Ohio Public Employees Retirement System

Request for Proposal (RFP)

For:(1) Total Fund Multi-Asset Class Risk Management System and (2) Hedge Fund Risk Management System

Date:November 9, 2015

Project Name:Risk System Search 2015

TIMELINEOPERS Issues RFP November 9, 2015 Deadline for Written Questions to OPERS November 16, 2015Responses to Written Questions by OPERS November 23, 2015Final Filing Date to OPERS December 16, 2015Presentations & Selection of Finalists January, 2016Selection of Service Providers February, 2016

277 East Town StreetColumbus, Ohio 432151-800-222-PERS (7377)

www.opers.org

TABLE OF CONTENTSA. BACKGROUND........................................................................................................................3

1. OPERS Retirement Board....................................................................................................32. Financial Information............................................................................................................3

B. OVERVIEW...............................................................................................................................3C. SCOPE OF ENGAGEMENT.....................................................................................................3D. PROPOSAL CONTENT............................................................................................................3

1. Cover Letter..........................................................................................................................42. Attachments..........................................................................................................................43. Questionnaire.......................................................................................................................44. Understanding of Engagement.............................................................................................55. Work Plan (including timeline with details of hours).............................................................56. Vendor Personnel.................................................................................................................57. Cost......................................................................................................................................58. Sample contract....................................................................................................................69. Additional Information...........................................................................................................6

E. SELECTION CRITERIA............................................................................................................6F. GENERAL TERMS AND CONDITIONS FOR SUBMITTING PROPOSALS...........................7G. INSTRUCTIONS FOR SUBMITTING PROPOSALS................................................................7

ATTACHMENT A..............................................................................................................................91. CONTRACTOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS...................92. DISCLOSURE AND USE OF RECORDS............................................................................93. ADVERTISING AND PUBLICITY.........................................................................................94. INDEMNIFICATION AND LEGAL ACTION..........................................................................95. GOVERNING LAW AND FORUM......................................................................................106. REPORTING......................................................................................................................107. ASSIGNMENTS.................................................................................................................108. OWNERSHIP.....................................................................................................................109. COMPENSATION AND RECORDKEEPING.....................................................................1010. RELATIONSHIP OF THE PARTIES..............................................................................1011. LIMITATION OF LIABILITY...........................................................................................1112. SUBCONTRACTORS...................................................................................................11

ATTACHMENT B – QUALIFICATION AND CERTIFICATION......................................................12ATTACHMENT C – PROPOSAL QUESTIONNAIRE.....................................................................13

A. Firm / Organizational Proposal............................................................................................13B. System and Service Proposal..............................................................................................15C. Implementation and Technology.........................................................................................17D. Fee Structure and Costs.......................................................................................................18E. Client Service and Training..................................................................................................18F. Hedge Fund Risk System.....................................................................................................19ATTACHMENT D – SECURITIES HOLDINGS AND BENCHMARK...........................................21

Ohio Public Employee Retirement SystemRequest for Proposal – Risk System

A. BACKGROUND1. OPERS Retirement Board

In 1935, the Ohio Public Employees Retirement System (OPERS) began a tradition of providing excellent retirement benefits for state employees. With approximately $90 billion in assets, the System provides retirement, disability, and survivor benefit programs for public employees throughout the state who are not covered by another state or local retirement system. OPERS serves more than 1,048,000 members of approximately 3700 public employers and over 205,000 retirees and surviving beneficiaries who receive monthly benefits.

2. Financial InformationThe most recent OPERS Comprehensive Annual Financial Report is available on the OPERS website at:https://www.opers.org/pubs-archive/investments/cafr/2014CAFR.pdf

B. OVERVIEW OPERS plan assets are diversified across various asset classes. Details of investment programs including strategies and resources can be found in OPERS 2015 Annual Investment Plan available on the OPERS website at https://www.opers.org/pubs-archive/investments/inv-plan/2015_Investment_Plan.pdf. The Investment Policies for the Defined Benefit Fund, Health Care Funds (401(h) and 115 Trust), and Defined Contribution Fund are also available on the OPERS website at https://www.opers.org/investments/inv-policies.shtml.

This search is for a Total Fund Multi-Asset Class and/or a Hedge Fund Risk Management System. MSCI is current service provider for both multi-asset class and hedge fund risk management system. OPERS currently utilizes holdings-based risk models from MSCIBarra and Barclays Capital for portfolio management and risk management purposes within the Global Equity and Fixed Income asset classes. The custodians for OPERS are Fifth Third Bank (for U.S. assets) and State Street Bank (for non-U.S. assets). Bank of New York Mellon is the plan/fund accounting vendor. OPERS uses the Eagle PACE/STAR as the data warehouse/accounting system.

