March 13, 2020 Dear Sir/Madam: Attached is Addendum No. 1 ...€¦ · Addendum No. 1, 20-00016-APES Page 1 of 8 March 13, 2020 To All Bidders: The following constitutes Addendum No

March 13, 2020 Dear Sir/Madam: Attached is Addendum No. 1 to SEPTA’s Request For Proposal No. 20-00016-APES –

Defined Benefit Pension Plan Advisory Services, 5-Year Term.

The deadline for receipt of proposals is hereby changed from Wednesday, March 18, 2020

at 4:30 PM EST to Monday, March 23, 2020 at 1:00 PM EST.

Any inquiries regarding this opportunity must be directed to Paul Stavros of the Procurement

and Supply Chain Management Department at (215) 580-3543 or [email protected].

Sincerely,

X

Mar 13 2020 3:49 PM

Paul E Stavros

Sr. Contract Administrator Procurement & Supply Chain Management Dept.

Addendum No. 1, 20-00016-APES

Page 1 of 8 March 13, 2020

To All Bidders: The following constitutes Addendum No. 1 to SEPTA Request For Proposal No. 20-

00016-APES – Defined Benefit Pension Plan Advisory Services, 5-Year Term.

This Addendum must be acknowledged by inserting the date of this Addendum next to

“No. 1” in the Response Form entitled “Addenda”. Failure to do so may render your

Proposal as non-responsive.

Questions, Answers, and Clarifications issued with this Addendum are hereby

incorporated by reference and made part of the Terms and Conditions of this project.

A. General

1. The deadline for receipt of proposals is hereby changed from Wednesday, March

18, 2020 at 4:30 PM EST to Monday, March 23, 2020 at 1:00 PM EST.

2. Please find attached a 1-page Acknowledgement of Addenda form to be completed

and provided with your proposal to acknowledge receipt and understanding of all

Addenda issued by SEPTA for this RFP.

3. Please find attached, the Asset Allocation & Performance report (5-pages) provided

in support of our Response to Question 4, below.

4. Please find attached Replacement Pages 47 - 49, for “Attach. 2 – Scope of Svcs,

Defined Benefit Pension Plan Advisory Services”.

5. Please find attached a 1-page document in support of SEPTA’s Response to

questions 40 and 42, below.



B. Questions (Q) & SEPTA’s Response (R)

1. Q: Why is this search being conducted? R: The incumbent’s current 5-year contract expires on December 31,

2020.

2. Q: Who is the incumbent manager for the DB plan and can they rebid? R: PFM Asset Management LLC is the incumbent for the Defined Benefit

(DB) Plan. The incumbent is welcome to bid on this opportunity.

3. Q: Are you planning on selecting one service provider for both the Defined Benefit Pension and the Deferred Compensation plan, or one for each?

R: Separate RFPs were released, and as a result, separate awards may be made to different firms. However, if in the best interest of SEPTA, one firm may be awarded both contracts.

4. Q: How big is the DB plan?

R: Please refer to the Asset Allocation & Performance report as of January 31, 2020 included as an attachment to this Addendum.

5. Q: When are selections expected to be made?

R: In the next few months.

6. Q: Is the meeting schedule for 2020 available? If so, can you please provide it? R: The meeting schedule for the SEPTA Pension Committee has not been

set for 2020 at this time. The Pension Committee has historically met quarterly on the same day as the full Board meeting, usually the last or next to last Thursday of the month. There may be an occasional need for an additional meeting during the quarter.

7. Q: What is the biggest challenge or issue the Committee is currently facing?

R: The biggest challenge is reducing the Pension Plan’s unfunded liability. The Plan is currently 66.1% funded as of July 1, 2019.



8. Q: Can you confirm if Asset/Liability Studies are part of the expected Scope of Work for the consultant?

R: Yes, per the RFP’s Scope of Services, a comprehensive review of the Plan asset allocation strategy, policy guidelines, and managers as related to the actuarial return assumption is required on an annual basis. a. If so, is there a preference for there to be a separate fee for this type of

analysis, or an all-inclusive retainer fee that reflects this periodic analysis? R: Please refer to the Price Proposal; the fee for this type of

analysis should be broken out on the Price Proposal as well as included in a proposer’s overall contract sum.

b. If applicable, when was the last Asset/Liability Study conducted? Are you aware of when the next Study is expected to be completed? R: Per the RFP Scope of Services, an asset/liability study is

completed annually and the next analysis is expected to be completed at the onset of this contract.

