the Respondent agrees with the provisions of the Investment Management Agreement.

F.1.i. General Information and Minimum Qualifications Questionnaire (Appendix E). Respondent shall provide a completed Appendix E.

Finalists Review Phase Deliverables

F.2. In the Finalists Review Phase, when requested by ERS, Respondent shall submit the Response deliverables listed on the Finalists Deliverables Checklist in RFQ Section J.2. and further detailed below:

F.2.a. Legal Requirements, Regulatory Compliance and References Questionnaire (Appendix F). Each Finalist will be required to submit Appendix F which includes questions about legal disclosures, standards of conduct, potential conflicts, policy violations, and placement agents/political contributions.

F.2.b. Proof of Insurance coverage provided with Respondent’s ODDQ Information (see RFQ Section F.1.f.)

A. Legal Requirements

G.1. Deviations to the Investment Management Agreement. ERS prefers that the Respondent does not deviate from the Investment Management Agreement. However, if Respondent in good faith determines that it does not agree with the provisions of the Investment Management Agreement in the form attached as Appendix B, Respondent may submit Deviations to this appendix.

G.1.a. If Deviations are submitted, they must include specific language rather than vague suggestions that certain provisions require discussion. Such specific language must be shown as redlined changes within the forms provided. Any such Deviations will be considered by ERS; however, ERS is not obligated to accept Respondent’s proposed Deviations and ERS may require that Respondent withdraw such Deviations. Vague suggestions about provisions requiring discussion and the like are not acceptable Deviations; ERS may not consider these vague suggestions and can instead treat impacted provisions as accepted in their original forms by Respondent. Deviations to the Investment Management Agreement that are not withdrawn by Respondent at ERS’ request may result in Respondent receiving a “fail” for Contractibility. However, ERS will not fail a Respondent based solely on the fact that Respondent provided Deviations to the Investment Management Agreement. If ERS chooses to accept any proposed Deviations to the Investment Management Agreement, ERS will convey that acceptance in writing to Respondent and the approved Deviations will become part of the final Contract. Respondent assumes the responsibility of identifying all Deviations and, if not accepted by ERS, all requirements of the RFQ must be fulfilled at no additional expense to ERS. ERS is not obligated to consider any Deviations to the Investment Management Agreement not submitted with Respondent’s original Response submission.

G.2. Cooperation. Respondent shall act in good faith and cooperate with ERS in the execution of the Contract. ERS specifically reserves the right to revise any or all RFQ or Contract provisions set forth at any time prior to ERS’ execution of a Contract where ERS deems it to be in the best interests of ERS, its members, and the State, subject to good faith negotiations of the parties concerning terms, fees, and the Services required.

G.3. Standards of Conduct, Ethics and Potential Conflicts. Advisor must work with ERS Investments Staff to develop and monitor an investment strategy and related policies and procedures using best practices and the highest fiduciary standards for entities of a similar type to ERS and consistent with ERS Investment Policy Statement.

G.4. Notice of Future Litigation or Bankruptcy Requirements. Advisor shall promptly notify ERS if Advisor is involved in litigation or notified of a bankruptcy filing (a) that directly involves the Services associated with the Contract; or (b) the outcome of which may have a material effect on the Services.

G.5. Information Security. Respondent shall comply with the Privacy Act of 1974 as amended by the Computer Matching and Privacy Protection Act of 1988, the Identity Theft Enforcement and Protection Act, Chapter 521, Texas Business and Commerce Code, and information security standards as outlined in Tex. Admin. Code Title 1, Part 10, ch. 202.

G.6. Terms of Use. Any Terms of Use displayed, referenced, or linked by any website, mobile application, or other technology solution used to perform, deliver, or receive the Services shall be null and void and have no force or effect as to the Services, ERS, or ERS’ employees, officers, directors, representatives, and trustees. This paragraph applies even if an ERS employee, officer, director, representative, or trustee purports to acknowledge, accept, or agree to any such Terms of Use.