C. SCOPE OF ENGAGEMENTOPERS is seeking proposals from Prospective Vendors to provide: (1) holdings-based Total Fund risk management services/system; and/or (2) holdings-based or risk factor-based Hedge Fund risk management services/system. Prospective Vendors may submit proposals with respect to (1), (2) or both. If your organization has more than one product offering that your feel is applicable, please submit complete responses for each product.

D. PROPOSAL CONTENTAt a minimum, the proposal must include the following information. For ease of review, each requirement should be addressed in a separate section preceded by an index tab to identify the subject of the section. The proposal should be formatted on consecutively numbered pages and include a table of contents.

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Ohio Public Employee Retirement SystemRequest for Proposal – Risk System

1. Cover LetterThe Vendor must include a cover letter, which will be considered an integral part of the proposal, in the form of a standard business letter, and must be signed by an individual who is authorized to bind the vendor contractually. It must include:

1.1 A statement regarding the Vendor’s legal structure (e.g. an Ohio corporation), Federal tax identification number, and principal place of business.

1.2 Vendor’s primary contact on this RFP, who has authority to answer questions regarding the proposal:

1.2.1 Firm Name1.2.2 Contact’s Name1.2.3 Additional Contacts1.2.4 Contact’s Address1.2.5 Contact’s Phone and Facsimile Numbers1.2.6 Contact’s E-mail Address

1.3 A statement that the Vendor’s proposal meets all the requirements of this RFP.1.4 A statement that the Vendor has not submitted its proposal with the assumption that

there will be an opportunity to negotiate any aspect of the proposal. 1.5 A statement that the Vendor acknowledges that all documents submitted pursuant to

this request may be subject to disclosure under Ohio’s Public Records Act, see Section F(1) of this RFP.

1.6 A statement that the Vendor acknowledges and agrees that the contract provisions contained in Attachment A shall be included in any contract with OPERS that may result from this RFP, and such contract provisions shall control in the event of any conflict.

2. Attachments2.1 Vendor shall complete and execute the Qualification and Certification attached

hereto as Attachment B in its entirety.2.2 Vendor shall respond to the questions set forth in Attachment C in their entirety, as

applicable to the services for which Respondent is submitting its proposal. 3. Questionnaire

Please provide the following information:3.1 Vendor’s domestic office locations, identifying which location will be assigned this

project.3.2 Vendor’s organizational structure, including subsidiary and affiliated companies, and

joint venture relationships.3.3 How many years has Vendor been in business?3.4 Yes/No: Has Vendor undergone any material change in its structure or ownership

within the last 18 months? If yes, please describe.3.5 Yes/No: Is any material change in ownership or structure currently under review or

being contemplated? If yes, please describe.3.6 If available, please provide a report, study, or assessment of your company,

prepared by an unbiased independent third-party source, concerning client satisfaction and measures of your firm’s strengths and weaknesses vis-à-vis your key competitors.

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Ohio Public Employee Retirement SystemRequest for Proposal – Risk System

3.7 Please provide your most recent financial statements including a statement of financial position, an annual income statement and balance sheet.

3.8 Please describe any material litigation to which your company is currently a party. In addition, please describe any material litigation that your company has been involved in over the last 3 years.

3.9 Please provide a list and describe litigation brought or threatened against your company by existing or former clients over the past 5 years.

3.10Please describe any relationships that your company has with potential vendors to OPERS, including any potential fees or other remuneration your company may receive for recommending their products or services.

4. Understanding of Engagement 4.1 Please describe in detail your organization’s understanding of the services

requested in this RFP by OPERS and describe the procedures and methods that will be used to provide the desired service.

4.2 Please describe areas or processes not included in this RFP that your company may examine in order to provide more complete services.

4.3 Please provide a narrative that supports why your company believes that it is qualified to undertake the proposed engagement.

5. Work Plan (including timeline with details of hours)The proposal should set forth a work plan including:5.1 A description of how the Vendor will consult with and make presentations to staff

during the engagement.5.2 A description of the service management and quality control procedures to be

utilized. These should identify and describe any anticipated potential problems, the Vendor’s approach to resolving these problems, and any special assistance that will be requested from OPERS.