9. Q: How many manager searches have been conducted each year, over the

last 3 years. R: Manager searches are conducted on an as-needed basis and vary from

year to year.

10. Q: The insurance requirements outlined in Part II of the RFP are significantly higher than those we have seen in other public RFPs for non-discretionary consultant services – specifically those regarding Umbrella Liability and Cyber Liability. Our firm carries $4M in Umbrella Liability and $3M in Cyber Liability, which we and our nearly 200 clients believe to be industry standard and sufficient levels of insurance. With this as context – and recognizing that our firm is not a financial institution, but rather an investment consultant – can you please advise if the insurance coverage such as ours would be considered adequate?

R: Holding $3M in Cyber Security coverage is acceptable. In addition, a $4M Umbrella Policy is acceptable if the Contractor is using it to meet a $5M limit with a $1M underling policy.

11. Q: Is your current consultant being invited to rebid?

R: See Response to Question 2, above.

12. Q: If possible can you please provide the current fee being paid for investment advisory services?

R: This information has no relevance to this RFP.

13. Q: Do you work with an existing consultant? If so, what is the name of the consultant?




14. Q: How long has the current consultant been providing services? R: The current contract has been in place the last 5 years, with their

contract ending December 31, 2020. 15. Q: Is the current consultant allowed to bid in this RFP?


16. Q: Is there anything you would like the new consultant to do differently, improve, and/or provide additional services?

R: The RFP Scope of Services details what the consultant will be responsible for during the course of the contract.

17. Q: What is the total dollar amount of fees paid to the current or previous

consultant for the last two (2) years? Was it a fixed fee or is it percentage of assets?

R: See Response to Question 12 above.

18. Q: Our firm takes cyber security and the protection of our clients very seriously. In the best interest of both our clients and our organization, our internal security policy prohibits the use of CDs. Would it be acceptable if we submit an encrypted hyperlink or flash drive in lieu of a CD?

R: A flash drive would be acceptable in lieu of a CD.

19. Q: Can you tell us why the RFP is being issued – is it renewal or other reasons?


20. Q: What do you think is the single most important characteristic of an investment consulting firm?

R: The decision process used to select a Consultant will incorporate the entirety of each Proposer’s technical and pricing proposals. Please reference the Technical Evaluation Criteria within the RFP.

21. Q: When was the last time the Funds performed a liability-based asset

allocation study? R: See Response to Question 8, above.

22. Q: Can you please provide us with the ticker symbols and the current market

value of each fund option in the plan? If ticker symbols are not available, can you please provide us the name of the fund, asset class, investment objective, and expense ratio of each fund?


23. Q: Could you please provide the most recent performance report?




24. Q: What is the name of the DB plan actuary?

R: The Plan’s current actuary is Milliman.

25. Q: Could you please provide the most recent actuarial plan valuation report? Is the plan fully funded?

R: The actuarial report contains proprietary information and is not available for general release. However, footnote 7 to SEPTA’s 2019 Audited Financial Statements contains a summary plan description, funding policy, annual pension costs and related actuarial information, and funded ratio of each of the Plans. SEPTA’s Annual Financial Statements can be found at www.septa.org under the Media tab in Reports. SEPTA’s Pension Plan is currently 66.1% funded as of July 1, 2019.

26. Q: Can you tell us the funding level of the pension plans (percentage of

outstanding liabilities)? R: See response to Question 25, above.

27. Q: Would you like fiduciary education workshops to be implemented for the

investment committee by the consultant? R: Yes, per the RFP Scope of Services, the Consultant is responsible to

continuously educate the Pension Committee regarding potential new asset classes, managers, and funds. The education process also relates to interpretation of performance data and other metrics typically necessary for investment committees to make informed decisions. We would anticipate such education would take place during the regularly scheduled Committee meetings.

28. Q: Would you be interested in the consultant providing a review of current TPA

education plan and materials? R: Not applicable to this RFP.

29. Q: If we plan to submit with DBE participation, could you please confirm the

DBE Participation Schedule, DBE Invoice Payment Report and Non-DBE Participation Schedule will be all documents SEPTA required? If not, please indicate other requirements?

