Organization - Burlington, VT



QuestionnaireOrganizationName of firm.RVK, Inc.Name, address, and telephone number(s) of key contact.Kevin Schmidt, Consultant1 Penn PlazaSuite 2131New York, New York 10119Phone: 646.805.7082Corry Walsh, Consultant30 N LaSalleSuite 3900Chicago, Illinois 60602Phone: 312.445.3101Ownership structure of firm.We are a 100% employee-owned and privately-held firm with no affiliates, joint ventures, or parent company.Team structure brief biographies of individuals to be assigned.Consultants Kevin Schmidt and Corry Walsh, CFA, CAIA, will serve as Co-Lead Consultants for the City. They will attend meetings and act as primary contacts for the Board and Staff.4254501143000Kevin Schmidt – ConsultantKevin is a Consultant located in our New York office. He has over 18 years of experience in the asset management and consulting industries, and serves a diverse client base including public pensions, endowments & foundations, and corporate entities. Kevin has experience in a broad range of consulting services, including asset allocation studies, asset class structure optimizations, investment manager searches, performance evaluation and attribution, investment policy development, and client education presentations. Prior to joining RVK, Kevin worked as a Client Portfolio Manager at Invesco on their Quantitative Equity team as well as a Product Manager on the Global Equity team at OppenheimerFunds. His responsibilities included performance attribution and analysis, factor research, manager due diligence, and product development.Kevin received his BS degree in Economics from the University of Maryland and his MBA in Finance from Fordham University. 4744533143800Corry Walsh, CFA, CAIA – Consultant Corry joined RVK in 2019 and is located in our Chicago office. He serves a range of clients, including insurance plans, endowments and foundations, pension plans, defined contribution plans, and health organizations. His responsibilities include asset allocation, investment manager research, asset class portfolio structuring, risk analyses, and client education presentations. Corry also serves on the firm’s OCIO search and evaluation team, which is responsible for conducting search, evaluation, and monitoring assignments for clients who wish to engage with a discretionary provider. Prior to joining RVK, Corry worked at Callan LLC as the Director of the Callan Institute and as a member of Callan’s Institutional Consulting Group.Corry earned his MBA from the University of Chicago Booth School of Business with concentrations in Analytic Finance and Econometrics and Statistics, and his undergraduate degree from Grand Valley State University. Additionally, Corry is a Chartered Alternative Investment Analyst (CAIA) and CFA Charterholder.Business focus/client base.What is the primary business focus of your firm? Is your firm affiliated with any organization(s), specifically a brokerage firm? If yes, please describe the relationship in full.RVK’s sole business focus is non-discretionary investment consulting for plan sponsors. We are not affiliated with any other organizations.What is your firm's targeted market in terms of plan size?RVK does not have a specific target market as we believe it is important to have a diversified client base to enable to us to leverage knowledge of best practices and share them with clients. Our diversified client base also reduces concentration and industry risk. All potential client opportunities are vetted based on many factors, such as scope of services, asset size, location, type of plan, general fit, etc. How many pension consulting clients do you currently have? What is the average plan size of your clientele?As of June 30, 2020, RVK consults to 99 pension (defined benefit) plans on a full-retainer basis, with an average plan size of $8.0 billion.What is the client turnover (gains and losses) of your firm over the last three years?Over the last three years ending 12/31/2019, RVK has gained 54 clients, and 27 departed, resulting in a positive net change of 27 clients. How many full-time staff is employed by your team and firm?RVK presently employs 124 staff, all of which are full time. Thus all members of the proposed team are full time as well.When did your organization begin providing investment advisory services?RVK was founded and began providing investment advisory services in 1985.Is providing investment advisory services currently one of your organization's principal lines of business?Yes, providing non-discretionary investment advisory services is our organization’s only line of business.What percentage of your organization's revenues in the last fiscal year was attributable to the investment advisory practice?One hundred percent (100%) of our firm’s revenue in the last fiscal year was attributable to our investment advisory practice, which is our sole line of business.Is your organization registered with the Securities Exchange Commission (SEC) as an investment advisor under the Investment Advisors Act of 1940?Yes, RVK is registered with the SEC as an investment advisor under the Investment Advisors Act of 1940.Please provide a copy of your organization's Form ADV Part II A&B.Please see page 57 for a copy of our Form ADV Part II A&B.Potential Conflicts of InterestDoes your organization provide trust, investment management or securities brokerage services (including commission recapture)? If so, please identify and explain all such services provided:RVK does not provide any trust, investment management or securities brokerage services. Investment advisory services is our sole line of business.What percentage of your 2019 revenue was attributable to such trust, investment management or securities brokerage services?Zero percent (0%) of RVK’s revenue was received in soft dollars. Our firm does not accept soft dollars. RVK does not provide any such services.Does your organization provide any other services or engage in any other lines of business aside from investment advisory, trust, investment management, commission recapture, soft-dollar or securities brokerage services? If so, please describe such services in detail, noting the percentage of your firm's 2019 revenue that was attributable to such services.No, not applicable. RVK does not provide any such services.If any part of your organization provides brokerage services, soft-dollar services, directed brokerage, discount brokerage or commission recapture programs (collectively, "brokerage related services"):RVK does not provide any brokerage related services. Investment advisory services is our sole line of business.What percentage of your organization's 2019 revenue was received in soft dollars?Zero percent (0%) of RVK’s revenue was received in soft dollars. RVK does not accept soft dollars. RVK does not provide any such services.What percentage of your organization's 2019 revenue was attributable to (or compensation for) brokerage-related services?Zero percent (0%) of RVK’s revenue was attributable to (or compensation for) brokerage-related services. RVK does not provide any such services.Does your organization offer or sell services or products to investment managers? If so, identify these in detail and name every manager who purchased any such services or products (with hard or soft dollars) over the last two fiscal years.No.Please confirm that your organization will not accept any commissions or other remuneration from any service providers in exchange for placing business with that organization.RVK confirms that it will not accept any commissions or other remuneration from any service providers in exchange for placing business with that organization.Does your organization solicit or accept fees for placing or helping to place money managers? If so, please explain.No.Does your organization charge to include any investment managers in your database or in any search? If so, please explain.No. Does your organization have any clients or associations that could present a conflict of interest and possibly compromise the objectivity of its advice to the City of Burlington? If so, please explain.No.Does your organization receive any products or services from any investment managers? If so, identify each service and the amount of compensation paid, if any.RVK receives no compensation whatsoever from any investment manager. Our firm has a longstanding policy to avoid any financial relationships with organizations that we evaluate for our clients that would create a conflict of interest. ?Legal Fiduciary Status, Investment Advisory Status and LitigationDoes your organization consider itself to be a fiduciary in its role as investment advisor? Will your organization contractually agree to accept fiduciary responsibility with respect to its investment advisory services?Yes, if hired, RVK will consider itself to be a fiduciary in its role as investment advisor to the City, and will contractually agree to accept fiduciary responsibility with respect to its investment advisory services.Does your organization serve as an independent fiduciary to any client subject to court supervision or a U.S. Department of Labor judgment or decree? If so, please identify them.No.Has your organization, or a principal, employee, or agent of your organization, ever been investigated or charged by the SEC, the U.S. Departments of Justice or Labor, the Internal Revenue Service, or any other federal, state or local regulatory agency for any purported or actual violation of applicable law? If yes, please explain and provide date(s) of the violation(s).No.Over the past five years, has your organization or any principal, employee or agent been named or threatened to be named as a party in any private or governmental litigation, arbitration or other dispute resolution proceedings; been a target in any governmental or professional investigation; or settled any actual or threatened claim? If so, please provide details including a copy of all relevant complaints and communications, a list of all parties, and the results or status of such proceedings(s), investigation(s) or settlement(s). All fillings, or otherwise, must be disclosed.Yes. In December 2017, our firm—along with 33 other organizations and individuals—were named in a complaint filed, not by a client, but by eight individuals described as pension plan participants and taxpayers in the state of Kentucky. The complaint named numerous individuals and organizations including asset managers, actuaries, staff of the retirement board (chief investment officers, asset class officers, executive directors), numerous individual trustees, fiduciary counsel to the board, the board itself and even the Government Finance Officers Association.Since then, the complaint moved slowly through many procedural stages. In a decisive and unanimous decision issued on July 9, 2020, the Supreme Court of the Commonwealth of Kentucky sent the complaint back to the trial court with orders that it be dismissed. That order became final on July 30, 2020. The trial court has not yet acted on the Kentucky Supreme Court's order to dismiss. Pending the dismissal of the complaint, the newly elected Attorney General has sought permission from the trial court to intervene in the proceeding. While the Attorney General has, for the time being, formally reasserted most of the claims that had been alleged, he has declared his intention to investigate these claims to determine whether they have merit. The defendants will be permitted to file responses to the motion to intervene, and the trial court will conduct a hearing to determine whether the motion to intervene will be granted. The individual plaintiffs—whose complaint the Supreme Court has been ordered to be dismissed—have also filed a motion for permission to amend their complaint. The defendants will be permitted to file responses opposing the motion to amend the complaint, and it is the position of the defendants that the trial court lacks jurisdiction to amend the complaint.As it relates to RVK, the Attorney General has not alleged new claims in the proposed Intervening Complaint, and we continue to state with confidence and without reservation that the claims made against RVK are completely without merit. It is important to note that in RVK's 34-year history, we have never been named in a complaint or involved in litigation initiated by a client.?InsuranceDoes your organization carry a fidelity bond and/or fiduciary liability, professional liability or any other insurance that would be beneficial to the Plan? If so, please describe the insurer, the type of insurance coverage, the beneficiary of such coverage, the limits of such coverage and the deductible amount under such coverage. Please also attach a copy of each such policy or an applicable certificate of insurance.Yes, please see the table below, and onto the following page, for details of our insurance coverage, and page 109 for our insurance certificate.Active Policies for RVK, Inc.Policy NumberLine of CoverageTerm of CoverageLimits of LiabilityCarrierCarrier Rating447182Workers Compensation – Oregon4/1/20-4/1/21Statutory Required LimitsSAIF13244538Workers Compensation – New York4/1/20-4/1/21Statutory Required LimitsNew York State Insurance Fund52WECAC6934Workers Compensation – All Other States4/1/20-4/1/21Statutory Required LimitsHartford Insurance Company of the MidwestA XV652064270Professional Liability (Errors & Omissions)1/1/20-1/1/21$5,000,000 AggregateContinental Casualty CompanyA XV$500,000 Deductible652064270Directors & Officers Liability1/1/20-1/1/21$5,000,000 AggregateContinental Casualty CompanyA XV$500,000 DeductiblePolicy NumberLine of CoverageTerm of CoverageLimits of LiabilityCarrierCarrier Rating652064270Crime1/1/20-1/1/21$3,000,000 Employee Theft & Client CoverageContinental Casualty CompanyA XV$3,000,000 ERISA Fidelity$3,000,000 Forgery & Alteration$3,000,000 Inside & Outside premises – Money, Securities, Other Prop.$3,000,000 Counterfeit Currency$3,000,000 Computer & Funds Transfer Fraud$50,000 Deductible652064270Employment Practices Liability1/1/20-1/1/21$3,000,000 AggregateContinental Casualty CompanyA XV$50,000 Deductible652064270Fiduciary Liability1/1/20-1/1/21$2,000,000 AggregateContinental Casualty CompanyA XV$5,000 RetentionUH2925221108Umbrella Liability1/1/20-1/1/21$4,000,000 per Occurrence$4,000,000 AggregateHanoverA XV1114106Cyber Liability1/1/20-1/1/21$3,000,000 Aggregate$1,000,000 Each ClaimLloyds of LondonA XVZD2918712408Hired Auto1/1/20-1/1/21$1,000,000HanoverA XVZD2918712408Commercial General Liability1/1/20-1/1/21$1,000,000 per Occurrence$2,000,000 AggregateHanoverA XVIs your organization currently aware of any claims that have been made, are being made or may be made with respect to such policies? If so, please describe.No.Has your organization ever assisted a client in reducing its fiduciary liability insurance premiums? If so, please explain how, and to what extent your organization has done this (and provide references), and whether and how your organization would assist the Plan in reducing its premiums.At least in recent years, we cannot recall any client who has asked us to assist them in reducing their fiduciary liability premiums. We have had clients ask their RVK consulting team for thoughts regarding PBGC premiums, however. Moreover, as a co-fiduciary to all our clients, our firm itself has carried various insurance coverages for decades relating to our consulting practice such as Error and Omissions, Fidelity Bonds, etc. While we are not insurance brokers nor insurers ourselves, we do renegotiate these policies with various carriers annually, so we have a substantial amount of experience in this area. If you would like to include in our contractual scope of work assisting you in getting the most cost-effective fiduciary liability insurance premiums possible, we stand ready to assist in whatever ways we can.Staffing and FacilitiesHow is your organization structured to service your accounts?Pertaining to prospective accounts, when responding to a Request for Proposal, we design a service team composed of professionals who have direct experience with a prospect's plan type(s) and the required scope of services, as well as sufficient capacity to service the prospect. With regard to existing accounts, we strongly believe in a team approach to consulting as clients benefit from the experience and ideas of more than one individual as well as ensuring easy contact with members of their service team. Every client is provided with a team email address (e.g. Team.Burlington@), and we encourage clients to use these email addresses as an effective way to correspond with all members of the team. Most of our clients are serviced by multiple consultants who typically serve in a co-lead or backup role, which contributes to the quality of investment advice that our clients receive, while also enabling consultants to serve clients effectively. We also assign an Investment Associate and Investment Analyst to serve as dedicated resources for each client. RVK's team approach to servicing clients provides that a professional familiar with your account will always be available to assist you and provides direct access to all investment professionals at our firm, including practice experts, such as those on our Investment Manager Research Team.How many of your staff are investment consultants?RVK presently has 37 investment consultants/associate consultants.What is the average number of accounts handled per investment advisor?Although our client to consultant ratio varies based on client location, size, and complexity, we seek to maintain an average client/Lead