5.3 Vendor should allow ample time to review all existing documentation pertaining to the services.

6. Vendor Personnel6.1 For each individual that you propose to assign to this engagement, please provide a

narrative with the following information:6.1.1 Employee name and title.6.1.2 Proposed position on this engagement (manager, supervisor, officer, etc.).6.1.3 The month and year that the employee began working for your organization.6.1.4 Employee work history.

6.2 Vendor is requested to perform all services and may not subcontract without the written consent of OPERS. For each of the Vendor’s potential subcontractors, please provide a narrative with the following information:

6.2.1 The subcontractor’s (firm) name and address.6.2.2 A brief description of the work said subcontractors might perform.

6.3 Please describe your firm’s procedures in the event that a contact person assigned to this engagement leaves your firm during the term of the engagement.

7. Cost7.1 Please provide a not-to-exceed, fixed fee price quote for this project showing the fee

for the project in total to include any and all reimbursable expenses.

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Ohio Public Employee Retirement SystemRequest for Proposal – Risk System

7.2 Provide cost per hour for additional service work or if hourly costs are not applicable, the deliverables that Vendor intends to provide, and the cost associated with each deliverable.

7.3 State whether Vendor will negotiate its proposed fee if OPERS decides negotiation is appropriate as to any aspect of the proposals, including the fee, with the finalist(s). In no case, however, will the negotiated fee be higher than the fee submitted in the proposal.

8. Sample contractPlease provide a sample contract with your proposal for consideration if you are selected for this engagement, along with a copy of your certificate of insurance. The contract should reflect the specific scope and deliverables of this engagement as well as hourly fees for any potential work outside the scope of this engagement and response times.

Notwithstanding the foregoing, any contract that may result from this RFP must include the contract provisions included in Attachment A, which provisions shall control in the event of any conflict.

9. Additional InformationThe Vendor should provide any other information it believes relevant to the engagement.

E. SELECTION CRITERIAProposals will be evaluated, and OPERS will make any final decision to award the contract.

During the evaluation process, the OPERS management may, at its discretion, request any or all vendors to make oral presentations. Such presentations will provide Vendors with an opportunity to answer questions regarding the Vendor’s proposal. Not all Vendors may be asked to make such oral presentations.

Proposals will be evaluated based on the following criteria, (each criteria may be weighted, if desired):

1. Understanding of the project.2. Soundness of the approach and quality of the work plan.3. Vendor qualifications.4. Individual qualifications of the assigned staff.5. Proposed deliverables.6. Cost.

After evaluation of the proposals, OPERS may determine a list of finalists not to exceed three (3) and may commence sequential negotiations on any aspects of the proposals OPERS deems appropriate beginning with the highest scoring finalist. If OPERS does not reach agreement with the highest scoring finalist within seven (7) calendar days, or if in the opinion of OPERS negotiations reach an impasse, OPERS may decide not to award the contract or may begin negotiations with the second highest scoring finalist. OPERS may choose to continue such negotiation schedule with subsequent finalists on the same basis until a contract is negotiated, no other finalists remain, or OPERS decides not to award the contract.

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Ohio Public Employee Retirement SystemRequest for Proposal – Risk System

F. GENERAL TERMS AND CONDITIONS FOR SUBMITTING PROPOSALS1. Vendor acknowledges that OPERS is subject to the Ohio Public Records Act, and the

documents submitted pursuant to this RFP may be subject to a public records request. Accordingly, Vendor must identify any material or documents that are confidential and clearly mark those items or documents at the time of submittal. If a request for records is made that includes information Vendor has identified as confidential, OPERS will make reasonable efforts to contact Vendor in sufficient time to allow Vendor to take appropriate legal steps to protect the confidential information from disclosure. If as a result of the position taken by Vendor regarding the confidentiality of the information OPERS is assessed any damages or fees, Vendor shall indemnify OPERS for such damages or fees. If no documents or materials are identified and marked by Vendor as confidential, Vendor will be deemed to have consented to the release of the document or material, and to have waived any cause of action against OPERS resulting from the release of the documents or materials.

2. Regardless of cause, late proposals, in whole or in part, will not be accepted and will automatically be disqualified from further consideration. It shall be the Vendor’s sole risk to ensure delivery at the designated office by the designated time. Late proposals will not be opened and may be returned to the Vendor at the expense of the Vendor, or destroyed if so requested.

3. OPERS reserves the right, in its sole discretion, to reject any or all proposals submitted, and to waive as to any vendor or as to all vendors, any informality or irregularity in a proposal or proposals or any failure to conform to the instructions in this RFP.