R: Please refer to the RFP for the DBE participation documentation required.

30. Q: Can we please obtain a current performance report or a fund line-up?

R: See Response to Question 22, above. 31. Q: What is your consultant's annual fee?




32. Q: Regarding the contract, the RFP stipulates Fiduciary Liability Coverage. We are an investment consulting firm and are not required to have this insurance. We do have Professional Liability Insurance (Errors & Omissions) in line with the $5,000,000 limit. Is this acceptable and can the contract be modified to accommodate this request?

R: No. The required Fiduciary Liability Insurance remains as required.

33. Q: What was the impetus for the consultant search? Was it the expiration of the current contract or other reasons?


34. Q: What are the annual fees for the existing contract that the Board is paying to its current consultant? Are there project-related fees associated with the current arrangement that are not part of the base fee?


35. Q: Do you have a preliminary schedule of the 2020 Board meetings? R: Please refer to the SEPTA website for the SEPTA Board meeting

schedule. The SEPTA Pension Committee meeting schedule has not been set for 2020 at this time.

36. Q: Can you please confirm the funded status of the Plan? What are the

assumed/target rates of return for the Plan? R: The SEPTA Pension Plan is currently 66.1% funded as of July 1, 2019.

Per the investment Policy included in the RFP, the current actuarial assumption rate is 6.75%.

37. Q: Do you anticipate making any changes to the asset allocation of the

Plan? Are you considering any new asset classes? R: We have no current plan to materially change the existing asset

allocation of the fund and are not presently considering new asset classes. However, per the Scope of Services, the selected consultant will be required to review and make any recommended updates or revisions to the existing “Statement of Investment Policy, Objectives and Operating Guidelines” including the asset allocation strategy.

38. Q: Can you identify the managers currently within the Local/Emerging Manager

Policy? Have those managers primarily been sourced by the Consultant? R: Please refer to the RFP for a listing of the Plan’s current

Local/Emerging managers. SEPTA relies on consultant recommendations and the Pension Committee review of investment history, performance data, and interviews in the manager selection process.



39. Q: We request the following addition to the proposed contract. : Responsibility of Contractor: Contractor shall have no responsibility or authority to (i) manage or in any way direct the investment of any assets of SEPTA or (ii) enter into any agreement with any investment manager on behalf of, or otherwise bind, SEPTA. Nothing contained herein shall require SEPTA to engage any investment manager recommended by Contractor or to follow any advice provided by Contractor.

R: The proposed language is not acceptable, but please see our Response to Question 40, below.

40. Q: We request the following addition to the proposed contract. :

Acknowledgments - SEPTA acknowledges and agrees that: a. Contractor has not made and cannot make any promise, guarantee or

other statement or representation regarding the future investment performance of SEPTA’s investments;

b. the past performance of the accounts of other clients of Contractor is not necessarily indicative of the future performance of SEPTA’s investments;

c. in the performance of its services under this Agreement, Contractor shall be entitled to rely on information furnished by investment managers, it being understood that Contractor shall have no liability for the accuracy or completeness of any information furnished or representation made by the investment managers, provided Contractor conducted due diligence and evaluation of such investment managers with reasonable care;

d. to the extent permitted by applicable law, Contractor will not be liable for any losses or expenses incurred as a result of any action or omission by an investment manager, custodian or unrelated third party;

e. with respect to funds-of-funds, if applicable, Contractor’s analysis will be conducted at the fund-of-funds level and will not generally include a direct review of underlying funds; and

f. Contractor’s services do not include tax or regulatory advice, or interpretation of legal documents.

R: The proposed language is not acceptable, however, please see the attached language to be added to the proposed contract as Item 43.


Indemnification from costs associated with Subpoenas - Except to the extent prohibited by applicable law, SEPTA and its trustees shall indemnify, defend and hold harmless the Contractor from and against any and all costs and expenses as incurred in connection with the Contractor’s response to subpoenas, investigations, audits and other inquiries made with respect to SEPTA by third parties (including without limitation attorneys’ fees and other costs associated with reviewing and producing documents and other materials).

R: The proposed language is not acceptable.