Consultant ratio of approximately 6:1.Describe the qualifications and expertise of your organization's professional staff (both local and national), including their years of service and experience in the public pension sector.RVK has been providing investment consulting services to public pension clients since the inception of the firm in 1985. We currently serve 43 public pension clients across 13 states and two countries, with assets ranging from three hundred thousand dollars to several hundred billion dollars. We have multiple consultants throughout the firm with extensive experience in serving pension plan clients, both currently and prior to joining RVK, and as Chief Investment Officers or Trustees with various funds. Please see page 112 for biographical information on our entire team of consulting professionals. RVK operates in a team environment; therefore, information is shared amongst our consultants so our clients can benefit from the knowledge of consultants with expertise in various areas. We provide consistent investment consulting information to clients by having frequent intra-firm training and topic-specific review sessions. All consulting professionals participate in our consultant meetings, discussions on relevant industry topics, and ways in which we can better serve our clients.Please list the name and location of the primary individuals who will be responsible for the City of Burlington's Plan, and provide detailed biographies of such persons, including their tenure with your organization. How many Plans similar to Burlington's do these primary individuals service? Please list the number of clients that are assigned to these individuals.Please see below for a chart detailing our proposed primary individuals’ experience as well as biographies for each member. Should we be so fortunate to be selected as the City’s consultant, we will assign dedicated support staff.Name, Title, LocationProposed RoleRVK TenureNumber of Plans Similar to BurlingtonNumber of Total ClientsKevin SchmidtConsultantNew York, NYCo-Lead Consultant4218Corry Walsh, CFA, CAIAConsultantChicago, ILCo-Lead Consultant19281Kevin works with three public clients and one corporate client with defined benefit plans, representing four pension plans with assets ranging from $2 billion to $27 billion.2Corry works with three public clients and two corporate clients with defined benefit plans, representing nine pension plans with assets ranging from $120 million to $2 billion.439947825500Kevin Schmidt – ConsultantKevin is a Consultant located in our New York office. He has nearly 18 years of experience in the asset management and consulting industries, and serves a diverse client base including public pensions, endowments & foundations, and corporate entities. Kevin has experience in a broad range of consulting services, including asset allocation studies, asset class structure optimizations, investment manager searches, performance evaluation and attribution, investment policy development, and client education presentations. Prior to joining RVK, Kevin worked as a Client Portfolio Manager at Invesco on their Quantitative Equity team as well as a Product Manager on the Global Equity team at OppenheimerFunds. His responsibilities included performance attribution and analysis, factor research, manager due diligence, and product development.Kevin received his BS degree in Economics from the University of Maryland and his MBA in Finance from Fordham University. 4140201397000Corry Walsh, CFA, CAIA – Consultant Corry joined RVK in 2019 and is located in our Chicago office. He serves a range of clients, including insurance plans, endowments and foundations, pension plans, defined contribution plans, and health organizations. His responsibilities include asset allocation, investment manager research, asset class portfolio structuring, risk analyses, and client education presentations. Corry also serves on the firm’s OCIO search and evaluation team, which is responsible for conducting search, evaluation, and monitoring assignments for clients who wish to engage with a discretionary provider. Prior to joining RVK, Corry worked at Callan LLC as the Director of the Callan Institute and as a member of Callan’s Institutional Consulting Group.Corry earned his MBA from the University of Chicago Booth School of Business with concentrations in Analytic Finance and Econometrics and Statistics, and his undergraduate degree from Grand Valley State University. Additionally, Corry is a Chartered Alternative Investment Analyst (CAIA) and CFA Charterholder.How many consultants have left your organization during the past two years? Include their reasons for leaving. Please describe the measures your organization takes to assure continuity of service when a team member leaves your organization.Please see the chart below for consultants who left RVK over the past two years ending 12/31/2019. TitleDate LeftReasonAssociate Consultant9/6/2019Left IndustryDirector of Investment Manager Research, Principal1/2/2019Joined Financial Advisor/Broker-Dealer FirmDirector of East Coast Consulting, Senior Consultant, Principal8/3/2018Joined Asset Management FirmAssociate Consultant6/29/2018Left IndustryChief Compliance Officer/ Consultant6/29/2018Founded Own Firm in Another IndustryAssociate Consultant4/27/2018Joined Plan Sponsor/RVK ClientConsultant1/5/2018Went to a CompetitorIn the unlikely event that a member of your assigned team leaves the firm or is not available, our senior management will assign an experienced professional within the firm to replace the individual who has left, pending approval from the City. A key benefit of our team-based consulting model is that institutional knowledge of our work with the City will not be lost if a team member leaves the firm or is unavailable; rather, it will be maintained via the City’s "Master File," which will contain a historical narrative of meeting summaries, asset allocation decisions, and all relevant action items executed by RVK since the inception of our relationship.Further, other members of your client service team will continue to be available via a dedicated client service team email, which will be provided to your Board, should we be selected for this engagement. This unique email address will include every member of your proposed team and will provide continuity of service. We encourage all of our clients to use these team email addresses as an effective way to correspond with all members of their team.Please provide a full disclosure of whether any of your organization's professional staff has ever been suspended or disbarred from performing investment advisory services or other professional services, has been subject to any disciplinary actions, or has committed any criminal offenses evidencing fraud, dishonesty or breach of trust.No, none of our professional staff has ever been suspended or disbarred from performing investment advisory services or other professional services, nor have they been subject to any disciplinary actions, or committed any criminal offenses evidencing fraud, dishonesty or breach of trust.Please describe the location(s) and capabilities of your organization's computer/data processing staff. Is the entire staff in-house? Does your organization outsource any of these services? Please describe the security of these resources.RVK's computer/data processing staff are located in-house in our Portland, Oregon Headquarters. ?Our firm maintains state-of-the-art security systems and procedures for its databases and client-related data. It is our policy that no data classified as critical or confidential be transmitted over any network outside of secured zones within the firm's network, unless appropriate and standard encryption techniques are used. Under no circumstances will critical or confidential data be transmitted across an unsecured network in clear text. RVK believes in the importance of data breach insurance; therefore, we carry $3 million in Cyber Liability insurance coverage. All of our electronic data – including the contents of our databases – is archived daily via LTO4 tapes, and the daily backup tapes are stored in our Information Systems' fire safe. Weekly backup sets are available for six weeks and the monthly tape sets are held for seven years. A master copy of the installation CD and installation codes is also stored offsite at our backup facility, Iron Mountain, located near our Headquarters in Portland, Oregon. In case of a declared emergency at RVK's Portland location, detailed action items, which are listed in our firm's Business Continuity Plan, will be implemented. As part of our ongoing commitment to security and to improve the speed and performance of our various systems and databases, our firm made the following recent upgrades/enhancements to our hardware systems. Upgraded VMWare hosts hardwareTransitioned systems to a new database server version and operating system Upgraded core network switches Upgraded our SAN storage Converted from a Hyper-V to VMware environmentClientsPlease provide a representative list of your organization's investment advisory clients of similar size.Please see below for a representative list of clients with asset sizes ranging from $100 million to $250 million. Due to confidentiality provisions in our client contracts, we cannot disclose clients by name in conjunction with their asset size without their advance express permission; therefore, asset sizes are excluded from the chart. Client NameClient TypeAAA Club Alliance, Inc.CorporationAAA Oregon/IdahoCorporationAAA WashingtonCorporationAda County Treasurer's OfficeGovernment – LocalBledsoe Health TrustTaft HartleyBoise State UniversityEducation (Public)California Teachers Association Defined ContributionTaft HartleyCollins FoundationNonprofitConfederated Tribes of the Warm SpringsGovernment – LocalFCTG, LLCCorporationGeorgia O'Keeffe MuseumNonprofitHecla Mining CompanyCorporationIdaho Plumbers & PipefittersTaft HartleyIntermountain Retail Store Employees Pension TrustTaft HartleyLightHouse for the Blind and Visually ImpairedNonprofitModa, Inc. Defined ContributionCorporation - InsuranceModa, Inc. Operating ReserveCorporation - InsuranceNeenah Enterprises, Inc.CorporationSan Diego Transit CorporationGovernment - LocalSan Francisco Opera AssociationNonprofitSouthern California General Sales Employers UFCW UnionsTaft HartleyTimber Operators Council WoodworkersTaft HartleyUFCW Pharmacists, Clerks, and Drug EmployersTaft HartleyVigor Industrial, LLCCorporationWashington Education AssociationCorporationWestern Washington PaintersTaft HartleyPlease list your organization's government public Pension system clients and the portfolio size for each.Client NamePlan NamePlan Asset ValueClient Type Anchorage Police and Fire Retirement SystemAnchorage Police and Fire Retirement System Pension Plan$350,835,874.54Government - LocalCity of Austin Employees' Retirement System City of Austin Employees' Retirement System$2,749,066,322.28Government - LocalCity of Jacksonville Police and Fire City of Jacksonville Police and Fire Pension Fund$2,098,482,886.29Government - LocalClient NamePlan NamePlan Asset ValueClient TypeCity of Jacksonville Retirement System City of Jacksonville Employees' Retirement System$2,248,698,516.53Government - LocalCity of PlanoCity of Plano Retirement Security Plan, The (RSP)$163,770,354.16Government - LocalConfederated Tribes of the Warm SpringsConfederated Tribes of the Warm Springs Reservation of Oregon Senior Citizen Benefit Plan$932,942.84Government - LocalConfederated Tribes of the Warm SpringsConfederated Tribes of the Warm Springs Reservation of Oregon Tribal Council Pension Fund$346,690.74Government - LocalFort Worth Employees' Retirement FundFort Worth Employees' Retirement Fund Defined Benefit Plan$2,254,591,544.08Government - LocalGila RiverGila River Indian Community Retirement Plan$297,087,047.58Government - LocalKansas City Police Employees' Retirement SystemsCivilian Employees' Retirement System of the Police Department of Kansas City, Missouri$149,587,676.66Government - LocalKansas City Police Employees' Retirement SystemsPolice Retirement System of Kansas City, Missouri$893,928,966.96Government - LocalKansas City, Missouri Employees’ Retirement SystemKansas City, Missouri Employees’ Retirement System$1,147,873,031.95Government - LocalLos Angeles Department of Water and PowerLos Angeles Water and Power Employees' Retirement Fund$13,253,978,264.75Government - LocalLos Angeles Fire and Police Pension SystemLos Angeles Fire and Police Pension System Defined Benefit Plan$23,515,154,052.52Government - LocalMunicipality of AnchorageMunicipality of Anchorage Pre-Funding Investment Plan$35,221,765.58Government - LocalNavajo NationNavajo Nation Retirement Plan$974,691,107.87Government - LocalSan Diego Transit CorporationSan Diego Transit Corporation Employees Retirement Plan$166,570,712.36Government - LocalSanta Barbara County Employees’ Retirement SystemSanta Barbara County Employees' Retirement System$3,148,886,957.97Government - LocalSequoia Healthcare DistrictSequoia Healthcare District Employees Pension Plan$62,322,079.02Government - LocalCalifornia Public Employees Retirement SystemCalifornia Public Employees Retirement System Defined Benefit Plan$389,037,100,000.00Government - StateCalifornia State Teachers' Retirement SystemCalifornia State Teachers' Retirement System Defined Benefit Plan$246,028,000,000.00Government - StateMontana Board of InvestmentsMontana Board of Investments Firefighters’ Retirement Plan$459,336,585.42Government - StateMontana Board of InvestmentsMontana Board of Investments Game Wardens’ Retirement Plan$212,572,371.37Government - StateMontana Board of InvestmentsMontana Board of Investments Highway Patrol Retirement Plan$151,266,419.69Government - StateMontana Board of InvestmentsMontana Board of Investments Judges’ Retirement Plan$105,690,447.64Government - StateMontana Board of InvestmentsMontana Board of Investments Police Retirement Plan$433,584,674.67Government - StateMontana Board of InvestmentsMontana Board of Investments Public Employees’ Retirement Plan$5,836,485,563.44Government - StateClient NamePlan NamePlan Asset ValueClient Type Montana Board of InvestmentsMontana Board of Investments Sheriffs’ Retirement Plan$383,461,959.94Government - StateMontana Board of InvestmentsMontana Board of Investments Teachers’ Retirement Plan$4,137,661,438.78Government - StateMontana Board of InvestmentsMontana Board of Investments Volunteer Firefighters’ Retirement Plan$39,860,725.27Government - StateNew York State CommonNew York State Common Retirement Fund$216,368,954,854.77Government - StateOhio Retirement Study CouncilORSC - Highway Patrol Retirement System (HPRS)$879,545,759.00Government - StateOhio Retirement Study CouncilORSC - Ohio Police and Fire Pension Fund (OP&F)$15,059,853,147.91Government - StateOhio Retirement Study CouncilORSC - Public Employees Retirement System Pension Fund (PERS)$86,221,485,047.55Government - StateOhio Retirement Study CouncilORSC - School Employees Retirement System (SERS)$14,550,126,252.20Government - StateOhio Retirement Study CouncilORSC - State Teachers Retirement System (STRS)$77,079,636,298.57Government - StatePublic School and Education Employee Retirement Systems of Missouri Missouri Education Pension Trust$46,913,337,214.00Government - StateState Board of Administration of FloridaFlorida Retirement System Defined Benefit Pension Plan & Other Mandates$192,248,353,067.59Government - StateTeachers' Retirement System of IllinoisTeachers' Retirement System of the State of Illinois Defined Benefit Plan$51,616,279,385.63Government - StateTexas Municipal Retirement SystemTexas Municipal Retirement System Cash Balanced Pension Plan$29,989,152,360.99Government - StateWashington State Investment BoardWashington State Investment Board Defined Benefit Plan$145,383,682,422.00Government - StateMinistry of Finance and Banco Central de Chile Ministry of Finance and BCCh Reserve Pension Fund (RPF)$10,786,569,535.63Government - FederalPlease complete the following table:Pension Plan Statistics:Size of Pension Plan Assets# of Pension PlansTotal Pension Assets in $ MillionsUNDER $100M34$1,171.9 $100M TO $200M19$2,727.6 $200M TO $300M5$1,230.6 OVER $300M50$1,648,172.8 TOTAL108$1,653,302.9 All Plan Statistics:Size of Plan Assets# of Plans (all types)Total Assets in $ MillionsUNDER $100M275$6,897.2$100M TO $200M54$7,805.5$200M TO $300M17$4,239.6OVER $300M130$2,532,393.8TOTAL476$2,551,336.1Please list the number of clients that have terminated your organization's services during the past three years, including their reasons for termination.Over the past three years ending December 31, 2019, RVK lost 27 clients and gained 54, resulting in a positive net change of 27 clients. Reasons for losses include:Selected another provider through a competitive process (10)Vendor or plan consolidation (8)Selected a specialty real estate advisor (6)*Desired a discretionary provider (2)Differences in fundamental investment philosophy (1)*These losses were due to the separation of RVK's Real Estate Consulting Group in the early part of 2017. The Group had decided to pursue other business ventures, including asset management. These departures represent Real Estate consulting clients, not full-retainer clients, thus it was a natural step for these clients to either follow the specialty team that had been servicing them or to commence a search for a new real estate consultant (which several of them proceeded to do). Real Estate research was subsequently re-integrated back into our Portland-based Investment