4. This Request for Proposal is not a contract, not meant to serve as a contract, and does not constitute a promise to enter into a contract.

5. All documents, proposals and other materials submitted in response to this RFP will become the property of OPERS and will not be returned to Vendor.

6. Vendor agrees to comply with all terms, conditions and requirements described in the RFP. Any failure by any responding Vendor to so comply shall be grounds for rejection of that Vendor’s proposal, as determined by OPERS in its sole discretion.

7. If a contract results from this RFP, neither the successful responding Vendor, nor anyone on its behalf (including its agents, affiliates, subcontractors and/or vendors), shall publish, distribute or otherwise disseminate any press release, advertising and/or publicity matter of any type or kind (collectively “advertising material”) having any reference to OPERS, this RFP or the resulting contract, unless and until such advertising material first shall have been submitted to and approved in writing by OPERS.

G. INSTRUCTIONS FOR SUBMITTING PROPOSALS 1. Please provide 3 (this number should include one extra redacted copy for public

record requests) hard copies and 2 (this number should include one extra redacted copy for public record requests) electronic copy of your proposal by 5:00 p.m. Eastern Standard Time, on December 16, 2015 to:

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Ohio Public Employee Retirement SystemRequest for Proposal – Risk System

Attn: Jay YohoOhio Public Employees Retirement System277 East Town StreetColumbus, OH 43215-4642risksystem2015@opers.org

When submitting proposals, please note the requirement for submission of fee information, please note the requirements contained in Attachment C, Section E.

2. Questions concerning this Request for Proposal must be submitted in writing or via e-mail to risksystem2015@opers.org.

3. No Vendor shall attempt to communicate with OPERS concerning this RFP in any manner or at any time other than during the question and answer period, or the finalist presentations, if held (see section E). Communication with OPERS, other than as previously described, will result in immediate disqualification.

4. This Request for Proposal is issued on November 9, 2015. OPERS reserves the right, in its sole discretion, to amend or cancel this RFP.

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ATTACHMENT A

1. CONTRACTOR’S REPRESENTATIONS, WARRANTIES AND COVENANTSContractor represents, warrants and covenants that:

it has the authority to enter into the Agreement and perform the services provided under the Agreement;

it shall comply with all applicable federal, state and local laws in providing services under the Agreement, including, but not limited to, the reporting requirements contained in Sections 101.90 et seq. of the Ohio Revised Code (Joint Legislative Ethics Commission), and the laws contained in Chapter 102 of the Ohio Revised Code (Ohio Ethics Commission) governing ethical behavior that apply to persons doing or seeking to do business with OPERS; and,

it has not paid and will not pay, has not given and will not give, any remuneration or thing of value directly or indirectly to OPERS or to any of its board members, officers, employees, or agents, or any other third party related to Contractor’s engagement under the Agreement, including a finder’s fee, cash solicitation fee, or a fee for consulting, lobbying or similar services that could influence OPERS’ decision to enter into the Agreement.

2. DISCLOSURE AND USE OF RECORDSContractor shall not disclose or use any information concerning OPERS’ members or retirees, or any other confidential information obtained in providing services under the Agreement, without OPERS’ prior written consent. Contractor understands that OPERS is subject to the Ohio Public Records Act. If OPERS receives a public records request for records related to the Agreement, OPERS will reasonably attempt to contact Contractor in sufficient time to allow Contractor to take the legal steps it deems necessary to protect the confidential information from disclosure. Contractor shall indemnify OPERS if OPERS is assessed any damages or fees as a result of the position Contractor asserts regarding the confidentiality or public disclosure of the records.

3. ADVERTISING AND PUBLICITYNeither Contractor, nor anyone on Contractor’s behalf (including any or all of its agents, affiliates, subcontractors or vendors), shall publish, distribute or otherwise disseminate any press release, advertising or publicity matter of any type or kind (collectively “Advertising Material”) having any reference to OPERS or this Agreement, unless and until the Advertising Material is first submitted to and approved in writing by OPERS.

4. INDEMNIFICATION AND LEGAL ACTION Contractor shall indemnify OPERS, its board members, officers, and employees

against any claims, damages, costs or losses resulting from Contractor’s negligent or intentional acts, or those of its officers, employees or agents, under the Agreement (“Indemnity Claims”). Contractor shall defend OPERS, its board members, officers and employees against Indemnity Claims, if OPERS requests that Contractor do so. OPERS will not be required to file a lawsuit to obtain reimbursement for the Indemnity Claims.