42. Q: We request the following addition to the proposed contract. : Miscellaneous Terms - Contractor shall be permitted to give advice and take action with respect to SEPTA which differs from the advice made or recommended or actions taken with respect to such other accounts and clients even though the investment objectives may be the same or similar. Contractor shall not be obligated to give SEPTA treatment more favorable than or preferential to that provided to such other accounts and clients. Nothing in this Agreement shall limit or restrict Contractor or any of its shareholders, officers or employees from buying, selling, or trading in any securities for their own account or accounts, subject to Contractor’s obligations as an SEC-registered entity and the restrictions set forth in Contractor’s Code of Ethics and Personal Trading Policy. SEPTA acknowledges that Contractor and its shareholders, officers, affiliates and employees, and its other clients, may at any time have, acquire, increase, decrease, or dispose of positions in investments which are at the same time being acquired or disposed of for SEPTA.

R: The proposed language is not acceptable, however, please see the attached language to be added to the proposed contract as Item 44.


Electronic Signatures and Records - Both the Contractor and SEPTA consent to the use of electronic signatures. This Agreement, and any other documents requiring a signature hereunder, may be signed electronically. The Parties agree not to deny the legal effect or enforceability of the Agreement solely because it is in electronic form or because an electronic record was used in its formation. The Parties agree not to object to the admissibility of the Agreement in the form of an electronic record, or a paper copy of an electronic document, or a paper copy of a document bearing an electronic signature, on the basis that it is an electronic record or electronic signature or that it is not in its original form or is not an original.

R: The proposed language is not acceptable.

**** End Addendum ****

ACKNOWLEDGEMENT OF ADDENDA FORM: 20-00016-APES

This form shall be completed to acknowledge all addenda by inserting the dates next to the

appropriate addenda number and including this form with your Technical Proposal submittal.

Failure to properly acknowledge the addenda, as set forth below, may cause your proposal to be

considered non-responsive to the solicitation.

The undersigned acknowledges receipt of the following addenda to this RFP No. 20-00016-APES

and certifies that all changes have been taken into account in the Scope and Price of our proposal.

(insert date(s) below) Addendum No. 1: _________________ Addendum No. 2: _________________ Addendum No. 3: _________________ Addendum No. 4: _________________ Proposer Name: ________________________________________________________________ Street Address: ________________________________________________________________ City, State Zip: ________________________________________________________________ Signature of Authorized Signer: ___________________________________________________ Print/Type Name: _______________________________________________________________

Phone Number : ________________________

Allocation

MarketValue

($)%

Performance(%)

1Month

1Quarter

YearTo

Date

1Year

3Years

5Years

10Years

SinceInception

InceptionDate

TOTAL FUND 1,563,115,220 100.00 -0.50 3.32 -0.50 12.07 9.30 7.00 N/A 8.58 06/01/2010

Policy Index -0.71 3.06 -0.71 11.04 8.11 6.72 7.95 8.50 06/01/2010

TOTAL FUND (ex-alternatives) 1,291,685,278 82.64 -0.56 4.06 -0.56 13.88 10.07 7.53 N/A 9.13 06/01/2010

Policy Index -0.71 3.06 -0.71 11.04 8.11 6.72 7.95 8.50 06/01/2010

Passive All Cap Domestic Equity 363,709,762 23.27 -0.04 6.69 -0.04 20.28 13.66 11.74 N/A 14.16 11/01/2011

Vanguard Total Stock Index 340,992,592 21.81 -0.07 6.68 -0.07 20.28 13.69 11.75 N/A 14.15 11/01/2011

MSCI US Broad Market Index -0.15 6.63 -0.15 20.45 13.80 11.85 13.87 14.24 11/01/2011

Vanguard Total Stock Market ETF 22,717,170 1.45 -0.07 6.48 -0.07 19.94 13.39 11.49 N/A 13.94 11/01/2011

MSCI US Broad Market Index -0.15 6.63 -0.15 20.45 13.80 11.85 13.87 14.24 11/01/2011

Large Cap Equity Composite 126,850,633 8.12 -0.98 5.35 -0.98 20.61 16.77 12.02 N/A 13.21 06/01/2010

S&P 500 -0.04 6.72 -0.04 21.68 14.54 12.37 13.97 14.23 06/01/2010

Vesper U.S. Large Cap ST Rev Strategy ETF 5,653,481 0.36 N/A N/A N/A N/A N/A N/A N/A N/A 02/01/2020