Manager Research Team with required pacing, manager database, and performance reporting tools retained by RVK, providing a seamless transition for clients.For reference purposes, provide the name, address, telephone number and contact person for four current clients (three must be government public Pension system clients) for whom your organization provides comprehensive investment advisory services.Vermont Pension Investment Committee Eric Henry, CPAChief Investment Officer(802)828-3668Eric.Henry@Services Used: Retainer full service general consultingKansas City Missouri Employees’ Retirement System Barbara DavisExecutive Officer(816) 513-1904Barbara.Davis@Services Used: Retainer full service general consultingCity of Jacksonville Retirement SystemsBrennan W. MerrellManager of Debt and Investments(904) 255-5364BMerrell@Services Used: Retainer full service general consultingBrooklyn College FoundationTodd Michael GalitzExecutive Director(718) 951-5000 ext. 2035Todd.galitz@brooklyn.cuny.eduServices Used: Retainer full service general consultingServicesGeneralPlease indicate which of the services listed below your organization intends to provide to the Plan (Please indicate yes or no):attend or teleconference regularly scheduled Board meetings (generally monthly). In person quarterly meetings at a minimum;Yes.advise the Board during these meetings on the investment impact of plan amendments that may be considered;Yes.provide oversight of all investment aspects of the Board's operations;Yes.review and develop an investment policy statement and provide an analysis on the reasonableness of investment assumptions;Yes.advise the Board on the prudence and relative financial impact of various investments;Yes.review, develop and periodically rebalance asset allocation;Yes.recommend hiring, retention and termination of investment managers, mutual funds and other investment products;Yes.prepare and present quarterly performance evaluations, including a review and report of all investment transactions by all investment managers in a five year investment performance history of the Plan (if source date is available);Yes.review and comment upon investment management agreements prepared by the Plan's counsel;Yes.develop and monitor adherence to individualized investment guidelines, risk controls, proxy voting and adherence to proxy voting policies;Yes. RVK supports an ongoing institutional monitoring process, which may include summary reporting of manager reported investment policy guideline attestation, reporting of proxy policies maintained, and proxy voting activities by managers or third party providers. monitor custody bank and assist in retention and replacement, as appropriate;Yes.supervise, monitor and verify transfer of assets in the event of change of investment manager;Yes.provide assistance required by audits or examinations conducted by governmental agencies;Yes.assist in reducing fiduciary liability insurance premiums and address special investment and other issues as they arise.Yes.Investment Policy Development & Portfolio DesignDescribe briefly the processes and tools your organization uses to help clients develop investment policies and objectives.Creating, reviewing, and revising an Investment Policy Statement (IPS) is a critical fiduciary responsibility for an investment consultant, thus it is a core competency at RVK. A high quality IPS not only documents investment objectives, but also provides a framework for an effective implementation process. An important part of our process is ensuring that the content and guidance offered in an IPS can be followed by all parties, particularly the fiduciaries of the fund(s). Having an investment policy that is too prescriptive can potentially lead to additional liability; therefore, we work with clients to verify the IPS language covers all necessary content while also offering flexibility in how the policy is implemented. Leveraging decades of experience, our typical approach to investment policy development and review is described below.Step #1: Define Portfolio Objectives, Constraints, and Investment StrategyThe first step in the process is to develop a comprehensive understanding of a fund's investment objectives and constraints, as described above. In addition to the information gathered to understand goals, objectives, and obligations, we seek to identify:Responsible fiduciaries and the relevant roles of eachThe process governing the delegation of responsibilitiesOther unique issues and or preferences that warrant coverage in the IPS Step #2: IPS CreationThe second step in the process is to draft an IPS that communicates the strategic objectives of the client and provides a framework for successful execution. If developing an entirely new IPS, this step will entail conversations and reviews by Board members and various degrees of involvement from legal counsel (depending on the fund). While every client is unique, we find that an effective IPS balances the need to communicate high level fund objectives and constraints, while providing investment staff and third-party contractors with sufficient flexibility to perform their duties efficiently and effectively. Topics that are commonly addressed include:Statement of a fund's background and missionKey roles and responsibilities (e.g., trustees, staff, managers etc.)Statement of key objectives Return objectiveRisk toleranceInvestment constraintsStrategic asset allocationAllowable asset classesTarget allocation and allowable rangesProhibited investmentsInvestment manager performance evaluation criteriaQualitative and quantitative thresholds for manager monitoring and/or terminationStep #3: Continuous ReviewInvestment strategies and portfolio objectives evolve over time, thus we continuously review and recommend updates to an IPS when material changes in strategy or objectives occur.Please see page 115 for a sample IPS.How does your organization identify and understand the Plan's financial and investment objectives?When we are selected as a client's investment consultant, we first work with their board and/or committee members to gain a better understanding of the portfolio(s), their unique goals and objectives, the roles of various stakeholders, and current governance structure. We truly listen to our clients and work collaboratively to find solutions. Every client is in a different situation and may have existing challenges or a unique structure, thus we work with each client to identify and understand their goals and preferences, and then outline a path forward. As fiduciaries, we want to do all we can to help safeguard their portfolios/plans for beneficiaries. Our ultimate goal is to partner with clients and assist them in achieving their short- and long-term investment objectives.In addition, comment on your organization's process for recommending modifications to investment guidelines.Our approach to recommending modifications to investment guidelines is a collaborative effort between RVK and our client. As stated in our response to the previous question, when we are selected as a new client's investment consultant, we first work with them to gain a better understanding of the plans, their unique goals and objectives, the roles of various stakeholders, and current governance structure. Upon thorough review of all these pieces and dialogue with board/committee members and staff, we then suggest changes to the investment policy statements for consideration. As part of our service and recommended process, we complete the review and lead a discussion on proposed revisions and rationale.We believe in making proactive recommendations to our clients rather than supplying information and data that may lead to reactive investment decisions. To this end, we constantly analyze our clients' portfolio structures and guidelines and make recommendations for changes whenever needed. Describe your firm's philosophy and approach to using alternative investments, including:We believe the consideration, role, and optimal usage of alternative investments will, and should, vary widely by client. We also believe the role of alternative investments must be considered in the context of other policy decisions made for an investment program. The majority of our clients use alternative investments in their portfolios, with approximately 50% investing in real estate and 70% investing in some combination of hedge funds and/or private equity. Depending on the size and design of each alternative program, our clients implement the asset classes in the manner most efficient for their needs. For example, we have clients using fund of funds while others implement large alternative programs with direct alternative fund exposure. Upon evaluating the designated role of alternatives within a client's portfolio, RVK's Alternatives Research Team works in collaboration with the respective consulting team to develop the optimal strategy and allocation. As part of this effort, we design an investment program to allow clients to have sufficient liquidity in aggregate to meet their liquidity needs over time, as well as sufficient flexibility to stay within their stated asset allocation parameters. When recommending specific alternative investments to clients, we first and foremost need to understand the objective of the strategy, and how it fits into the broader investment portfolio. Key questions we explore include, but are not limited to, are listed below.What is the portfolio's tolerance for illiquidity? What are the current and future expected cash needs of the portfolio? How strong is the desire for income vs. total return for both the overall plan and the alternative strategy? What returns are you seeking from the strategy, and does this line up with the portfolio's risk tolerance? How you differentiate between traditional and alternative investments.Functionally, we consider alternative investments to be those that fall into the following six primary categories:Long-Short fundsAbsolute return strategiesPrivate equity, venture capital, and buyout strategiesPrivate debtReal estate Real asset and inflation hedging strategies Each category typically encompasses a wide range of investment vehicles, including direct funds, fund-of-funds and other hybrid products. These categories are not always mutually exclusive or perfectly defined. As the industry matures, the lines between traditional and alternative asset classes become harder to define, however, our alternatives research categories generally share the following qualities:Limited liquidity (not daily liquidity)Imperfect pricingLimited Partnership (LP) structureFee structures that usually include a base and incentive componentExplain why you would use alternatives, i.e., risk reduction, alpha, non- correlated assets, etc.? Why would you not use them?We recommend alternative investments to clients, as many funds have target return objectives that are not likely to be achieved without the use of these strategies. The higher a portfolio’s equity beta—sensitivity to equity markets—the higher its implied volatility. Reducing equity beta in a portfolio is an important component in capital preservation and reducing overall portfolio volatility. In navigating the trade-offs between return and risk, the introduction of low-correlation alternative asset classes limits downside risk to a portfolio. However, alternative asset classes may have varying degrees of liquidity and mandatory lock-up periods where client-invested capital is not readily available. RVK considers these constraints on capital accessibility when recommending an alternative investment. Generally speaking, there are often fund-of-fund structures that offer a higher degree of liquidity for clients who would like the alternative asset class exposure and diversifying benefits without sacrificing liquidity. We generally do not recommend alternative investments to clients who have a low risk tolerance or have short-term liquidity needs that cannot be met through other components of the portfolio.Alternative investments you currently utilize.Please see below for a list of alternative asset classes that our firm has experience with as we assist clients with implementing them in their portfolios:Real Estate (Core and Core Plus – Property)Absolute Return StrategiesLong-Short Equity StrategiesPrivate EquityHedge FundsBank Loans and Direct LendingDistressed Debt (Diversified)Commodities – BalancedEnergy Related Investments including MLPsReal Assets (Multi-Asset TAA)Diversified Inflation StrategiesTimberCash EquivalentsManaged FuturesTypical percentage of alternative investments, including hedge funds.RVK has been recommending investment managers in the alternatives space since the late 1990s and has assisted many clients in implementing programs within these asset classes. As a firm with a dedicated research team to each major alternative asset class, RVK is uniquely positioned to help the City monitor risk and manage services with respect to private equity and other alternatives strategies. Our alternative asset class specialists support RVK's consulting groups by providing technical capabilities in the acquisition and analysis of data. Leveraging these capabilities, RVK has established expertise in the selection of alternative managers. Over the past three years, we have conducted 11 direct Hedge Fund searches, representing approximately $981 million in placed assets, 33 Private Equity searches, representing $2.8 billion in placed assets, as well as 44 Real Estate searches, representing $1.5 billion in placed assets. As a full-service investment consultant, we provide an extensive scope of services for clients with investments in these asset classes, as shown below:Asset class educationProgram pacing & sizingProgram implementationFund sourcingFund due diligenceTerms reviewOngoing monitoringPerformance reportingSeparate account provider reviewWe have committed significant firm resources to build out our liquid alternatives platform, including investments in personnel, data, and technology infrastructure, enabling us the flexibility to offer a broad range of services to our clients.Ninety-eight percent of our clients have been invested in these asset classes for more than 10 years. However, some of these clients have not been with us for more than 10 years, but we know that they had previous alternative asset class exposure. Please see below for a breakdown of the allocation percentage as well as our clients’ average allocation to these alternative asset classes. Percentage of Clients Invested In:Private EquityReal Estate & Real AssetsHedge Funds18%35%32%Average Client Allocation?Private EquityReal Estate & Real AssetsHedge FundsAverage Allocation7%9%9%Typical Range5-15%5-15%5-15%RVK clients’ asset allocation is based on a long-term asset class assumption that is updated annually through RVK’s Capital Markets Assumption process. Additionally, a client’s allocation to each asset class is further dictated by a client’s ability and willingness to invest in certain alternative asset classes.Delivery structure(s) in use (i.e., mutual funds, ETFs, separate accounts, CITs, limited partnerships, MLPs, etc.)For alternative investments, our goal is to be structure agnostic and to discuss with clients the range of structures (separate accounts, fund of funds, and direct fund portfolios) that are available as well as the benefits and drawbacks of each structure. For example, in the private equity space, separate accounts offer a turn-key solution for larger investors interested in accessing these types of investments and minimize burden to staff. RVK's research professionals believe one of the most important factors in selecting a separate account provider is finding an investment manager that aligns philosophically with the investor. While there are a number of capable separate account providers, each one offers a different viewpoint, thus clients are best served by choosing the investment manager that aligns with their private markets philosophy and goals for the allocation. Whereas in the commodities space, we have recommended vehicles spanning separate accounts, limited partnerships, commingled funds, and mutual funds.The size of a client’s alternatives portfolio dictates the type of fund used due to asset minimums that managers require to be eligible to invest in their funds, particularly for separate accounts. As such, RVK generally advises clients with less than $100 million in alternative assets to use commingled funds, mutual funds, REITs, and in some circumstances, ETFs. Describe your philosophy and approach to using factor weighted (Smart Beta) funds?The rationale behind factor / smart beta investing relies on the assumption that identifying the drivers of how asset prices have behaved in the past will allow an investor to predict how asset prices will behave in the future. While this assumption is impossible to prove, there has been a wide body of research focused on explaining why factors have historically explained the behavior of asset prices in an effort to use the rationale to predict whether they will continue to explain performance going forward.Smart beta strategies will create tilts away from a passive capitalization weighted benchmark that may result in extended underperformance, so before committing to these strategies, investors should have a rationale for why a particular factor or set of factors is expected to perform going forward. With this in mind, smart beta strategies can be an efficient, cost effective means to get factor exposure that might otherwise be more expensive and less intentional in a traditional