OPERS shall not indemnify Contractor for claims, damages, costs or losses of any nature that arise under the Agreement (“Contractor’s Claims”). Contractor

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may seek recovery of Contractor’s Claims through legal action against OPERS, if appropriate.

5. GOVERNING LAW AND FORUMDespite anything to the contrary in the Agreement, issues concerning the Agreement will be governed by, construed and enforced according to Ohio law, exclusive of Ohio’s conflict of laws principles. Any litigation concerning the Agreement must be brought only in courts of competent jurisdiction located in Franklin County, Ohio, and Contractor irrevocably consents to this venue and jurisdiction. OPERS shall not waive its right to trial by jury in any action, proceeding or counterclaim concerning the Agreement or the actions of either party regarding any aspect of the Agreement, regardless of the legal theory, unless the Ohio Attorney General consents to this waiver.

6. REPORTINGDuring the term of the Agreement, Contractor shall report any significant changes in Contractor’s organizational structure and/or staffing to OPERS in a timely manner.

7. ASSIGNMENTSDuring the term of the Agreement, Contractor shall make no changes in the assigned consultant team without the express prior written approval of OPERS.

8. OWNERSHIPOPERS shall have full ownership, including copyright interests, in all, documentations and other related work projects created in connection with the engagement contemplated with the Agreement, as applicable. Contractor will ensure that the Contractor’s subcontractors shall be obligated to assign to OPERS their ownership rights in any deliverables.

9. COMPENSATION AND RECORDKEEPINGOPERS shall pay Contractor for its services as specified in the Agreement, and may agree to reimburse Contractor for actual travel expenses incurred while performing its services, to the extent permitted under the OPERS Travel and Expense Policy. During the term of the Agreement, and for a period of three (3) years after OPERS makes final payment, Contractor will maintain financial records related to its services provided under the Agreement following generally accepted accounting procedures. Upon OPERS' request, Contractor shall produce or make available for inspection any and all records maintained under the Agreement.

10. RELATIONSHIP OF THE PARTIESContractor is an independent contractor under the Agreement. Nothing in the Agreement may be construed as authorizing either party to act for the other party, or to perform or discharge any liability or obligation of the other party, whether financial, regulatory or contractual, or to assume any responsibility for the conduct of the business or operations of the other party. Each party has the sole and exclusive control over and responsibility for its agents and employees, and all related expenses.

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11. LIMITATION OF LIABILITYOPERS shall not be liable to Contractor for any incidental, indirect, consequential, special or punitive damages, including loss of profits, regardless of the legal theory of the liability, even if OPERS knew or should have known of the possibility of these damages.

12. SUBCONTRACTORSContractor may not subcontract any of its obligations under the Agreement without OPERS’ prior written consent. Contractor shall remain liable for the performance of the services whether it performs the services directly or through a subcontractor.

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ATTACHMENT B – QUALIFICATION AND CERTIFICATIONOHIO PUBLIC EMPLOYEES RETIREMENT SYSTEM

Investment Risk System 2015 Request for Proposals

___________________________________________Respondent Firm Name

By signing below, Respondent hereby certifies that the following information and representations are true, complete, and accurate to the best of Respondent’s knowledge and belief, and that it will comply with the obligations contained herein: 1) Respondent has been in existence for at least three years and has senior members of the firm

with at least five (5) years consulting experience servicing institutional clients.2) Respondent agrees to act as a fiduciary within the meaning of applicable Ohio law (including

Chapter 145 of Ohio Revised Code).3) Neither Respondent, nor any of its personnel or representatives, conferred with any other

persons or organizations submitting information regarding the search in progress.4) Respondent has read the complete materials and agrees to the terms and requirements upon

which this Request for Proposal is conditioned, and its proposal meets all the requirements in this Request for Proposal.

5) Respondent maintains errors and omissions insurance as well as fiduciary liability insurance providing a prudent amount of coverage for negligent acts or omissions and that such coverage will be applicable to Respondent’s actions under any agreement resulting from this Request for Proposal. Respondent further agrees to show proof of insurance prior to execution of a contract, and will demonstrate at least one million dollars ($1,000,000.00) of insurance covering acts of fraud or dishonesty as required under Ohio Revised Code 145.113(E) sufficient to assure OPERS of its accuracy.

6) Respondent will not delegate its fiduciary responsibilities assumed under the agreement.