G.6.a. If Advisor engages a third party to provide a website, mobile application, or other technology solution that is used to perform, deliver, or receive the Services, Advisor shall ensure its agreement with the third party limits the effectiveness of any third party Terms of Use at least to the extent specified in the preceding section.

General Information

H.1. Doing Business with ERS. General information regarding doing business with ERS may be found on ERS’ website at: http://www.ers.texas.gov/vendors.

H.2. Agent of Record. ERS shall not designate an agent of record or any other such company employee or commissioned representative to act on behalf of either ERS or Respondent. Any requests for ERS to provide such designation shall be rejected.

H.3. Vendor Performance Tracking System. In accordance with Section 2155.089 of the Tex. Gov’t Code, ERS may use the CPA’s Vendor Performance Tracking System to report vendor performance after Contract(s) are completed or otherwise terminated.

H.4. Prohibited Communications. Other than as allowed for in the RFQ or as specified by ERS, all Respondents (including potential Respondents) shall not contact ERS employees or officials regarding any aspect of the RFQ, including by telephone, email or in person, throughout the RFQ process, from the RFQ publication date until the Contract award date . This prohibition includes mass marketing emails. All communications, unless otherwise directed by ERS, must be performed in Euna or directed to: ivendorquestions@ers.texas.gov or advisorsearch@ers.texas.gov. Failure of a Respondent or its representatives to follow this process may be grounds for disqualification.

H.5. Media Releases and Inquiries. Unless required by law, Respondent is not authorized to make or participate in any media releases pertaining to the RFQ, the Contract(s), or the Services without the prior written approval of ERS, and then only in accordance with explicit written instructions from ERS. If any such release is required by law, Respondent shall first give written notice to ERS of such requirement. If contacted by the media, Respondent agrees to notify ERS in lieu of responding immediately to such media inquiries.

H.6. Ambiguities, Conflicts, or Discrepancies. Respondent must notify ERS of any ambiguity, conflict, discrepancy, exclusionary specification, omission, or other error in the RFQ via Euna by the Response deadline in Euna. Respondent submits a Response at its own risk. If Respondent fails to properly and timely notify ERS of any ambiguity, conflict, discrepancy, exclusionary specification, omission, or other error in the RFQ, Respondent, whether awarded a Contract or not: a) Waives any claim of error or ambiguity in the RFQ and any resulting Contract; b) Must not contest the interpretation by ERS of such provision(s); and c) Is not entitled to additional compensation, relief, or time by reason of ambiguity, conflict, discrepancy, exclusionary specification, omission, or other error or its later correction.

H.7. Electronic Signatures. Any electronic signature submitted for purposes of the RFQ, including any appendix thereto, shall constitute an “electronic signature” as such term is defined in Chapter 322 of the Texas Business and Commerce Code.

H.8. Retention of Responses. All Response documents and communications submitted to ERS become the sole property of ERS and will be retained in accordance with ERS’ records retention requirements.

H.9. Withdrawal of Response. A Response may be withdrawn via Euna prior to the deadline specified for Response submission. To withdraw a Response in Euna, perform the following steps:

· Log into Euna, navigate to the “Open Public Opportunities” tab, and click on the “View Opportunity” button next to the RFQ name.

· In the “Submission” section, click on the “View Receipt” button.

· In the “Need to Revise Your Submission?” section, click on the link titled “Click here to un-submit your submission”.

· After clicking the link, no further action is required.

H.9.a. A Response may be rescinded after the deadline specified for submission through formal written notice, signed by one (1) Authorized Representative, and accepted by ERS.

H.10. Amendment of Response. A Response may be amended prior to the deadline specified for Response submission.

H.10.a. A Short Form may be amended via ERS’ External Advisor Website. Contact ERS at advisorsearch@ers.texas.gov with copy to ivendorquestions@ers.texas.gov for questions related to using ERS’ External Advisor Website.