actively managed strategy. To this end, RVK has helped many clients implement factor weighted strategies within their equity portfolios. Please see page 149 for an RVK whitepaper, entitled Factor Index Investing: Frequently Asked Questions for more on this topic.Describe your firm's philosophy and approach to development of asset allocation strategies, including:Methodology and approach used for asset allocation modeling, including linkage to asset/liability modeling and funding.RVK uses the software package MPI Stylus Pro for use in our asset allocation modeling. The software is capable of employing various model types including Mean-Variance Optimization, Mean-Benchmark Optimization, Mean-Downside Optimization, and Mean-CVaR Optimization. We assist clients in creating an "efficient" investment portfolio, which achieves the highest possible level of expected return at a given level of expected risk; or conversely, the lowest possible risk for a given level of return. Using MPI and our proprietary capital markets assumptions, we develop an optimized efficient frontier, as well as several potential candidate portfolios for consideration by our client. The candidate portfolios will fall within a range of potential allocations that we would recommend as reasonable given the return objectives and constraints of the portfolio. We then test the candidate portfolios using Monte Carlo simulation, which incorporates non-normal distributions and projected cash flows to help identify the potential range of long-term outcomes and the probability of achieving the desired long-term results. The use of a non-normal distribution is helpful in understanding potential realistic worst case scenarios in a world where returns are not normally distributed. The inclusion of cash flow projections is often helpful in analyzing the dynamic between cash flows (direction and magnitude) and their impact on the ability of the fund to undertake investment risk—particularly with respect to liquidity.Bringing Assets and Liabilities Together The central purpose of an Asset/Liability (A/L) study is to examine the probable future consequences, over extended periods of time, of applying alternative asset allocation strategies to a fund’s investment assets in order to fund liabilities created by the benefit provisions of your Fund. A/L studies are unique in their ability to combine in a single analysis the three critical factors that drive the financial health of the City—benefit policy (liabilities), contribution policy, and investment strategy (asset allocation). While this type of forward-looking study cannot indicate with any reliability what will happen in any given year over the extended period of time (and its insights are dependent on the assumptions used), we have a strong conviction that results of the study paint a highly reliable view of the core long-term trends in a fund’s financial health. Best practice, in our judgment, is to take the general direction suggested as most appropriate by this study (with its unique consideration of liabilities, contribution policy, and trending liquidity needs), and refine it in an asset allocation study where implementing the City’s structure can reflect the pragmatic considerations of investing in the capital markets present at any given point in time.In each A/L study we complete, we examine a series of related questions associated with the central purpose of projecting future outcomes under two distinctly different methodologies:Deterministic Analysis – All underlying assumptions, liabilities, contributions, and most critically, investment returns, are achieved precisely and without variance in each and every year; andStochastic Analysis – Outcomes for investment returns vary each year according to estimated volatility with contribution requirements following suit, while actual contribution policy and liabilities remain in their current form.A deterministic analysis assumes full certainty about the future of investment returns. It is simple, and the findings reflect what will happen if the future turns out to be precisely as forecasted—no better, but also no worse. This approach is useful for gauging the general direction of change and associated consequences, but adding the element of uncertainty—more specifically year-to-year variability in the performance of the capital markets and the value of the City’s assets as well as liabilities over time—can offer additional insights, albeit along with considerable complexity.Unlike a deterministic analysis, a stochastic analysis does not assume an unvarying stream of expected investment returns year after year. Instead, it reflects the realistic view that pension plan investment returns are—like the investment markets themselves—volatile and uncertain. This results in a range of possible outcomes for the City; some are more likely while others are less likely (but still possible). Our stochastic analysis includes 2,000 Monte Carlo trials. While we typically compare four to six asset allocations in this analysis, it is ultimately dependent on the needs of each client and the specifics of a given study. Application of major variables (i.e., risk tolerance, return, correlation, skewness, kurtosis, etc.).The critical inputs of an asset allocation study are the expected risk, return, and correlations of different asset classes. Rather than try to "force-fit" a standard asset allocation for each client, we customize our approach to their specific circumstances and implementation. This often involves custom asset class return/risk/correlation assumptions, with a special emphasis on downside risk, liquidity, and total fund beta. In building our client’s custom asset allocation analysis, we use our Capital Markets Assumptions for each asset class based on longest historical asset class performance, mean-reversion, long-term expected return, standard deviation, compound return, cross- asset class correlations, and equity beta. Our modeling includes estimated liquidity as well as percentage of capital appreciation and preservation. Our asset allocation process also includes Monte Carlo simulation to estimate the near-, medium-, and long-term volatility of our clients’ portfolios as well as the probability of achieving desired returns. The Monte Carlo simulation uses a random sampling of asset class returns, including those with skewed distributions and excess kurtosis, based on the probability distribution implied by the empirical returns, to create several thousand estimates of portfolio performance. Undergoing a Monte Carlo simulation provides insight into performance of the asset allocation by examining many randomly sampled return outcomes as well as insights into the range of return and volatility outcomes. How frequently and under what circumstances do you believe asset allocation should be changed?RVK conducts formal asset allocation reviews annually, although this does not necessarily imply that changes to asset allocation are made with each iteration. In the absence of substantial changes in either the nature of a fund or the investment markets, annual reviews serve as checkpoints to confirm that the portfolio is on track to meet its long-term objectives. Does your firm employ a tactical allocation strategy? If yes, describe the parameters and the decision making process.We are generally not advocates of employing a tactical allocation strategy. The practice can lead to significantly higher risk, if incorrectly positioned, as well as higher costs given increased trading frequency. The approach also requires significant additional resources for institutions. For boards that meet infrequently and typically have full agendas, we believe the most important call on their time is focusing on strategic policy and the long-term operating needs of the institution.While we caution our clients to refrain from attempting to time the market—particularly during periods of high market volatility—we do believe that market turmoil offers an opportunity to understand the strengths, weaknesses, and general behavior of the asset allocation and asset class strategies in client portfolios. Our firm places special emphasis on close monitoring and analysis during extreme market volatility and continually searches for opportunities to improve our clients' portfolios. Does your firm use alternative asset allocation methodology beyond Markowitz? Please explain.Yes. In addition to Markowitz Mean Variance Optimization (MVO), RVK analyzes each asset allocation through the lens of Monte Carlo simulation. This allows us to analyze the effects of non-normal asset class return assumptions and conditional correlations, and compare the results to those of the MVO framework to fine tune asset allocations to meet the needs of our clients. We believe a deep understanding of the limitations of MVO are an important step in interpreting the results and designing optimal asset allocations.Although our firm has the ability to employ models such as Black-Litterman, it has been our experience that these models do not address what we view as the core problems with an MVO framework—namely the assumptions of normality and simple linear correlations. The problems that Black-Litterman seeks to solve are that MVO is sensitive to inputs, when run unconstrained can output concentrated portfolios, and that when investors seek to deviate from market-implied weights, they can do so in an unoptimized manner. RVK spends a tremendous amount of time triangulating the relative accuracy of our capital market assumptions, rather than simply using historical averages. Our proprietary capital markets assumption setting process is designed to address these limitations and, accordingly, we continue to prefer the more interpretable output of the Markowitz Mean Variance Optimization framework.Does your firm utilize liability driven methodology? Please explain.Understanding the liabilities of the plan is a critical aspect of providing asset allocation advice. We find that the term liability driven investing or “LDI" is often misunderstood, however. To us, it does not necessarily mean simply investing in liability matching investments. Rather, it is an additional lens through which to view risk allocation decisions. Our asset allocation tools are capable of measuring both “asset risk"—most typically the variance of returns as well as “surplus risk"—the potential variance between the change in asset values relative to liability values. We believe strongly that it is important for clients to understand both types of risk when it comes to asset allocation decisions. We have worked with some of our largest defined benefit plan clients to closely examine the linkage between asset returns and plan liabilities as there are actuarial methods available to plans that wish to portion off a section of their liabilities into a liability matching investment strategy. We have also built a custom module in-house that allows for Liability Driven Investing (LDI) modeling.Manager SelectionBriefly describe the process and methodology of choosing an investment manager and fund from initial screening through the development of your recommendation.RVK's Investment Manager Research Team conducts initial screening of managers, and the factors they review are broadly summarized into the categories shown below, and onto the following page.Firm: We look for healthy and stable firms that are preferably owned by employees or have strong performance-based incentives. We review ownership structure, regulatory compliance, insurance levels, client base, asset base, etc. Team: We prefer experienced and consistent teams of professionals that are appropriately staffed, but we recognize this can be structured in a variety of ways. We review experience in the industry, experience at the firm, credentials, historical changes in structure, etc.Philosophy/Process: When evaluating a firm's philosophy and process, we look for consistency over time and, most importantly, the presence of a distinct and enduring competitive advantage. Performance: We concentrate our research on firms that have demonstrated consistent performance in line with expectations. Metrics that we evaluate include, but are not limited to, rolling period excess return, volatility, outlier performance periods, and multiple risk factors.Product Assets: We prefer products that have enough assets so that their track record is repeatable at a significantly larger asset base, yet not so large such that the ability to generate excess return is impeded. Moreover, we look beyond current assets to the manager's pipeline of potential new mandates and their propensity to close products, when appropriate, rather than continue to gather assets at the expense of performance.Below, and onto the following page, are the four steps our research group uses when determining a qualified manager for inclusion in our client portfolios.Step 1: Identifying the Universe of CandidatesFor traditional asset classes, the process begins with a quantitative ranking of the investment manager universe. We rank each product using quantifiable measures that represent the key categories listed above: firm, team, philosophy/process, performance, and product assets. The number and specific factors used depend on the asset class. The score for each underlying category is averaged to create a total product score. The full universe is then sorted on a risk-adjusted return basis. While there is no absolute rule for identifying a manager for further research, generally the research group first reviews those managers with superior risk-adjusted returns that also rank well based on our rating methodology. Step 2: Focused List of Final Search CandidatesOnce the initial universe of candidates is defined, we move into a fundamental research process. In this phase, we meet directly with key investment professionals and strive to understand all aspects of the product offering. We analyze each manager's fundamental strategy, including how they select securities, construct portfolios, and implement their sell discipline. We also evaluate the ownership structure of the firm, the tenure of the key decision makers, the evolution of their investment process, and any transition plans that may affect the structure of the firm. Since the process is ongoing, we are also evaluating how firms and products are changing over time.Step 3: Additional Review and Onsite Due DiligenceFirms and products that continue to look promising will be reviewed in context of the other approved products in the asset class. If managers pass this review, the final step is to conduct an on-site (or virtual) visit. Consultants and/or representatives of the research group lead these meetings and follow a consistent framework for interviewing key employees and support processes. Upon the successful conclusion of the on-site visit, a strategy can be approved for inclusion in searches.Step 4: Finalist(s) Manager SelectionWhen arriving at the finalist candidates in a search, we look for firms well qualified for the mandate and for which there is a differentiated better fit in the portfolio relative to the longer list of managers considered. Fee effectiveness is important as is a demonstrated return stream pattern relative to the benchmark, peers, and those who have an appropriate level of risk and relative market behavior in both up and down markets as well as in their combination. In summary, the joint effort by investment consultants and our dedicated Investment Manager Research Team provides unique depth to RVK's due diligence process. By combining client-specific requirements (supplied by the investment consultant) with deep knowledge of approved managers (supplied by the Manager Research Team), we confirm that clients hire managers that are most appropriate for their specific needs.Indicate the source of information for investment manager candidates, CITs, funds, ETFs, etc.RVK's process to source and identify investment managers typically begins with a thorough survey of the investment universe through multiple databases, including Preqin, Preqin Real Estate, eVestment Alternatives, and RVK's proprietary database, RADAR. We also source new managers, or strategies, via the following methods: We continuously review academic and practitioner journals for emerging concepts and strategies.We leverage our longstanding professional relationships with managers to source unique fund opportunities by conducting frequent in-person meetings (we average over 1,000 per year). Managers often preview new products in these meetings. As new managers come to the market, our dedicated Investment Manager Research Team adds them to our in-house databases to make a more robust manager universe.With RVK's standing in the marketplace, and from our sizable client base of nearly 200 clients, we have earned a position where we are frequently on managers' shortlist of calls to discuss funds coming to market. This enables us to create a robust forward calendar and deal pipeline that we can draw from when constructing portfolios. Does your organization conduct on-site due diligence meetings? Please explain. How often do you visit with managers or representatives of the funds used in your portfolios?Prior to the current COVID-19 era, yes. Currently, our team conducts virtual visits whenever possible and we look forward to conducting on-site due diligence once we are able as we see it as an extremely valuable step in the due diligence process. While our Investment Manager Research Team follows a formal review process, our due diligence process is perpetual. Our team