Repondent Information (to be completed by Respondent):

1. Firm Name 2. Telephone Number ( )Fax: ( )

3. E-mail address

5. Address

Indicate primary contact person, if different from individual signing this certification sheet:6. Name and Title 7. Telephone Number 8. E-mail Address

9. Prospective Consultant Name (Print) 10. Title

In Witness Whereof, Respondent hereby certifies that the foregoing information and representations are true, complete, and accurate to the best of Respondent’s knowledge and belief, and agrees to comply with the obligations contained herein:

Respondent:

______________________________

By: ___________________________ Title:___________________________Name:_________________________ Date: __________________________

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ATTACHMENT C – PROPOSAL QUESTIONNAIRE

OHIO PUBLIC EMPLOYEES RETIREMENT SYSTEM

Investment Risk System 2015Request for Proposals

A. Firm / Organizational Proposal

1. Please complete the following table, and provide a brief history of the firm:

Firm ProposalCountry and state of incorporationDate firm foundedPrincipal place of businessNumber of employees

2. Please detail the ownership structure of the firm:

OwnershipForm of organization (corporation, partnership, LLC, etc.)Ownership % of each principal (list names)

3. Please provide a current organizational chart of your firm.

4. Please describe:a) Any material developments in your organization (changes in ownership, personnel, business,

etc.) over the past three years in detail;b) Any joint ventures or affiliations including any ownership the firm or any entity under its control;c) Any planned changes in terms of ownership structure, resources or staffing; andd) Your firm’s overall business plan for both total firm and this particular product over the next three

years.

5. Please disclose and describe:a) Any preferred vendor or business partner relationship you have with data service providers or

hardware/software vendors; andb) Any investigation or litigation involving the firm or any of its principals during the last five years,

including the nature of the litigation, the parties and the status of the litigation.

6. Provide the location and function of each of your firm’s offices and the location(s) of the management of this particular service and system.

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7. Please provide an organizational chart that shows the persons who would be involved in proposed system/service.

8. Using the table below list key professionals directly involved with the proposed system and service. In addition, please provide a professional biography for each of the key professionals on the proposed system and service.

9. Please list all professionals associated with your proposed system and service that joined the firm in the past five years.

Professionals - JoinedDate

JoinedTitle/Job Function

Products

10. Please list all professionals associated with your proposed system and service that left the firm in the past five years. Please include departures, regardless of seniority.

Professionals - Departures

Date Left

Title/Job Function

Years

with Firm

Products

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Key Research and Risk Professionals

NameTitleResponsibilitiesYears of investment experienceYears with FirmYears on proposed system and serviceLocationPercentage of time spent on proposed system and serviceDegree/ Designation

11. Please provide a list of your current clients, classified by type or organization (pensions, hedge funds, etc.)

12. Please state whether any of the firm’s research and risk professionals have other business responsibilities outside of their employment with the firm and, if applicable, describe the other business responsibilities.

13. If employees have equity ownership, please describe how such ownership is determined and distributed including, but not limited to, vesting provisions and distribution if they leave.

14. Please list the five largest clients currently licensed for the proposed product.

15. For the product the firm proposes, please list the accounts gained and lost over the past five years and the reasons for any lost accounts.

16. Provide the client name, address, telephone number, contact name, title and account type (e.g. defined benefit, defined contribution, endowment) of three accounts who subscribed to the subject product that can be contacted as references. Also indicate the length of your relationship and assets under management for each reference.

17. Identify three clients that have terminated accounts in the proposed product over the past three years that can be contacted as references. Provide the firm name, contact person and title, telephone number, product name and reason for termination.

18. Please provide a copy of your company’s annual report and audited financial statements for the past three years. If unavailable, please explain why.

B. System and Service Proposal

1. Please state your firm’s philosophy for managing and monitoring investment risk.

2. Please summarize the methodology of your risk management system. Please describe the development, rationale and methodology of the model.

3. Provide a brief history of the development of your firm’s risk management system.

4. Provide an overview of the workflows for the proposed product.

5. Please describe the internal resources (staffing, technology, etc) OPERS will need to fully utilize your system on an ongoing basis.

6. What are the key factors that differentiate this product and give it a competitive advantage over others in the marketplace?

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7. Please describe your system’s equity risk model if you have one. How many risk factors are in the model (fundamental factors, macro factors and statistical factors)? Please highlight the latest risk model’s improvements from the earlier version. You may attach key research papers written by the firm’s staff explaining the development, rationale and methodology of the model.