S&P 500 -0.04 6.72 -0.04 21.68 14.54 12.37 13.97 N/A 02/01/2020

Edgar Lomax 68,091,587 4.36 -3.10 2.61 -3.10 14.05 11.51 10.10 N/A 12.99 06/01/2010

Russell 1000 Value Index -2.15 3.65 -2.15 14.88 8.63 8.70 11.87 11.91 06/01/2010

Philadelphia Investment Partners/Carne 240 0.00 N/A N/A N/A N/A N/A N/A N/A N/A 09/01/2012

Russell 1000 Value Index -2.15 3.65 -2.15 14.88 8.63 8.70 11.87 11.85 09/01/2012

Polen Capital Mgt. 53,105,325 3.40 2.50 9.78 2.50 31.59 24.14 18.27 N/A 16.58 03/01/2012

Russell 1000 Growth Index 2.24 9.99 2.24 27.94 20.04 15.49 15.99 15.69 03/01/2012

Small Cap Equity Composite 114,411,498 7.32 -2.04 4.28 -2.04 10.05 9.99 7.49 N/A 10.20 06/01/2010

Russell 2000 Index -3.21 3.68 -3.21 9.21 7.28 8.23 11.88 11.18 06/01/2010

Vanguard S&P SmallCap 600 Index 57,941,772 3.71 -3.97 1.93 -3.97 6.54 7.06 N/A N/A 7.06 02/01/2017

S&P SmallCap 600 -3.97 1.93 -3.97 6.57 7.05 9.45 13.28 7.05 02/01/2017

Emerald * 56,469,727 3.61 0.02 6.82 0.02 13.93 13.38 11.28 N/A 12.45 06/01/2010

Russell 2000 Growth -1.10 7.12 -1.10 13.91 11.48 9.60 12.70 12.02 06/01/2010

Asset Allocation & Performance

SEPTA Master Trust Pension Plan - Monthly Flash As of January 31, 2020

Returns and market values are preliminary and are net of fees.Returns are expressed as percentages.Returns prior to 6/30/2010 supplied by previous consultant.



Allocation

MarketValue

($)%

Performance(%)

1Month

1Quarter

YearTo

Date

1Year

3Years

5Years

10Years

SinceInception

InceptionDate

International Equity Composite 296,514,206 18.97 -2.67 2.69 -2.67 12.27 8.60 5.35 N/A 6.49 06/01/2010

MSCI AC World ex USA (Net) -2.69 2.42 -2.69 9.94 7.62 4.96 5.21 5.98 06/01/2010

Blackrock Int'l ex-US Index 140,243,860 8.97 -2.59 2.53 -2.59 10.28 7.90 5.19 N/A 3.96 07/01/2011


Invesco International Growth Trust 41,828,869 2.68 -3.12 1.79 -3.12 15.79 8.74 5.49 N/A 7.39 07/01/2012


Hardman Johnston 34,068,125 2.18 -3.07 4.74 -3.07 19.12 13.22 8.76 N/A 9.26 08/01/2012


Pyrford International 53,671,867 3.43 -1.67 2.50 -1.67 12.84 7.06 4.30 N/A 5.07 04/01/2013

MSCI EAFE (net) -2.09 2.23 -2.09 12.10 7.76 5.12 5.76 5.40 04/01/2013

Invesco Oppenheimer Developing Markets 26,701,485 1.71 -3.86 2.84 -3.86 10.30 10.83 6.05 N/A 5.92 07/01/2012

MSCI EM (net) -4.66 2.31 -4.66 3.81 7.88 4.48 3.78 4.11 07/01/2012

Domestic Core/Core Plus Composite 228,549,316 14.62 2.26 2.15 2.26 10.63 4.86 3.21 N/A 4.06 06/01/2010

Blmbg. Barc. U.S. Aggregate 1.92 1.80 1.92 9.64 4.62 3.01 3.79 3.69 06/01/2010

Galliard 114,213,669 7.31 2.34 2.04 2.34 10.40 4.95 3.37 N/A 3.34 05/01/2012


Prudential Core Bond Fund 114,335,647 7.31 2.19 2.26 2.19 10.69 N/A N/A N/A 5.09 10/01/2017


High Yield Composite 39,508,960 2.53 -0.22 1.98 -0.22 8.96 5.06 5.28 N/A 6.77 06/01/2010