averages over 1,000 in-house meetings and over 150 on-site visits per year with both existing and prospective managers. We continually meet with managers approved for investments to identify meaningful changes in strategy, staff, organizational attributes and performance. Through meetings in our offices, conference calls, and on-site due diligence meetings we seek to understand the various aspects of the strategy and how the team is able to produce their returns. When conducting on-site due diligence visits, we seek to: Gain insights into the firm, team, and investment process that are not easily conveyed during other meetings with managers.Meet with various team members, such as portfolio managers, analysts, traders, compliance staff, and operations staff. Meeting with staff face-to-face enables us to evaluate if there is a consistent message or if there are any discrepancies that are not otherwise apparent. Evaluate the quality of the firm's infrastructure, technology, and operational processes. Get a feel for the corporate culture. Are employees happy and do they enjoy working with one another or is there tension and hostility in the working environment? Understand many intangible, but critical aspects of the firm, team, and investment process. RVK consultants are apprised of manager developments via memorandums that are distributed by our Investment Manager Research Team to all investment professionals in the firm, as well as to affected clients. Does your organization classify equity managers and funds by style? If yes, please indicate the style categories your organization uses and what process it uses to determine the manager's/fund's style?Yes. In conjunction with our 22-member Manager Research Team, our client service teams monitor style adherence of managers via two primary ways: (1) a quantitative review process and (2) in-person/virtual manager meetings. As part of this process, we track and evaluate a manager's stated style and compare it to a corresponding benchmark, as well as to the securities held in the portfolio, to determine both the appropriateness and adherence to a given style.For equity managers specifically, we analyze each manager's style characteristics of growth versus value, and large cap versus small cap. The methodology employs both holdings- and returns-based analysis. After completing the evaluation for each manager we compare the results to broad equity market indexes. This analysis frequently reveals the presence of previously unknown style tilts in client portfolios which we communicate to clients.Please see below for a detailed listing of the various styles that we use to categorize equity managers, including actively managed products and passively managed products:All (Broad) Cap CoreLarge Cap ValueLarge Cap CoreLarge Cap GrowthMid Cap Value Mid Cap CoreMid Cap GrowthSmall/Mid (SMID) Cap ValueSmall/Mid (SMID) Cap CoreSmall/Mid (SMID) Cap GrowthSmall Cap ValueSmall Cap CoreSmall Cap GrowthHow does your organization verify the validity of limited partnership and separate account managers' performance records?Our research team validates separate account managers' performance records during actual meetings with managers. More often than not, the senior portfolio management professionals they meet with are not the people who complete the database on behalf of the firm, thus our meetings help to reconcile data from two different sources at the manager. We also cross-check returns entered into the databases to verify they are consistent with returns that managers show in their GIPS-compliant presentations.? For funds of hedge funds specifically, our team also verifies that the funds are independently audited as industry practice is for a firm to have their funds audited on an annual basis. For real estate managers, we verify data through our independent stress-testing as well as through third-party verification. We also conduct reference checks and spot checks of significant investments made by the manager. We verify that proper calculation of IRR and time-weighted returns are conducted as well as reviewing the net equity multiple, which best demonstrates the quality of the manager's returns and is also the most difficult type of performance metric to manipulate. We have found that many managers use various "tricks," including purchase of assets using subscription facilities, to artificially inflate IRRs. Therefore, we rely on net equity multiple in concert with IRR when evaluating a manager's performance.What is your position relative to active and passive investing?Using active managers selectively is a key element of our investment philosophy. Our view of active and passive investing depends substantially upon the asset and sub-asset class being considered, the allocation of active risk elsewhere in the portfolio, as well as the risk tolerance of the client. We conduct an annual active versus passive study containing adjusted net-of-fees universe comparisons, and the most recent study shows that the most effective asset classes for passive strategies tend to include domestic large-cap and mid-cap equities. Conversely, core plus fixed income, small-cap US, and international equities tend to offer institutional investors a higher probability of returns commensurate to active risk taken. ?While active management has been able to add value in certain sleeves within US equity, non-US equity, and fixed income, there is no definitive answer to the active/passive debate. We have observed highly effective active managers in asset classes that are generally viewed as efficient (i.e. large cap equities). From a risk-budgeting standpoint, however, we prefer to systematically allocate the active risk of a portfolio to where it is most likely to be effective. We use rigorous asset class-based mean benchmark analyses to create optimal asset class structures using both passive and active mandates where applicable.?RVK may recommend decreasing active management exposure should our conviction in the ability for active managers in a particular asset class to broadly add value materially decline (supported by data over longer periods of time). Additionally, RVK believes active management is more likely to add value in market environments where volatility is elevated. That said, RVK believes the decision to engage active managers in a portfolio should be informed by active risk taken across the portfolio, including private markets, plan sponsor tolerance for potentially prolonged periods of underperformance, and the fee budget of the plan. RVK believes there is no single best approach to the use of active management and is heavily informed by the asset allocation and asset class exposures present in the plan.Do you use multiple funds or managers for larger sleeves such as Large Growth, Core or Value?Our decision to recommend multiple funds or managers for larger sleeves, such as Large Growth, Core, or Value depends on each client's situation. RVK takes a holistic approach to each client's portfolio where the trade-offs between sub-asset class diversification and manager selection are evaluated at the asset class and portfolio levels. When working with a client to construct a portfolio, the nuanced decisions related to market capitalization, style, and regional allocations warrant careful consideration. When appropriate, we consider deployment of complimentary managers within single asset classes. However, we also discuss with clients considerations related to optimally allocating between passive and active managers in each asset class as active management may be more successful in some sectors than others. We also incorporate analysis related to the trade-offs of over-diversification within an asset class, as smaller allocations may be subject to higher fee burdens. Our dedicated 22-member Investment Manager Research Team is actively involved in these conversations and is mindful of ensuring that over-diversification does not unintentionally undermine the positive effects from investment manager selection and contribution to overall portfolio performance.???? ??For portfolios of a similar size as the City of Burlington's pension plan, what types of investment vehicles (as shown below) would you use, and what percentage:CITsMutual FundsETFsIndividual bondsIndividual stocksLimited PartnershipsSeparately Managed Accounts (SMA)Other (explain)RVK recommends investment vehicles and managers based upon their overall fit within a client's current portfolio as well as their ability to help a portfolio achieve its long-term goals and return objectives. Every client is unique; therefore, we consider the specific client objectives when recommending investments and which vehicles to employ. When working with our clients and deciding on optimal investment structures and opportunities, our discussions often include, but are not limited to:Considerations of portfolio liquidity; Opportunity, operational, and manager costs; Near- and long-term investment goals; Asset size; and Implicit/explicit benefits and risks of investment types and structures.From a portfolio construction standpoint, we recommend a diversified approach and that clients outsource individual security selection to asset managers. Accordingly, we would not advise clients use individual bonds or individual stocks as an asset allocation tool. While ETFs have gained much notoriety in the retail space, they tend to be a more expensive option when compared to other vehicles in the institutional landscape. However, in special circumstances or in the case of transition management, we believe there may be a role for ETFs within an institutional portfolio.Performance Measurement and EvaluationDescribe your organization's approach to monitoring and evaluating portfolio performance, risk, investment style and individual investment managers for your clients. Please discuss how you benchmark the managers or funds.We believe the most relevant method for monitoring and evaluating portfolios—in terms of performance, risk, investment style, and individual managers—is to examine them at multiple levels including, but not limited to: Plan/portfolio;Asset allocation;Asset class (including composites); and Individual managers.This multi-level analysis begins with an evaluation of performance relative to appropriate and well-constructed benchmark and peer groups. In isolation, peer comparisons at the total plan level do not typically give a clear picture of how the total fund has done without also taking into consideration its unique circumstances and how the fund has performed versus an appropriate benchmark. Evaluating performance versus both benchmark(s) and peers, through the lens of each plan's unique objectives, is where asset allocation differences and manager selection become a more critical consideration. We believe both measures are needed to understand relative performance.At the asset class level, peer comparisons attempt to measure how well the collection of managers within that asset class performed as a whole. In conjunction with the benchmark, the effectiveness of the manager structure can be measured. If over market cycles, or long periods of time, the asset class does not perform well versus stated objectives, peers, or the index, steps should be taken to re-evaluate the structure and thesis behind creating it to adjust for changing market conditions and hopefully enhance asset class returns going forward.At the individual manager level, peer comparisons may be the most instructive as they attempt to isolate how an individual manager performs versus other managers in the same asset class. Therefore a manager with a ranking in the top quartile has clearly outperformed most of its peers. Additionally, benchmark comparisons may also be useful as an indication of how well the benchmark ranks in the same peer group. We typically find that a well-developed Investment Policy Statement can be very helpful in establishing critical performance thresholds and monitoring structures. Our quarterly performance reports facilitate regular performance benchmarking analysis. That said, it is always critical to understand the stated objectives of each respective manager, and to confirm that the philosophy and process is well known by the board/committee/staff and consultant to understand why tracking error to either the peer group or benchmark may exist—making sure to always concentrate on risk-adjusted performance. BenchmarkingThe cornerstone of our benchmarking approach is our belief that performance monitoring is constantly evolving and subject to change. Rather than using default benchmarks recommended by managers, we independently explore quantitative (R-squared, for example, is a common and useful metric we use in benchmark analysis) and qualitative metrics to determine the most suitable benchmarks for a client's managers. Occasionally, we find that the manager-recommended benchmark is not the most insightful; therefore, the key questions we seek to answer when selecting a benchmark are:What benchmark best reflects the current, historical, and prospective strategy employed by the manager?When designing a customized benchmark/policy portfolio for an individual client, what is the appropriate subset of benchmarks and relative weighting?What is a manager's long-term, targeted style tilt?Once we select an appropriate benchmark, we leverage our performance measurement system, PARis, which has access to over 1,600 individual benchmarks for every major asset class. If selected for this mandate, RVK will work collaboratively with members of the Board to determine relevant benchmarks for the managers in your portfolio. How often does your firm review an investment manager's performance?As a firm, RVK typically reviews investment manager performance on a quarterly basis via client performance reports. For clients choosing to receive additional monthly “flash” reports, we review manager performance on a monthly basis. We also have a real-time view of a client's portfolio and their associated market values via our third-party data provider, Insignis, which interacts with custodian banks on a daily basis and receives daily data feeds. While this data is considered unaudited until month-end, it provides critical insight into our clients’ portfolios between formal reporting periods.Many of our clients choose to include formal manager due diligence reviews in their Investment Policy Statements as well as indicating investment manager responsibilities related to additional performance reviews, audits, and monitoring activities. Your RVK team will work with the firm’s Manager Research Team to incorporate additional manager reviews beyond the structure of our performance reports. Explain what would cause you to recommend a manager or fund to be terminated? Also explain what would cause you to place a fund or manager on Watch?If an investment manager is underperforming (either on an absolute or relative basis), we attempt to identify the source of underperformance and look beyond the raw returns to gain an understanding of why a manager has underperformed. We tend to avoid knee-jerk reactions in immediately recommending termination merely based on short-term underperformance. We tend to be cautious about recommending changes away from underperforming managers over shorter periods of time that are characterized by a single market direction (up or down), especially if we understand and expect a manager's approach to trail in that particular type of environment. RVK recognizes that active investment managers who stay true to their investment strategy and style are bound to have periods of underperformance as market drivers of return vary.The decision to recommend terminating a manager is often a difficult one, and RVK believes the decision should rest on the determination as to whether a manager can and is likely to meet a client's expectations in the context of the overall portfolio strategy and the role played by that manager. RVK routinely works with clients to address this key question, and will not hesitate to recommend termination if the criteria shown below persists for a significant amount of time.Significant changes in an investment team;Changes in investment philosophy or approach;Significant loss of assets or change in the manager's business; andConsistent performance below benchmark or median over longer time periods and particularly in market environments known to be receptive to their investment philosophy and methods.If the determination is made to replace an investment manager, RVK provides the client with a recommended investment fund lineup and offers guidance in asset mapping and transfer processes. We often assist our clients in the use of transition management services, which can be provided to assist with the planning for, and implementation of, the transition from one manager to another. We then provide ongoing monitoring of the transition until it is complete.Briefly describe your organization's reporting system and the components of your performance reports. Please explain the extent to which these performance reports can be customized to meet a particular client's needs.RVK uses in-house performance monitoring and reporting tools to compute, track, and evaluate investment performance for our clients. These reporting tools are available through our purchased performance measurement system, PARis (Portfolio Analytics & Reporting Information System) and through our proprietary alternative investment performance reporting system, AltInvest. Both PARis and AltInvest use data received from investment managers and custodial banks