H.10.b. All other Response deliverables may be amended in Euna by performing the following steps:

· Log into Euna, navigate to the “Open Public Opportunities” tab, and click on the “View Opportunity” button next to the RFQ name and strategy.

· In the “Submission” section, click on the “View Receipt” button.

· In the “Need to Revise Your Submission?” section, click on the link titled “Click here to un-submit your submission.”

· In the “Step 1: Provide Submission Information” section, update the submitted information and documents as needed.

· In the “Step 2: Submit & Finalize” section, check the box and click the “Submit & Finalize My Submission” button.

H.10.c. Responses may not be amended after the deadline specified.

H.11. Costs Incurred for Participation in RFQ Process. ERS will not pay any costs incurred by Respondent for preparation of its Response or for participating in the RFQ process outlined herein.

H.13. Disclaimer and Terms of Use Language. Any disclaimer or terms of use language within Respondent’s Response, including any documentation provided by Respondent, shall be null and void and have no force or effect on ERS and ERS’ personnel as if such language did not exist. This includes, but is not limited to, notice of copyrights.

H.14. Public Information Act. ERS is required to provide access to certain records in accordance with the PIA and may be required by law to release information that Respondent considers confidential and/or proprietary.

H.14.a. Until a Contract is executed, ERS may seek to protect from disclosure any information submitted in response to this RFQ.

H.14.b. Upon execution of a Contract, ERS will consider all information, documentation, and other materials submitted in response to this RFQ to be of a non-confidential and non-proprietary nature and, therefore, subject to public disclosure under the PIA. However, ERS will advise Respondent of any request for public information that implicates its materials so that Respondent will have the opportunity to raise any objections to disclosure to the Texas Attorney General, who will decide whether Respondent’s objections have merit. ERS will consider the Investment Management Agreement (Appendix B) and the RFQ to be subject to public disclosure and there will be no opportunity to object to their disclosure. Respondent shall not include any confidential and/or proprietary information in the Investment Management Agreement.

H.14.c. To the extent Respondent’s Response contains Intangible Property, Respondent acknowledges that such Intangible Property may be disclosed, publicly displayed, published, reproduced, and distributed by ERS pursuant to the PIA, or as otherwise required by law. Respondent warrants and represents that it owns, or has obtained all necessary permissions with respect to the use of, the Intangible Property and by submitting its Response grants ERS an irrevocable, perpetual, nonexclusive, royalty-free license to display, publish, reproduce, distribute, and otherwise use the Intangible Property for the purposes of evaluating Respondent’s Response and complying with applicable laws. Respondent shall indemnify and hold harmless ERS, its trustees, officers, directors, employees, and contractors, as well as any trust managed by ERS, from and against any claim of infringement of the Intangible Property resulting from ERS’ use of the Intangible Property as set forth herein.

H.14.d. To the extent required by law, ERS shall submit a copy of the public portions of the Contract including all public appendices and attachments, to LBB’s contract database. This means the public portions of the Contract may be publicly available on the LBB website in the future.

H.14.e. ERS shall release Respondent’s information, including information that Respondent considers confidential or proprietary, upon request from the Texas Legislature when requested for legislative purposes, as provided for in the PIA, or to any other person or entity as otherwise required by law.

H.14.f. The following information is not subject to public disclosure under the PIA: date of birth, driver’s license number, license plate number, credit card number, insurance policy number, bank account number, bank routing number, and social security number.

H.15. Historically Underutilized Businesses. In accordance with governing Texas state law (including the current emergency rules), ERS makes a good faith effort to assist HUBs (otherwise referred to as VetHUBs) in receiving ERS’ contract awards and expects the Advisor to make a good faith effort to use HUBs as subcontractors when subcontractors are used by the Advisor.

H.15.a. ERS has determined subcontracting opportunities are not probable, pursuant to Section 2161.252 of the Texas Government Code.