ICE BofAML High Yield Master II 0.00 2.37 0.00 9.39 5.85 5.99 7.34 7.39 06/01/2010

Eaton Vance 39,501,756 2.53 -0.28 1.81 -0.28 9.08 5.43 5.58 N/A 7.12 06/01/2010

ICE BofAML High Yield Master II 0.00 2.37 0.00 9.39 5.85 5.99 7.34 7.39 06/01/2010

Alliance Bernstein (4Q18) 7,204 0.00 N/A N/A N/A N/A N/A N/A N/A N/A 03/01/2012

Bloomberg Barclays Global High Yield Indx (Hedged) 0.36 2.98 0.36 9.04 5.74 6.54 7.74 6.78 03/01/2012




Allocation

MarketValue

($)%

Performance(%)

1Month

1Quarter

YearTo

Date

1Year

3Years

5Years

10Years

SinceInception

InceptionDate

Global Core/Core Plus Composite 76,787,238 4.91 0.38 2.29 0.38 7.02 6.97 4.55 N/A 4.96 06/01/2010

Blmbg. Barc. Global Aggregate 1.28 1.09 1.28 6.58 4.32 2.60 2.57 2.89 06/01/2010

Brandywine (4Q18) 27,596 0.00 N/A N/A N/A N/A N/A N/A N/A N/A 06/01/2010

Blmbg. Barc. Global Aggregate 1.28 1.09 1.28 6.58 4.32 2.60 2.57 2.89 06/01/2010

MetLife (Logan Circle) 33,344,149 2.13 1.30 4.04 1.30 11.96 7.01 6.05 N/A 4.51 01/01/2013

JPM EMBI Global Diversified 1.52 3.07 1.52 11.85 6.71 6.36 7.02 4.85 01/01/2013

60% JPM EMBI / 15% GBI / 25% CEMBI 1.10 2.67 1.10 11.18 6.59 5.86 6.28 4.09 01/01/2013

EJF Debt Opportunities Fund 43,415,494 2.78 0.00 1.82 0.00 6.40 10.48 6.82 N/A 6.01 02/01/2014

HFRI ED: Distressed/Restructuring Index -0.11 0.24 -0.11 -0.18 1.75 2.96 4.29 1.90 02/01/2014

HFRX ED: Multi-Strategy Index -0.83 0.20 -0.83 3.06 0.72 3.11 3.05 3.12 02/01/2014

Real Estate Composite 104,227,559 6.67 0.04 0.66 0.04 1.96 6.36 7.98 N/A 11.15 06/01/2010

NCREIF Fund Index-OEDC N/A N/A N/A N/A N/A N/A N/A N/A 06/01/2010

NCREIF Property Index N/A N/A N/A N/A N/A N/A N/A N/A 06/01/2010

JP Morgan Property Fund 27,722,093 1.77 0.16 1.79 0.16 3.52 5.60 7.52 N/A 10.34 06/01/2010


NCREIF Fund Index-ODCE (VW) N/A N/A N/A N/A N/A N/A N/A N/A 06/01/2010

Morgan Stanley Property Fund 59,886,038 3.83 0.00 1.51 0.00 6.08 7.59 9.28 11.95 5.63 04/01/2008



Verdis Real Estate Partners III LP 7,561,811 0.48 0.00 0.00 0.00 2.61 12.41 14.60 N/A 11.56 01/01/2013


Brookwood US Real Estate Offshore 4,153,156 0.27 0.00 -8.33 0.00 -18.31 -2.56 -1.28 N/A 3.26 05/01/2013


Brookwood Properties Onshore Fund I, L.P. - Recap 4,904,461 0.31 0.00 -4.13 0.00 N/A N/A N/A N/A -4.13 10/01/2019





Allocation

MarketValue

($)%

Performance(%)

1Month

1Quarter

YearTo

Date

1Year

3Years

5Years

10Years

SinceInception

InceptionDate

Commodities Composite 62,034,512 3.97 -1.22 -2.26 -1.22 7.95 3.90 0.03 N/A -2.52 09/01/2011

Bloomberg Commodity Index Total Return -7.36 -5.18 -7.36 -5.38 -3.47 -4.74 -4.74 -8.30 09/01/2011

Gresham Strategic Commodities Fund 11,103,713 0.71 N/A N/A N/A N/A N/A N/A N/A N/A 09/01/2011