8. Please preview your system’s next generation equity risk model. Please highlight the most important enhancement goals and objectives.

9. Please describe your system’s fixed income risk model if you have one. Please highlight the latest risk models improvements from the earlier version.

10. Please preview your system’s next generation fixed income risk model. Please highlight the most important enhancement goals and objectives.

11. Does your system support multi-asset class risk modeling based on holdings data?

12. Please describe the past experience of your firm’s working relationship with hedge funds or their administrators to set up and maintain a data feed to support your risk system and reports.

13. What data is necessary to fully utilize your risk system?

14. What data providers do you use for setting up a security master? How do you handle securities not modeled by those providers?

15. What risk metrics are included in your reports? Please list all the metrics your system calculates. Describe the level at which those risk metrics are calculated (i.e. total fund level, asset class, investment manger and security level).

16. How many different methods are available to measure Value at Risk (VAR)? Are some methods available at additional costs? (examples are parametric, historical and Monte Carlo simulation)

17. Please describe how your system handles the non-normal (fat-tailed) distribution of security returns and non-linear payoff (e.g. options) instruments.

18. Describe your system’s scenario analysis and stress testing capabilities. Are those tests customizable by OPERS Staff?

19. Please describe whether your system can integrate risk models or calculation engines from external sources.

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20. Describe your system’s treatment of OTC derivatives, such as interest swaps, equity total return index swaps, options, currency forwards, commodity swap contracts, single security swaps, custom swaps and basket swapsIs your hedge fund risk system based on underlying holdings, exposures, returns, or some combination of these inputs. Please explain.

21. Please describe the month end process for updating manager risk exposures including a typical timeline for delivery of reports to the client.

C. Implementation and Technology

1. Please provide a detailed implementation project plan with steps, tasks, timelines, hours, milestones, deliverables and timing of anticipated resources.

2. Please provide your firm’s three latest implementation plans for other similar clients.

3. Please describe your past experience with custodians, plan accounting providers, prime brokers and third-party administrators in setting up and maintaining data feeds.

4. Please describe your past experience with third-party accounting databases, in particular the Eagle STAR system.

5. Please describe the processes and controls to ensure that all data is fully reconciled with the third party accounting systems.

6. Please explain your verification process for checking data for accuracy prior to releasing it to clients.

7. Do you plan to hire subcontractors or third parties for any of the services for the implementation stage and beyond?

8. Please provide the server and workstation technology requirements of your system.

9. Explain your system’s capabilities for downloading data to Client’s data warehouse. What file formats and systems are currently supported?

10. Please describe data automation capabilities and describe what function requires manual input/processing.

11. How does a user export data out of the system? Please explain this process.

12. What capabilities does your system have for loading portfolio holdings directly from 3rd party administrators? What relationships do you currently have in place?

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13. What data providers or other systems does your system directly support without additional interface work?

D. Fee Structure and Costs

1. Describe the fee structure (system and service) in as much detail as possible. Be sure to include the implementation costs as a separate one-time fee.

2. Are there any other costs that may be incurred by users of your system, such as data licenses for indices or security master files?

3. Will you certify that the fee schedule provided above is the most favorable fee schedule that the firm offers for clients with similar requirements? If not, please explain why.

4. Do you offer government discounts? What license term structures do you offer?

E. Client Service and Training

1. Please describe the typical client services that your firm offers to the typical Plan Sponsor like OPERS.

2. Please describe the typical training program that your firm offers.

3. Please provide a sample monthly, quarterly, and annual client risk report. Please include examples of summary risk reports that might be used by a CIO or senior executive, as well as detailed reports that are appropriate for portfolio managers.

4. Please discuss the firm’s ability to produce customized reporting including risk analytics at the portfolio and security level.

5. Please discuss ways in which your firm would work with OPERS Investment Staff to increase our knowledge of various risk metrics, scenario analysis, or similar risk analysis techniques.

6. Please provide the Service Level Agreements that are in place with other clients.

7. Please describe the escalation procedures for issues and bugs for installed clients.

8. Do you offer 24/7/365 customer service access?

9. Do you have user groups?

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10. Please describe the physical location and approximate number of staff who will be providing product support to OPERS.

11. How do you track system investigation requests or bugs? Do you provide a website where clients see the status of reported items?