H.15.b. HSP Prime Contractor Progress Assessment Report. When applicable, all HUB and non-HUB subcontractor information shall be reported to ERS using the HSP Prime Contractor Progress Assessment Report form. The report shall be submitted monthly to ERS’ Purchasing Section at hub@ers.texas.gov even during months when no invoice is submitted to ERS. All payments made to subcontractors shall be reported. ERS may verify the amounts being reported as paid by requesting copies of cancelled checks paid to subcontractors.

H.16. Emerging Managers. Sections 815.301 (g), (h) and (i) of the Tex. Gov’t Code require ERS to make a good faith effort to acquire financial services from emerging managers. Emerging managers are defined in the statute as private professional investment managers with less than $2 billion in assets who provide pension fund management, consulting, investment advising, brokerage services, hedge fund management, private equity management, and real estate investment.

H.17. ERS Background. ERS is a trust fund established by the Texas Constitution and is described in Article XVI, Section 67, Texas Constitution. ERS is also organized pursuant to Subtitle B, Title 8 of the Tex. Gov’t Code, as well as Title 34 of the Tex. Admin. Code, Sections 61.1, et seq. ERS administers defined benefit pension plans for State employees, law enforcement and custodial officers, elected State officials and judges. ERS invests State and member contributions in the retirement trust funds and administers the trust funds with a fiduciary obligation to the members and retirees of ERS who are its beneficiaries. ERS also administers the Texas Employees Group Benefits Program, which consists of health benefits, life insurance and other optional benefits to participating individuals eligible to receive those benefits under applicable law.

H.17.a. Board. ERS’ six-member Board is the trustee for trust funds maintained and administered by the retirement system. The Board is responsible for administering the retirement system and investing the funds of the retirement system in such securities for investment decisions pursuant to Section 815.103 of the Tex. Gov’t Code.

H.17.a.i. The Board may establish advisory committees as it considers necessary to assist it in performing its duties pursuant to Section 815.509 of the Tex. Gov’t Code and Rule 63.17(b) of the Tex. Admin. Code. The Board appoints investment professionals to an Investment Advisory Committee, which was created to consult with and advise the Board on investments and investment-related issues.

H.17.b. Investment Program Objective. The overall objective of the investment program is to prudently invest in securities in order to maximize the probability that members, retirees, and beneficiaries are provided the benefits they have been promised at a reasonable and predictable cost.

H.18. Consulting Services. ERS currently uses its investment consultant to provide general investment consulting services, including advising for public equity asset class. ERS’ investment consultant may contact Respondents to obtain additional information about Respondent’s firm/strategy. Information obtained by ERS’ investment consultant will not be used in the scoring of Respondent’s Response.

H.19. Reserved Rights. ERS retains the right to enter into negotiations with any Respondent on any portion of its Response. ERS also retains the right to select the Response(s) of the Respondent(s) that offer the best value to ERS, its members, and the State. In its selection, ERS shall take into consideration the criteria specifically described in RFQ Section E, Evaluation Process. ERS reserves the right to repeat the selection process described in RFQ Section A.1.a. based on the current and/or anticipated needs of the public equity asset class. ERS may conduct the review in RFQ Sections E.1. – E.5. as needed as long as the RFQ remains open.

H.20. Rebids. ERS reserves the right to rebid the RFQ if ERS deems a rebid to be in the best interests of ERS, its members, and the State. ERS is under no legal requirement to execute a Contract on the basis of the RFQ and makes no guarantee that an award will be made as a result of the RFQ.

H.21. Waivers. ERS reserves the right to waive any immaterial deviation or defect in a Response. ERS’ waiver of a defect shall in no way modify the RFQ or excuse Respondent from full compliance with the RFQ requirements.

Definitions

ACIC: The Asset Class Investment Committee is an internal ERS committee and includes the Executive Director, the Chief Investment Officer, one (1) member of the Investment Advisory Committee, and one (1) senior investment staff member.

Advisor: Any Finalist selected for placement into the Select Pool and to provide the Services as a result of the RFQ.