Pinnacle Asset 15,560,451 1.00 0.00 3.34 0.00 11.42 4.26 0.02 N/A 1.48 01/01/2011


HFRI FOF Composite Index 0.31 2.92 0.31 6.04 3.66 2.41 2.90 2.53 01/01/2011

NGP Natural Resources XI, L.P. 4,118,558 0.26 0.00 -2.95 0.00 -8.05 2.73 -6.22 N/A -6.22 02/01/2015

CA US Private Equity Index N/A N/A N/A N/A N/A N/A N/A N/A 02/01/2015

Wilshire 5000 + 300bps 0.26 7.55 0.26 24.22 17.26 15.37 17.23 15.37 02/01/2015

Homestead Capital LP 4,323,780 0.28 0.00 0.00 0.00 -4.72 -0.38 N/A N/A -0.16 06/01/2015


Wilshire 5000 + 300bps 0.26 7.55 0.26 24.22 17.26 15.37 17.23 14.76 06/01/2015

AMP Global Infrastructure Fund II 26,928,009 1.72 0.00 -3.94 0.00 16.08 N/A N/A N/A 10.84 08/01/2018


Wilshire 5000 + 300bps 0.26 7.55 0.26 24.22 17.26 15.37 17.23 14.00 08/01/2018

Hedge Fund Composite 54,870,620 3.51 0.37 1.41 0.37 5.05 4.24 2.75 N/A 3.83 06/01/2010


Goldman Sachs 253,247 0.02 N/A N/A N/A N/A N/A N/A N/A N/A 01/01/2007


Magnitude 54,617,374 3.49 0.36 1.43 0.36 5.73 4.92 3.61 N/A 4.92 11/01/2010


Private Equity Composite 34,632,978 2.22 0.00 -0.05 0.00 3.39 11.85 9.20 N/A 12.17 05/01/2010

Wilshire 5000 + 300bps 0.26 7.55 0.26 24.22 17.26 15.37 17.23 16.25 05/01/2010


Arrowhead Capital III 1,158,237 0.07 0.00 0.00 0.00 10.38 N/A N/A N/A -4.29 11/01/2018

ARCIS - ESD Fund V L.P. 5,696,511 0.36 0.00 0.00 0.00 7.46 9.53 N/A N/A 3.09 07/01/2016

Boston Millennia Partners III 764,073 0.05 0.00 0.00 0.00 -8.91 -6.49 -3.33 N/A 10.81 11/01/2010

Boston Millennia Partners IV 1,356,934 0.09 0.00 0.00 0.00 -7.21 6.93 N/A N/A 4.34 10/01/2016

Carlyle Europe Partners IV L.P. 4,273,483 0.27 0.00 0.00 0.00 -9.38 11.82 9.27 N/A 7.21 10/01/2014

Cinven Fund 6 4,661,928 0.30 0.00 0.00 0.00 14.67 N/A N/A N/A -19.15 06/01/2017

Golub Capital Partners 12 L.P. 2,930,008 0.19 0.00 0.00 0.00 8.88 N/A N/A N/A 8.17 01/01/2019

Great Hill Equity Partners V, L.P. 3,940,663 0.25 0.00 0.00 0.00 0.69 22.52 14.31 N/A 12.55 09/01/2014

Mesirow 1,925,994 0.12 0.00 0.00 0.00 8.06 15.00 11.81 12.82 7.26 08/01/2007




Allocation

MarketValue

($)%

Performance(%)

1Month

1Quarter

YearTo

Date

1Year

3Years

5Years

10Years

SinceInception

InceptionDate

Onex Partners 1,822,428 0.12 0.00 0.00 0.00 2.23 -0.24 7.56 11.89 6.31 12/01/2008

PineBridge 670,068 0.04 0.00 0.00 0.00 23.77 2.78 5.83 8.76 -3.22 09/01/2007

Portfolio Advisors 878,201 0.06 0.00 -2.02 0.00 4.60 4.22 6.01 8.34 2.38 07/01/2007

Yucaipa American 4,554,450 0.29 0.00 0.00 0.00 -0.11 9.75 1.35 8.10 13.41 01/01/2009

Timber Composite 15,664,273 1.00 0.00 -0.15 0.00 -3.46 1.67 0.81 N/A 2.58 05/01/2010