12. Please attach a sample copy of your contract terms and conditions and statement of work.

F. Total Fund Risk System (Total Fund Risk System Vendor Only)

1. Please describe how your total fund risk system could be used to support risk budgeting.

2. Is your risk system capable of producing reports that shows the active and total risk decomposition by managers within the asset class? Is your risk system capable of producing reports that shows the active and total risk decomposition by asset classes within the total plan? If yes, please provide the sample reports.

3. Please provide sample reports for typical pension clients such as OPERS who have well-diversified investment holdings of U.S. and Non-U.S. equities, U.S. and Non-U.S. fixed income instruments, private equity partnerships, private real estate, hedge funds, commodities and currency forwards.

4. How does your system handle asset classes or portfolios in which holdings data may not be available (such as private equity, real estate or hedge funds)?

5. In Attachment D, you will find the complete list of OPERS investment vehicles and performance benchmarks.

i) Describe your system’s treatment of public equity investments.ii) Describe your system’s treatment of public fixed income investments.iii) Describe your system’s treatment of private equity investments.iv) Describe your system’s treatment of private real estate investment.v) Describe your system’s treatment of hedge funds and fund of hedge fund investments.vi) Describe your system’s treatment of Risk Parity investments.vii) Describe your system’s treatment of Global Tactical Asset Allcoation investments.

G. Hedge Fund Risk System (Hedge Fund Risk System Vendor Only)

1. Does your system include a gross exposure calculation on a 10-year equivalent basis? Please explain how this is calculated.

2. How many hedge funds are on your risk system? Please provide a list of these funds. Provide a breakdown based on:

a. Positions reported by 3rd party administratorb. Positions reported by managerc. Exposures reported by managerd. Exposures derived from investor letter or provided by client

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e. Analytics are returns based

3. In Attachment D, you will find the complete list of OPERS investment vehicles and performance benchmarks.

a. Describe your system’s treatment of public equity investments.b. Describe your system’s treatment of public fixed income investments.c. Describe your system’s treatment of Risk Parity investments.d. Describe your system’s treatment of Global Tactical Asset Allcoation investments

4. Are the risk engine settings customizable by the user? (i.e. 99% VaR vs. 95% VaR or 91 day half life vs. 180 day half life, etc.) Please provide an example.

5. How many hedge funds allow full transparency of positions to clients?

6. Does your system include the ability to measure forecasted beta on various market indices? What indices are available?

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ATTACHMENT D – SECURITIES HOLDINGS AND BENCHMARK

Types of Securities Held by OPERS

Public Market Securities

Global Equities ADR Common Stock Currency Forwards Equity Linked Notes Exchange Traded Funds (ETF) Futures GDR Options Preferred Stock Warrants and Rights Total Return Index Swaps Custom Swaps CFD

Fixed Income Agency Notes Asset Backed Securities CDX Index Swaps CMOs Commercial Mortgage Back Securities Commercial paper Corporate Bonds with step-up coupons Corporate Notes (Investment Grade and High Yield) Corporate Notes with embedded options (calls, puts, sinking fund) Credit Default Swaps Floating Rate Notes Forwards Futures Inflation Linked Bonds (Domestic and International) Interest Rate Swaps Mortgage Backed Securities Mortgage Backed Securities TBAs Non-Dollar Bonds Options Swaptions Total Return Swaps Treasury Notes and Bonds Bank Loans 144A bonds

Other Commodities Futures and Swaps Real Estate and Real Estate owned through a joint venture Private Equity and Venture Capital partnerships Hedge fund of funds Direct hedge funds

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Benchmarks used by OPERS

Global Equities S&P 500 Russell 3000 Russell 1000 Russell 2000 Russell 2000 Growth Russell 2000 Value Russell Top 200 Russell Mid Cap (a.k.a. Russell 800) MSCI World Ex‐US IMI Net Dividends MSCI EAFE Standard Index Net Dividends MSCI EM IMI Net Dividends MSCI EM Standard Index Net Dividends MSCI World Ex –US Small Cap Net Dividends MSCI All Country World IMI Net Dividends

Core Fixed Income Barclays Capital Aggregate Barclays Capital US TIPS Barclays Capital High Yield Barclays U.S> Treasury Index Merrill Lynch 3 Month Treasury Bill JPM EMBI Global MSCI EM Currency (USD) Federal Funds Rate Index Citi WGBI

Private Equity State Street Private Equity Index (SSPEI)

Real Estate

NCREIF Fund Index - ODCE

Commodity S&P GSCI Total Return Index

REIT Dow Jones U.S. Select RESI

Hedge Funds HFRI Index

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