La. Admin. Code tit. 71 § I-115

Current through Register Vol. 50, No. 11, November 20, 2024

Section I-115 - Selection of Outside Investment Managers

A. Minimum Requirements for Outside Investment Managers. Each investment manager chosen to manage any assets must be a registered investment advisor and in good standing with the Securities and Exchange Commission under the Investment Advisors Act of 1940, or, if a bank, in good standing with the appropriate federal and/or state regulatory officials.

B. Required Information. As a part of the information obtained from investment manager(s) proposing to become managers of any assets, such manager must provide five consecutive years of verifiable performance rates of return calculated on a time-weighted basis. These performance numbers must be based on a composite of fully discretionary accounts with a similar investment style and be reported net and gross of investment management fees.

C. Compensation Basis. Investment managers shall be compensated on a basis point fee as a percentage of assets contracted to manage.

D. Contract Provisions. Each contract which the state treasurer enters with an outside investment manager for managing the investment of the assets must contain, at a minimum, the following (in addition to any other provisions otherwise required by applicable law or rule in such contracts).

1. The investment manager shall manage the LEQTF assets under its care, custody, or control in accordance with applicable federal and Louisiana law, regulations, and rules, as well as with the goals and any investment policies or procedures which the state treasurer may have established from time to time.

2. Investment managers shall be evaluated by comparison to managers of like investment style or strategy.

3. The contract shall contain an acknowledgment by the investment manager of its fiduciary responsibility to the beneficiaries.

4. Investment managers shall notify the state treasurer immediately of any material matters or changes pertaining to the investment of the LEQTF, as well as any material changes of staff and/or ownership of the firm.

5. Investment managers shall make a presentation on the status and performance of the assets managed to the state treasurer and, if asked, to the advisory panel at least annually, and may be required to appear more frequently if deemed appropriate by the state treasurer. As a part of this presentation, the investment manager must provide written reports on, and be prepared to discuss, the following:

a. portfolio goals and objectives;

b. financial markets and economic outlook;

c. portfolio performance;

d. transactions, including brokerage;

e. accounting for dispersions between results of the assets managed and those assets of the LEQTF or of other entities managed by investment managers of similar or like style and strategy.

6. Investment managers shall submit quarterly a written report to the state treasurer detailing investment performance, financial markets and economic outlook, and accounting of dispersions from the benchmarks established by the state treasurer.

7. Investment managers shall be paid in arrears on a quarterly basis.

La. Admin. Code tit. 71, § I-115

Promulgated by the Department of the Treasury, Office of the Treasurer, LR 21:476 (May 1995).

AUTHORITY NOTE: Promulgated in accordance with R.S. 17:3803(B)(1)(e).