to calculate and create our performance reports. PARis is a third-party software system, engineered by Investment Metrics, that provides our team of investment analysts with access to over 6,000 separate accounts and commingled funds, over 24,500 mutual funds and more than 1,600 benchmarks. The system produces performance measurement, risk attribution and streamlined presentation-quality reports on traditional investments at the total fund, sub-composite, and manager level.When reporting performance, our objective is to present data and analyses that drive decisions. In this regard, we believe the depth of analysis is equally important to the simplicity of a presentation; therefore, both a person with limited investment experience and a highly sophisticated investor are able to understand our reports and presentations. In terms of content, please see below for a listing of the various analytics included in our performance reports:Capital Markets Review Executive Summary Investment Policy Review Performance versus Benchmarks and Peer Groups at the Asset Class and Manager levelReturns-Based Statistics and Style AnalysisDomestic and International Equity Manager Portfolio Characteristics Domestic and International Fixed Income Manager Portfolio Characteristics and Sector AllocationFee Analysis – On a quarterly basis, we generate comprehensive fee analyses for a portfolio’s investments. By using Morningstar and eVestment peer group data, we rank investment managers' fees against an appropriate universe.Central to our performance measurement system is the fact that we create reports fully customized to meet our clients' individual needs. When a client requests customization in their report, we bring the request directly to Investment Metrics, our software provider, for implementation. We can typically implement customized report requests immediately, depending on the scope of the request and if we have all the necessary data available. We will customize your performance reports to the highest degree we are able. Please see page 164 for a sample performance report for a client similar in size to the City.Describe the types of analysis and investment performance comparisons included in a typical performance evaluation report. To what extent does your organization provide analysis of year-to-year changes? How does your organization monitor and report performance data that is typically delayed, i.e., LPs. Are there any performance adjustments that you use to compensate?We include an extensive number of analytics in our performance reports. We provide performance for a client’s total fund, asset classes, and managers for the following periodicities:Quarter-to-DateCalendar Year-to-Date Fiscal Year-To-Date (client specific)1-, 3-, 5-, 7- and 10-Year Rolling ReturnsCalendar-Year Returns Since Inception (client specific) Pertaining to benchmarks, we use those shown below to compare a client's total fund, asset class composites, and underlying managers:Total Fund Target Allocation Index – We suggest measuring the gross-of-fees performance of the total portfolio against the combined indexes that represent the passive return for the underlying asset classes. For example, we will likely use the Russell 3000 Index to represent the passive return for the US equity portion of the portfolio. The purpose of this benchmark is to measure the degree to which active management has impacted performance. It also is used to benchmark the performance of the total fund versus peers with similar investment objectives.Asset Class Composite Index – For each distinct asset class in a portfolio, we recommend measuring the performance against a broad asset class index. The purpose of this benchmark is to measure the degree to which asset class biases (e.g., overweight to large cap or value stocks) and active management add or detract value.Investment Manager Benchmarks – For each investment manager, we suggest measuring the net-of-fees performance against at least one benchmark that properly reflects the manager's underlying strategies. While these benchmarks are often identical to those recommended by managers, they sometimes are not. The purpose of these benchmarks is to assess whether the manager adds value relative to a passively-managed investment option and whether the manager's performance is appropriate relative to their stated objectives.In addition to benchmarks, we also provide plan sponsor, asset class, and vehicle-specific peer groups in performance reports to allow for a consistent and measurable comparison when ranking a client's total fund portfolio and investment managers. We can create custom peer groups that capture a client's performance and compares it to similar client types, size, and asset allocation to provide a closer comparison of a client's portfolio.For Limited Partnerships and other fund structures that may result in valuation lags, a member of our dedicated Performance Measurement group will update market values with any intra-period cash flows to calculate the current period values and retroactively update any data from statements received since the last reporting cycle. Alternatively, some of our clients simply choose to view no returns for periods in which we have not yet received updated returns. What is your organization's typical turnaround time for the preparation of such analysis?On an ongoing basis, quarterly performance reports are typically available 30 calendar days following quarter-end while monthly performance summaries, if requested, are typically available 10-15 calendar days following month-end.Are rates of return routinely presented on a net of fee basis?Rates of return can be presented on both a net of fee and a gross of fee basis, depending on client preference. Some alternative investments with implicit or asset based investment manager and administrative fees are presented as gross of fee returns, adhering to industry standards.Databases:Please describe the databases your firm uses?RVK’s reporting tools are available through our purchased performance measurement system, PARis (Portfolio Analytics & Reporting Information System) and through our proprietary alternative investment performance reporting system, AltInvest. Both PARis and AltInvest use data received from investment managers and custodial banks to calculate and create our performance reports. PARisPARis is a third-party software system, engineered by Investment Metrics, that provides our team of investment analysts with access to over 6,000 separate accounts and commingled funds, over 24,500 mutual funds and more than 1,600 benchmarks. The system produces performance measurement, risk attribution and streamlined presentation-quality reports on traditional investments at the total fund, sub-composite, and manager level.AltInvestAs part of a client’s quarterly performance report, RVK prepares a supplemental alternatives report generated by AltInvest that provides an up-to-date review of the client's alternative investments. The information and metrics contained in this report include Commitment, Paid-in Capital, Distributions, Valuation, annualized since-inception IRR, Fund Multiple, and Index IRR for each underlying investment, sub-asset class, vintage year, and on an aggregate level. The Index IRR represents the dollar-weighted returns calculated using an applicable broad market index assuming an index investment with the same cash flow pattern and timing as the investment/portfolio. These reports also contain quartile ranks for investments. AltInvest enables our Investment Analysts to track all historical cash flows along with monthly and/or quarterly capital account balances (NAVs). The cash flows are tracked not only on a contribution and distribution basis, but are also broken down to the specific type of cash flow, enabling us to more accurately report on the funds remitted to satisfy management fees, funds contributed for specific deals, and so forth. The same is true for distributions: we track return of capital, gains, and income among other cash flow types. InsignisRVK also uses Insignis, an online third-party database, to collect custodian data for our clients. Insignis receives daily data feeds from approximately 35 custodian platforms, and the data is imported electronically into our performance reporting system. Is the database proprietary to your firm or purchased?AltInvest is proprietary to our firm while PARis and Insignis are purchased third-party systems. If purchased, how many do you use and for what purposes?PARis and Insignis are the only purchased systems we use for performance reporting. Please see the following question for a complete list of third-party databases we use.How many investment managers are in your database(s)?PARis contains over 6,000 separate accounts and commingled funds and over 24,500 mutual funds. With regard to our manager research databases, please see the chart below, and onto the next page, for detailed information on each database. DatabaseDescription# of Firms# of ProductsProprietary DatabasesRADARProprietary alternatives database for HFOF, Real Estate, and Private Equity. Tracks qualitative as well as performance data.323845Manager Evaluation DatabaseProprietary qualitative comments database for both traditional and alternative strategies.4,7178,761Third-Party DatabaseseVestmentInternet-based database for traditional and alternative asset classes. Includes performance as well as qualitative data.2,08015,186Morningstar and Morningstar DirectMultiple Morningstar applications providing?access to?mutual fund, commingled fund,?separate account, and stable value fund?data.N/A409,600+ products available from their global investment databaseCrane Money Fund Intelligence DatabaseThird party data provider that collects and distributes money market mutual fund data, industry news and trends.681,188DatabaseDescription# of Firms# of ProductseVestment AlternativesHedge Fund database accessed through eVestment. Contains performance and qualitative data.2,4008,000Hedge Fund ResearchThird-party database of hedge fund firms and strategies. Contains performance and qualitative data.2,5007,500PreqinInternet-based database for alternative asset classes including private equity, real estate, hedge funds, infrastructure, private debt, secondaries, and natural resources. Fund statistics and performance data.26,66549,598If you maintain your own proprietary database, how does your firm gather, verify and analyze the data collected on managers for the database(s)? Include name of any external sources.Managers in our databases are reviewed on a quarterly basis. As new managers come to the market, we add them to our in-house databases in order to make a more robust manager universe. Our Manager Research Team also reaches out to new (or not yet included) managers to make them aware of our proprietary and purchased research databases. Institutional quality managers are very aware of RVK and the third-party research resources we use, and they are highly incentivized to get their information out to the investor community through efficient resources such as third-party databases.As previously mentioned, our research team verifies manager information in these databases during actual meetings with the managers. More often than not, the senior portfolio management professionals they meet with are not the people that complete the database on behalf of the firm so our in-house meetings help to reconcile data from two different sources at the manager. We also cross-check returns entered into the databases to verify that they are consistent with returns that managers show in their GIPS-compliant presentations. When calculating performance for our clients’ portfolios, our Investment Analysts input data from investment managers and custodians into our performance systems to calculate a monthly return. Returns are then reconciled with investment managers and/or custodian reports to verify the accuracy of data received from each entity. We strive for accuracy in our clients’ performance reports by calculating performance out to four decimals and by working with managers and custodian banks to alleviate any discrepancies. Describe your screening process and capabilities.As previously mentioned, RVK's 22-member Manager Research Team conducts initial screening of managers. The factors they review are broadly summarized into the categories shown on the following page. Firm: We look for healthy and stable firms that are preferably owned by employees or have strong performance-based incentives. We review ownership structure, regulatory compliance, insurance levels, client base, asset base, etc. Team: We prefer experienced and consistent teams of professionals that are appropriately staffed, but we recognize this can be structured in a variety of ways. We review experience in the industry, experience at the firm, credentials, historical changes in structure, etc.Philosophy/Process: When evaluating a firm's philosophy and process, we look for consistency over time and, most importantly, the presence of a distinct and enduring competitive advantage. Performance: We concentrate our research on firms that have demonstrated consistent performance in line with expectations. Metrics that we evaluate include, but are not limited to, rolling period excess return, volatility, outlier performance periods, and multiple risk factors.Product Assets: We prefer products that have enough assets so that their track record is repeatable at a significantly larger asset base, yet not so large such that the ability to generate excess return is impeded. Moreover, we look beyond current assets to the manager's pipeline of potential new mandates and their propensity to close products, when appropriate, rather than continue to gather assets at the expense of performance. RVK’s research professionals are an integral part of the firm’s team philosophy, and clients have direct access to their expertise. Collectively, our research team has the following credentials:An average of 18 years industry experienceAn average of 11 years with RVK 6 CFA charterholders4 CAIA certifications 1 FRM1 CQF Additionally, many of our research professionals have direct asset management employment experience, as detailed below, and onto the following page, providing a broad institutional perspective for the benefit of the City. Joe Ledgerwood, CFA – Director, Investment Manager Research Prior to joining RVK, Joe worked for a Portland-based registered investment advisor as a portfolio manager, research analyst, and trader.Amy Hsiang, CFA, CAIA – Director, Traditional & Alternative Credit ResearchPrior to RVK, Amy worked for PIMCO as an account manager and a product manager with exposure to various alternatives strategies and long/short credit funds. Steve Hahn, CFA – Director, Alternatives Research Prior to RVK, Steve gained management experience while working at a private equity fund of funds in sourcing fund opportunities, conducting fund due diligence, constructing portfolios, and monitoring investments. He also served as a member of the firm's investment committee. His experience includes distressed securities, timber, energy, private equity, and venture capital.Joseph Delaney, CAIA, FRM – Manager Research ConsultantPrior to RVK, Joe worked at PIMCO where he was a Senior Associate Portfolio Manager. He has an extensive background in investment management on the buy-side and spent five years building out PIMCO's equity suite and liquid alternative strategies.Austin Head-Jones, CFA, CQF – Manager Research ConsultantAustin previously worked as an Associate Director for PAAMCO, where she researched credit-focused hedge funds. Reed Harmon, CFA – Manager Research ConsultantPrior to RVK, Reed served as an analyst and was responsible for manager research in fixed income and alternatives. He was also involved in fixed income portfolio construction and asset allocation as an investment committee member at a registered investment advisor. Reed's experience includes multi-manager liability-matched bond portfolios, currency overlay strategies, direct lending, diversified inflation strategies, and global tactical asset allocation.Sam Kavehrad, CAIA – Manager Research ConsultantSam previously spent six years at a hedge fund of funds where he focused on manager sourcing, due diligence, and ongoing evaluation. His experience extends across long/short equity & credit, event-driven, activism, relative value, and global macro hedge fund strategies.Alexander Leiken – Manager Research ConsultantPrior to joining RVK, Alexander worked at Fisher Investments as a Client Services Associate. He was able to gain valuable experience acting as the department's custodian Point of Contact while working with Fisher's Investment Counselors to service high-net-worth clients. Should we be hired for this mandate, members of the Board will have direct access to these professionals, as well as our entire 22-member research team, as they assist with manager due diligence, hiring, monitoring, and termination. How many managers are actively monitored?RVK actively monitors more than 450 approved products across 160 firms, covering all major asset classes. Risk ControlDoes your organization assist clients in developing individualized, written investment manager guidelines? If so, attach a sample of such guidelines for a domestic equity manager and for a domestic fixed income manager.RVK frequently assists clients with preparing contractual guidelines for individual investment managers, inclusive of separate accounts, as well as regular compliance reviews of those investment managers, which