Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
OCTOBER 18, 2017
Subject
SUBJECT: INVESTMENT MANAGEMENT SERVICES FOR THE
OPERATING PORTFOLIO
Action
ACTION: AWARD CONTRACTS
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to award five year, fixed rate contracts to four investment management firms; 1) LM Capital Group, 2) RBC Global Asset Management, 3) Chandler Asset Management and 4) US Bancorp Asset Management, in an amount not to exceed $3,584,067, effective January 1, 2018, subject to resolution of protest(s), if any.
Issue
ISSUE
Our Investment Policy requires that temporarily idle funds of the agency be prudently invested to preserve capital and provide necessary liquidity, while maximizing earnings. The Los Angeles County Metropolitan Transportation Authority (Metro) hires external investment managers to invest part of our operating portfolio in longer term maturities for the benefits of superior portfolio performance, diversification, risk management and to obtain full time professional expertise in the field of fixed income at a reasonable cost. The current investment management services contracts are due to expire on December 31, 2017. We want new contracts for investment management services to be in place prior to that expiration date.
Discussion
DISCUSSION
Operating funds are the pool of excess working capital used to fund expenses such as salaries, capital project expenditures, fuel and supplies, contract and professional services.
Internal staff manages a separate short-term cash portfolio to meet daily liquidity requirements. The external investment managers invest the balance of our operating fund portfolio to take advantage of higher yields typically available on longer maturities.
The selection process was conducted on the "best value" basis. All proposers were evaluated on their organization, qualifications and experience of their personnel, investment style and their compatibility as investment mana...
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