AUM: Assets Under Management

Authorized Representative: Any person in Respondent’s organization who is authorized to bind the organization.

Board: The Board of Trustees for the Employees Retirement System of Texas.

Clarifications: Clarifications consist of follow-up or clarification questions posed by ERS as well as Respondent’s responses to those questions. Clarification questions do not include the opportunity to cure substantive defects in Responses. Responses to clarification questions will be incorporated into the review process and may affect the relevant scores and/or be incorporated into the Contract, as applicable. Mutually agreed Clarifications of the RFQ terms and conditions may be attached to or incorporated into the executed Contract. While ERS reserves the right to ask Clarifications during any evaluation phase, Respondents who fail to provide complete information within their Responses risk being disqualified or scoring too low to be considered a Finalist or being awarded a Contract.

Contract: The Investment Management Agreement and all of the exhibits attached thereto.

Contract Term: The Contract Term will begin on the date specified in the Contract and will continue and can be terminated as provided for in the Contract.

Contractibility: The degree to which ERS finds Respondent a viable Advisor, specifically in terms of the Contract. Refer to RFQ Section E.2.a.ii. for more details.

CPA: The Texas Comptroller of Public Accounts.

CT: Central Time.

Deviation: A proposed deviation from a requirement, which is only permitted in the Investment Management Agreement (Appendix B).

Due Diligence Review Phase: The phase in which ERS evaluates Responses from all Respondents.

ERS: The Employees Retirement System of Texas.

ERS Investment Policy Statement: A document that provides guidance to fiduciaries responsible for investment decisions for the Trust and is located at the following link: https://www.ers.texas.gov/About-ERS/ERS-Investments-overview/Investments-Division/ERS-Investment-Policy.pdf.

ERS Investments Staff: Investments staff employed by ERS.

ESBD: The CPA’s Electronic State Business Daily. ESBD is the electronic marketplace where notices of State bid opportunities over $25,000 are posted.

Euna or Euna Procurement: ERS’ e-procurement portal located at erstexas.bonfirehub.com.

eVestment: Company that provides investors with institutional investment data and analytics.

External Advisor Team: ERS’ staff on the public equity team that evaluate and monitor external advisors.

External Advisor Website: ERS’ portal located at https://advisorsearch.ers.texas.gov where Respondents shall submit Short Forms.

Finalists: The top-ranked Respondents based on the results from the Due Diligence Review Phase.

Finalists Review Phase: The phase in which top-ranked Respondents from the Due Diligence Review Phase are reviewed further and based on this review, ERS will recommend Finalist(s) to the ACIC who will review the recommendations and approve the Finalist(s) who will be placed into the Select Pool.

HSP: A Historically Underutilized Business Subcontracting Plan, as the term is used in Tex. Gov’t Code, Chapter 2161.

HUB: A historically underutilized business, as defined in Tex. Gov’t Code, Chapter 2161.

IDDQ: Respondent’s Investment Due Diligence Questionnaire which should rely on a generally accepted industry format. If Respondent does not have an IDDQ, it shall provide a document with the requested information in RFQ Section F.1.b.

Initial Review Phase: The phase in which ERS evaluates firms for Minimum Qualifications and uses relevant eVestment data to evaluate criteria in RFQ Sections E.1.a. and E.1.b.

Intangible Property: Patents, trademarks, copyrights, and other intellectual property embodied in Respondent’s Response.

Investment Management Agreement: The document attached to the RFQ as Appendix B.

LBB: The State’s Legislative Budget Board.

Minimum Qualifications: ERS’ requirements that Respondent must meet, as set forth in RFQ Section D.1.

ODDQ: Respondent’s Operational Due Diligence Questionnaire which should rely on a generally accepted industry format. If Respondent does not have an ODDQ, it shall provide a document with the requested information in RFQ Section F.1.f.

PIA: Texas Public Information Act, Chapter 552 of the Tex. Gov’t Code.

Respondent: Any person or entity submitting a Response to the RFQ.