can include an evaluation of style consistency, on both a holdings- and returns-based basis. In determining specific investment manager guidelines, we consider the purpose and objective of the mandate and the makeup of its investable universe. Doing so allows us to construct guidelines and policies that allow managers sufficient latitude to execute their strategies without taking on unnecessary risks to the portfolio. Examples of certain investment guidelines may include limitations on individual position sizes for equity securities, sector restraints, or restricted exposure to individual issuers of debt securities so that the appropriate level of diversification among securities is maintained. While these granular guidelines are often housed within an investment manager agreement, which we work collaboratively with clients and investment managers to refine, we also assist our clients in integrating certain investment guidelines at the investment policy level, within the Investment Policy Statement. The IPS represents the foundation upon which all investment decisions are made and defines goals, constraints, and clear implementation guidelines. Accordingly, we spend considerable time on an ongoing basis to confirm that investment policy guidelines are up-to-date, followed, and continue to serve the objectives.Please see page 225 for a sample manager guidelines document, which includes guidelines for domestic equity and domestic fixed income, among other asset classes.Please explain how your organization measures and analyzes relevant financial characteristics regarding each manager's account and funds, and the entire fund portfolio in order to detect and control risk.Our firm measures and analyzes relevant financial characteristics via multiple metrics that are offered in our standard quarterly performance reports. The reports provides risk and return metrics for each investment option, benchmark, peer group, and the overall client portfolio. We also consistently monitor manager performance to verify that appropriate levels of benchmark risk are maintained. Our performance reports include the risk measurements listed below. Standard Deviation (a measure of total risk)Sharpe Ratio (a measure of risk-adjusted performance using total risk)Beta (a measure of market risk)Downside Risk Tracking Error (a measure of volatility of excess returns vs. benchmark)Information Ratio (a measure of consistency in performance) Excess RiskAdditionally, RVK has implemented the FinAnalytica models through RiskPlus powered by BISAM in our risk management processes. This model produces annual total portfolio risk evaluation using non-normal modeling and allows us to generate useful measures when evaluating portfolio risk, such as: Contribution to risk Expected Tail Loss (ETL)VaRETLExpected Tail Return (ETR)Rachev Ratio (ETL/ETR)STARR Performance (Excess Return/ETL)Factor ExposureImplied ReturnsRobust CorrelationsThis is not an exhaustive list of the metrics available within our reporting system, and the City will have the opportunity to review additional metrics and decide if they should be included in the final report format.How do you manage for extreme left-tail risk? Do you consider Value at Risk (VaR) or Conditional Value at Risk (CVaR)?We incorporate a "fat left tail" in our Monte Carlo simulation process, which accounts for events such as the global financial crisis and the tech bubble of the early 2000s. While traditional modeling captured these events to a certain extent, we believe a non-normal distribution does a better job of truly addressing this. A natural output of this process can include both VaR and CVaR. How do you define risk for a defined benefit plan? How do you help sponsors mitigate that risk?As a firm, we believe there are multiple types of risk. Each type of risk requires different methods for assessment, different metrics for measurement, and different approaches for mitigation. Addressing or targeting only one type of risk, no matter how successfully done, can leave a fund at the mercy of other types of risk. RVK is experienced with the various types of risk and has embedded the continuous assessment and monitoring of such risks in our team consulting services. The types of risk we monitor at the total fund level of public pension funds include:Total fund volatility – How volatile is the return stream of the fund likely to be, given its investment strategy?Benchmark risk – How likely are the fund's returns and asset values likely to diverge from established benchmarks?Liquidity risk – How liquid is the fund's asset allocation and deployment to specific investments in both normal and extreme market environments?Equity beta – How closely correlated is the return stream of the total fund to the equity market, a substantial source of volatility?Operational risk – How tightly executed and monitored are all the operational details of the fund's management, particularly cash flows and performance reporting?Fiduciary risk – What is ethical and fiduciary framework embedded in the Investment Policy and is it periodically monitored?Leverage risk – Are fund's returns due to the use of leverage in underlying investments?Inflation and/or interest rate risk – How sensitive might the fund's returns be to substantial, sustained changes in inflation/interest rates? By running sensitivity analyses, RVK can simulate the effect of parallel interest rate changes and provide an understanding of the range of potential outcomes to a portfolio based on interest rate movements.Tail risk – How would the fund's returns be affected by "left tail events"?Political/headline risk – Is there a negative view of the fund by the press and/or the public?Risk reporting should be integrated and viewed as a vital piece of a client's total fund portfolio management, thus we work closely with clients to assess their risk appetite. At the asset class level, most of these same risks apply as well as duration risk, credit risk, term risk, and sector risk. Taken as a whole, risk assessment, measurement, and mitigation is an integrated part of our consulting practice and the services we provide to clients.What do you consider the critical success factors for a de-risking strategy?For funds moving from a traditional model to a de-risking strategy, we consider timing to be the most critical factor for success. Timing in this sense is determined largely by market forces and fund dynamics, defined by many variables including; the City's liability structure, participants' contributions, beneficiaries and distributions, and investment objectives. At the portfolio level, as a fund matures, the asset allocation structure shifts from capital appreciation to capital preservation where the investment horizon is assumed to shorten and the tolerance for market volatility shifts to a mindset more focused on funded status volatility. Key factors for success in managing this transition include, but are not limited to: Liquidity needs;Liabilities;Composition and allocation to illiquid alternative investments; and Cash flows. Public securities offer liquidity benefits, but may also introduce more volatility within a portfolio. These factors may be offset or mitigated through diversification with alternative investments. Within a portfolio structure and the alternative investments allocation, considerations are given to the diversification and low-correlation benefits of non-public investments. Depending on a client's unique context, the feasibility and cost/benefit analysis of using alternative investments may vary. As such, RVK is careful to take into account all of these elements when de-risking a portfolio and an investment strategy.Describe the optimization or risk management techniques used in the portfolio construction process. Detail strategies employed to prevent excessive volatility.At the policy level, RVK's risk control strategies begin with a "top down" approach focusing on risk preference setting for the entire portfolio in the context of its investment purpose. Using various tools such as asset allocation optimization, Monte Carlo analyses, and risk budgeting via mean benchmark optimization (MBO), we review the risk associated with various portfolio structures and assist clients in matching risk to investment objectives, taking into consideration the risk preferences of the fiduciaries. Because of our experience at the operational level, we also engage in a "bottom up" risk control review that encompasses recordkeeping and custodian use and performance standards, securities lending risk controls, derivatives exposure and compliance reporting, audit trails, manager contract reviews, and manager monitoring to reduce risks in every way possible. We have been called upon by major clients to do risk analyses, stress testing and/or compliance review for specific areas or funds, including cash management (STIF vehicles), securities lending collateral pools, and derivatives usage.How does your approach differ for plans that are closed versus active?How do you propose meeting periodic cash flow needs?Our role as an investment consultant is to understand each client's investment objectives and constraints, and to offer recommendations on the most appropriate investment strategies and funds. Consistent with our approach to investment consulting, we believe it is best to be process-driven and take deliberate steps in managing risk for closed or frozen plans. A closed or frozen plan with a mature participant population will likely have a much shorter investment horizon, and as a result, may have a lower risk tolerance and, therefore, a greater emphasis on liquidity. In these cases, we recommend against using certain illiquid asset classes (e.g., private equity) and are more selective in our use of active managers due to the potential for high tracking error. LiabilitiesThe first step to managing risk for a closed plan is to gain a full understanding of the plan's assets, liabilities, and projected demographics by reviewing the most recent actuarial valuation report and holding discussions with the board, committee, or staff to gain insight and perspective on the portfolio design before making recommendations related to the investment strategy.Depending on the last time an asset/liability study was conducted, completing such a study would likely be the next step. These studies are unique in their ability to combine in a single analysis the three critical factors driving the financial health of a portfolio—benefit policy (liabilities), contribution policy, and investment strategy (asset allocation). Understanding a portfolio at this depth can help determine the best course of action moving forward.Payout RatioAn important aspect to monitoring a closed plan (either hard or soft closed) is the portfolio's payout ratio (benefit payments/assets). As the number of retirees/beneficiaries grows relative to active participants and a portfolio's cash flow deficit increases, greater focus on the contribution policy and balancing the investment structure to meet a rising call on capital (increased annual benefit payments) while attempting to meet an appropriate risk-adjusted return goal becomes more and more critical. Sustained increases in payout ratios can potentially impose liquidity constraints on the management of the portfolio (inhibiting the ability of the Plan to invest with a long-term horizon) therefore limiting the opportunity to invest in less liquid asset classes regardless of the return or risk reducing diversification benefits they may offer. The asset allocation will depend on key factors such as the contribution policy, changing benefit levels, the assumed actuarial rate of return, and forecasted capital market returns.Meeting Cash Flow NeedsRVK seeks to help clients understand the tradeoffs between extending liquidity and increasing returns, in the context of each client's unique cash flow needs. Though difficult to quantify, we recognize that the valuation smoothing effect inherent in illiquid assets is likely to limit their downside capture to equity markets during periods of market stress. This often causes allocations to less liquid assets to deviate significantly from targets, at least in the short term. The issue can be exacerbated as a portfolio is forced to sell liquid assets to raise cash. Making sure clients understand and are comfortable with these risks is a key component in determining the percentage of the portfolio allocated to illiquid assets.Portfolio LiquidityIn addition to these qualitative considerations related to risk preferences, RVK recommends allocations to less liquid assets based on the results of our in-depth asset class assumptions process, which continues to provide support for investments in private equity, private debt, real estate, and less liquid hedge fund strategies for investors who can tolerate illiquidity. Our manager research professionals speak with hundreds of general partners and investment managers each year, informing our broad understanding of the asset classes. In some cases, we may work with clients to determine if a very small cash allocation (~1%) might make sense in a portfolio to help smooth inter- and intra-month cash flows where seasonal and pay period variability may impact cash management and reduce the need to liquidate other investments.Transition ManagementIn light of the five LPs in the current Plan, describe how you would transition the assets to your recommended portfolio and custodian?We use a "renovation versus tear down" approach when initiating new client relationships. Manager and security transitions can be costly; therefore, we spend time evaluating what is working well in a portfolio, how the current portfolio aligns with current and forward looking investment beliefs and allocation decisions, and what could be improved. Whenever possible, we seek to "renovate" portfolios rather than tear them down.The potential role of transition management within a new relationship varies widely. While RVK does not provide in-house transition management services or independently direct or execute the directed or discretionary trading services involved in portfolio asset transitions, we do provide analysis, support, and oversight services related to the transition management services provided by one or more specialized vendors under contract. RVK works with our clients' staff, custodian, banks, and other third parties to assist in the execution of portfolio investment transitions, including, but is not limited to: considerations related to the complexities of liquidating and reinvesting a portfolio's assets, providing rebalance and transition worksheets, and service provider communications. As an additional important note, RVK does not require that clients use a specific custodian. RVK maintains specialized resources in our Investment Operations Solutions Group focused on vendor research relationships, including custodians, and works to support clients’ independent retention and relationship oversight related to an institutional custodian relationship. We understand that the plan is currently transitioning its relationship from US Bank to Zions Bank. RVK has a common relationship Zions Bank and would stand ready to support this relationship or alternatives as determined by the Plan. ????The existing portfolio (including potentially less liquid alternative investments in limited partnerships) will be assessed early on in our work plan. This work plan will include 1) a review of investment policy objectives, 2) a review of asset allocation, 3) a review of asset class structure and manager implementation, 4) development of strategic and tactical recommendations related to the portfolio, 5) development of an implementation plan which may involve retention, termination, and mandate size changes related to existing mandates paired with new mandate needs, and 6) implementation strategy execution which may involve updates to existing mandates, manager searches, and the cost-effective and risk-managed implementation of mandates. The five existing limited partnerships in non-traditional or alternative investment asset classes present some complexity which would be taken into account within any resulting asset allocation or investment portfolio transition recommendation provided by RVK. We observe that traditional and/or public market securities frequently have greater liquidity during normal course portfolio management and restructuring transactions than private and alternative?investments. The role of the private equity, real estate, and timberland asset classes, and current implementation within the existing portfolio would be subject to a thoughtful review by RVK in tandem with the Committee. Some relevant considerations may include liquidity gates and lock-up periods, liquidation penalties, and notification periods. What extra costs would be involved?If the asset allocation and implementation approach with current mandates is affirmed as a result of this thoughtful analysis, the transition process for limited partnerships would be straightforward and would be accompanied by limited or no portfolio cost. The process requirements would be expected to be limited to ensuring that the limited partnerships were appropriately established for custodial reporting and/or reflection within statements (or otherwise supported with direct statement delivery to RVK). If the asset allocation and implementation approach with current mandates suggests a long-term strategic and/or tactical change, the transition process for limited partnerships may be limited to documenting available liquidity schedules and processes, documenting secondary market liquidity options, and considering portfolio risk exposure management options prior to a restructure (such exposure tools, if available and prudent to implement, may include portfolio hedging transactions). The costs (including opportunity costs) associated with such restructuring activities may vary widely by option selected by the City. ?Fundamentally, the establishment of a legacy liquidating portfolio allocation for illiquid investments with a longer time frame for restructuring may be necessary as well. RVK is committed to supporting with a full review of these options and cost considerations in consultation with the City. The pace of renovating a client's portfolio is determined by our clients' preferences, capacity for new manager searches and due diligence, and investment structures of the legacy portfolio. RVK maintains dedicated resources within our capital markets research, investment manager research, and investment operations teams to support our proposed client service team. RVK will offer a wide range of thoughtful and well documented options related to both strategic and tactical transition activities that may result from the assumption of the consulting mandate by puter and Technical CapabilitiesDescribe the software and hardware that will be used to support the proposed work plan.RVK has made significant investments in enhancing technology used in the production of our reports. Our Investment Analysts use Dell Windows 10-based computer workstations that are updated on a regularly scheduled three-year interval. All digital assets are tracked and managed electronically. Additionally, we secure our workstations with two-factor authentication.Please see below for a list of all systems used by RVK's investment professionals to service clients. These systems grant us access to information on market data, as well as thousands of indices, peer groups, firms and products across all asset classes.?RVK Online Portal – Website for clients to retrieve current and historical materials as they relate to their portfolios. Customer Relationship Management (CRM) – Database for firm-wide use that contains client data.Investment Manager Data Manager (IMDM) – Proprietary database for investment managers to enter monthly and quarterly data for our clients.Portfolio Analytics & Reporting Information System (PARis) – Purchased system used by our Investment Analysts for the production of performance reports.Bloomberg Professional Service – Terminal computer system that enables RVK to monitor and analyze real-time financial market data movements.FactSet – Terminal computer system that provides?financial data and analysis?on global markets, public and private companies, and equity and fixed income portfolios.Insignis – Custodian data aggregation database that streamlines custody data and statements.SONAR – Proprietary database used for research and data aggregation for service provider evaluation and RFP processes.Risk Analytics – RVK offers clients a tool to evaluate total fund risk by aggregating the underlying exposures of all of the funds included in the portfolio. The risk analytics service is offered once per year to all RVK clients and provides a unique perspective on overarching portfolio risk exposures, which may not be apparent using traditional performance reporting. MPI Stylus – Investment analytics system that performs style analysis, risk analysis, performance analysis, and measures investment efficiency. The program enables RVK to analyze client portfolios using mean variance optimization and to perform scenario analysis using Monte Carlo simulations. This software, along with our proprietary asset class assumptions, serves as the foundation for our asset allocation discussions with clients.Market Research Tools – RVK uses subscription-based services such as Lexis-Nexis, the Wall Street Journal, and FundFire to monitor and analyze real-time movements in the financial markets. Manager Research Databases – Our Manager Research Team uses a variety of databases and subscription services to research and monitor investment managers. Examples of subscription-based services include eVestment, Morningstar Direct, and Preqin. Our proprietary databases include RADAR and our Manager Evaluation Database.?RVK leverages its size to develop, purchase, and maintain in-house and third-party systems to ultimately enhance the quality of our advice to clients. We are deeply committed to upgrading and enhancing our various databases and systems and are always open to feedback and suggestions from our clients.Describe your catastrophic data recovery plans. How often do you test your recovery system?In case of a declared emergency at RVK's Portland headquarters, detailed action items, as outlined in our Business Continuity Plan will be implemented. The Plan requires that all of our electronic data, including the contents of our databases, be archived daily via LTO4 tapes, and the daily backup tapes be stored in our Information Systems' fire safe. Weekly backup sets are available for six weeks and the monthly tape sets are held for seven years. A master copy of the installation CD and installation codes is also stored offsite at our backup facility, Iron Mountain, located near our headquarters in Portland, Oregon. RVK tests its disaster recovery plan approximately every two to three years, and the auxiliary backup power systems are tested on a monthly basis. Critical data is continuously migrated between RVK locations, minimizing reliance on a single site for data access. There are no material weaknesses or deficiencies to note. The most recent update to RVK's Business Continuity/Disaster Recovery plan was made on March 20, 2017. Pertaining to the current COVID-19 crisis, we are pleased to report that RVK has been fully operational with approximately 115 of our 124 colleagues working from home for the last several months. We are well equipped to serve our clients, whether from our four office locations or from each of our employees' homes.Describe your maintenance and backup procedures including daily backups, retention timetable and off-site backup storage approach. Where are your off- site backup facilities located? Is the backup data saved on disc or in the cloud?As described in our response to the previous question, our disaster recovery plan requires that all of our electronic data, including the contents of our databases, be archived daily via LTO4 tapes, and the daily backup tapes be stored in our Information Systems' fire safe. Weekly backup sets are available for six weeks and the monthly tape sets are held for seven years. A master copy of the installation CD and installation codes is also stored offsite at our backup facility, Iron Mountain, located near our headquarters in Portland, Oregon. Describe how any database(s) can be accessed by the Burlington Employees' Retirement System Board staff.Clients have access to our secure online portal, PRISM, which provides online web access to current and historical materials pertaining to their portfolio(s), as shown below and onto the following page:Monthly and quarterly performance reportsThought leadership publicationsMonthly and quarterly market review/commentariesTopical research papersAsset allocation studiesAsset/liability studies Investment manager hire/fire recommendations, searches/evaluations, and updatesGeneral market updates Client materials can also be distributed via email, hard copy, CD, or USB Drive. FeesPlease outline your fee structure for this plan. Please indicate all services you propose to provide and their associated fees. Specifically, detail in terms of your retainer, manager searches, performance monitoring on a monthly basis and other functions.RVK is pleased to propose an all-inclusive annual retainer fee of $115,000 for non-discretionary investment advisory services to the City of Burlington Employees’ Retirement System.Our proposed retainer fee reflects all services outlined within the Scope of Advisory Services and the Request For Proposal, recognizing there are different scopes of work contained in each, inclusive of five in-person meetings per year. In addition, our proposed fee will cover all travel and any other out-of-pocket related expenses that RVK will incur throughout the course of this relationship. Our proposed fee will be fixed for the first two years of service, and adjusted thereafter by 2.5% annually, starting in year three.RVK’s offer includes advising on all investments currently included in the Scope of Advisory Services. However, if in the future, the City chooses to pursue direct, closed end fund investing in alternative private market asset classes such as private equity, private credit, or real estate, RVK will be pleased to provide such fund search and due diligence services, at a mutually agreed upon project fee, at the City’s discretion.While not explicitly outlined in the Scope of Advisory Services, should the City choose to task RVK with conducting a custody search and evaluation, RVK will be pleased to provide these search services under a mutually agreed upon project fee in the range of $12,000 - $15,000.Similarly, while not outlined in the Scope of Advisory Services, should the City choose to task RVK with conducting an asset liability study, RVK will be pleased to provide such a study under a mutually agreed upon project fee of $25,000 - $30,000.Lastly, should the City wish to have RVK attend more than five in-person meetings in any given year, we would be happy to accommodate this request at a mutually agreed upon fee. Please indicate the number of years for which your organization would be willing to guarantee its fees.This fee is guaranteed for the first two years of the relationship, after which we would propose an annual increase of 2.5%, beginning in year three.Please list any anticipated miscellaneous expenses and disbursements for which your organization will charge or seek reimbursement and unit costs of such expenses (if applicable).Our proposed retainer fee is all-inclusive, reflecting all travel, labor, and incidental costs. Disclose your portfolio management philosophy as it relates to negotiating/establishing fee arrangements with money managers. Disclose your review/evaluation process to determine reasonableness of each investment manager fee. Disclose your process for periodic review and recommendation of service fee reductions or consolidation.RVK actively assists clients in negotiating investment manager fees. We believe fee reductions are available in nearly all mandates above $50 million, and while we always treat managers with professional respect, we think it pays to be very aggressive when discussing fees. RVK's experience of over 34 years in the investment consulting industry has enabled us to develop strong, longstanding relationships with an extensive number of investment managers, resulting in strong negotiating power to obtain competitive fees and providing access to "soft-closed" funds for clients. We have extensive experience negotiating customized asset management and incentive compensation structures with managers and proactively work to confirm that our client's investment is subject to the most favorable terms possible There is no one structure that is appropriate for every investment, thus, we analyze each investment opportunity independently to formulate the most appropriate fee structure for a fund's investment strategy and current market conditions.What are the anticipated fund, limited partnerships, separate account, CITs, ETF, etc., fees and expenses?RVK only provides non-discretionary investment advisory services. Accordingly, we would not offer any funds for which we would receive investment management, sales, or distribution-related compensation. Any fees Burlington Employees’ Retirement System would pay related to investments in funds would be paid directly to investment managers selected by the City. Since investment management fees can vary by investment manager, fund structure, and asset class, we are not able to estimate investment management fees at this time. However, RVK does negotiate investment management fees on behalf of our clients.What are the estimated fees and expenses charged by your Custodian/Trustee?RVK does not offer in-house Custodial services, nor do we work with just one Custodian. We understand that the plan is currently transitioning its relationship from US Bank to Zions Bank. RVK has a common relationship with Zions Bank and would stand ready to support this relationship or alternatives as determined by the City. ????When it comes to negotiating service provider fees, such as custody fees, RVK's IOSG process assists our service teams with obtaining relevant, comparable data upon which to base a selection and negotiation process and ultimately, a prudent decision. Such processes can be conducted as standalone negotiation or within the context of a more formal search process. While we have industry data that can be relied upon to a point, a search process often presents the ideal circumstances to allow for the most effective documentation of needs and current / prospective provider capabilities and fees. Do you intend to charge for special projects or ad hoc work? If so, how would these services be defined and billed? Would there be a discount from the standard fees or special projects?In the event the City chooses to pursue direct, closed end fund investing in alternative private market asset classes such as private equity, private credit, or real estate, RVK will be pleased to provide such fund search and due diligence services, at a mutually agreed upon project fee, at the City’s discretion.While not explicitly outlined in the Scope of Advisory Services, should the City choose to task RVK with conducting a custody search and evaluation, RVK will be pleased to provide these search services under a mutually agreed upon project fee in the range of $12,000 - $15,000.Similarly, while not explicitly outlined in the Scope of Advisory Services, should the City choose to task RVK with conducting an asset liability study, RVK will be pleased to provide such a study under a mutually agreed upon project fee of $25,000 - $30,000.If hired, will your firm receive any other form of compensation from working with this account that has not yet been revealed? If yes, what is the form of compensation?No.Describe in detail any mutual fund revenue sharing (recapture), 12b-1 fees, finder's fees, directed brokerage commissions (separate accounts), collective trust rebates, and any other revenues or fee rebates. Full transparency and disclosure of expenses, fees, revenue sharing, etc. is an absolute and nonnegotiable requirement.RVK does not have any other revenues to disclose. As mentioned earlier, our proposed retainer fee is the only ongoing fee RVK will receive in connection with this relationship, thus preventing potential conflicts of interest. If your organization plans to bill for special projects on an hourly basis, please include a schedule showing the hourly rates of the professionals who would be assigned to the Trust's account. If selected, your organization will be expected to provide detailed back-up documentation reflecting the number of hours expended on a special project, billing rates, the subject matter of the services rendered, and the particular person(s) rendering those services.*A confirmation of fees will be required.When performing projects for retainer clients, we prefer to bill a one-time project fee rather than hourly rates. Please refer to Question H.1 in this section for our proposed fees for the projects outlined. MiscellaneousPlease provide a confirmation of your organization's willingness and availability to commence work immediately upon selection and to devote sufficient resources to perform any and all services in a timely and efficient manner.RVK confirms that it is willing and available to commence work immediately upon selection, and to devote sufficient resources to perform any and all services in a timely and efficient manner.A certification that all information contained in the proposal is complete and accurate, signed by a person authorized to negotiate on behalf of and contractually bind your organization. Any misrepresentation in the proposal could result in the termination of the contract at any time and potential liability.RVK certifies that all information contained in the proposal is complete and accurate, and it is signed by a person authorized to negotiate on behalf of and contractually bind our organization.Any other information you feel will be beneficial to support your proposal.In addition to the many RVK resources discussed throughout this proposal, for detailed or highly complex operational aspects of our plan advisory practice, RVK often leverages the expertise of our Investment Operations Solutions Group (IOSG).Led by Investment Operations Consultant Jonathan Kowolik, our highly specialized operations practice currently consists of four dedicated members with additional support staff and resources drawn from within our consulting staff. The IOSG maintains an active research relationship with the vendor marketplace and regularly performs search, selection, and evaluation services for trust/custody providers, recordkeepers, securities lending agents, and transition managers on behalf of clients. This group is an important resource to many of our clients and supplements the operational support that is generally provided by the general consulting team. ................
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