NCREIF Timberland Index N/A N/A N/A N/A N/A N/A N/A N/A 05/01/2010

Hancock Timberland IX 9,252,815 0.59 0.00 0.00 0.00 -7.79 -0.64 -1.16 1.65 -1.29 04/01/2008


Eastern Timberland Opportunities 6,411,458 0.41 0.00 -0.37 0.00 3.77 5.63 4.19 3.60 4.38 01/01/2009


Cash Equivalent MM 45,323,396 2.90 N/A N/A N/A N/A N/A N/A N/A N/A 05/01/2010

90 Day U.S. Treasury Bill 0.13 0.40 0.13 2.22 1.70 1.08 0.58 0.59 05/01/2010

Southern Sun (residual cash) 10,227 0.00 N/A N/A N/A N/A N/A N/A N/A N/A 06/01/2010

Litigation Account 20,041 0.00 N/A N/A N/A N/A N/A N/A N/A N/A 07/01/2011

Note: At any point in time a private equity portfolio’s valuation may be different from market prices due to an inherent lag effect in the industry. The reporting laginherent in this process means that there can be a valuation lag of a quarter or, in some cases, even longer. For Private Equity and other illiquid asset classesshown herein, performance is calculated for the relevant period(s) using a roll-forward valuation approach whereby the last reported valuation is adjusted for cashflows to provide an initial estimated valuation, typically resulting in a zero return for the lagging period. Performance is adjusted and finalized when the updatedvaluation is reported. The roll-forward valuation methodology described is consistent with guidance provided within the CFA Institute’s Global InvestmentPerformance Standards (GIPS). Performance is calculated using the Modified-Dietz time weighted methodology to maintain consistency with the other returns inthis exhibit. For since inception IRR performance, please refer to the fund-specific overview page.* Emerald benchmark: benchmark change from R2000 index to R2000 Growth index effective 1/1/2015 due to change in investment style.


$ IN THOUSANDSJAN-20

BALANCEPERCENT OF

TOTAL

PASSIVE ALL CAP DOMESTIC EQUITY $363,710 23.27%Vanguard Total Stock Index 340,993 21.81%Vanguard Total Stock Market ETF 22,717 1.45%

LARGE CAP EQUITY $126,850 8.12%Edgar Lomax 68,091 4.36%Polen Capital Management 53,105 3.40%Vesper U.S. Large Cap ST Rev Strategy ETF 5,653 0.36%

SMALL CAP EQUITY $114,411 7.32%Vanguard S&P SmallCap 600 Index 57,942 3.71%Emerald 56,470 3.61%

INTERNATIONAL EQUITY $296,514 18.97%Blackrock Int'l ex-US Index 140,244 8.97%Invesco International Growth Trust 41,829 2.68%Hardman Johnston 34,068 2.18%Pyrford International 53,672 3.43%Oppenheimer Developing Markets 26,701 1.71%

DOMESTIC CORE/CORE PLUS FIXED INCOME $228,549 14.62%Galliard 114,214 7.31%Prudential Core Bond 114,336 7.31%

HIGH YIELD $39,509 2.53%Eaton Vance 39,502 2.53%Alliance Bernstein 7 0.00%

GLOBAL CORE/CORE PLUS FIXED INCOME $76,787 4.91%Brandywine 28 0.00%Logan Circle 33,344 2.13%EJF Debt Opportunities Fund 43,415 2.78%

REAL ESTATE $104,228 6.67%JP Morgan Property Fund 27,722 1.77%Morgan Stanley Property Fund 59,886 3.83%Verdis Real Estate Partners III LP 7,562 0.48%Brookwood US Real Estate Offshore 4,153 0.27%Brookwood Properties Onshore Fund I, L.P.-Recap 4,904 0.31%

Defined Benefit Plan Managers and Assets Under Management

RFP 20-00016-APES Page 47 of 49 Addemdum 1 Replacement Page

$ IN THOUSANDSJAN-20

BALANCEPERCENT OF

TOTAL

Defined Benefit Plan Managers and Assets Under Management

COMMODITIES $62,035 3.97%Gresham Strategic Commodities Fund 11,104 0.71%Pinnacle Asset 15,560 1.00%NGP Natural Resources XI, LP 4,119 0.26%Homestead Capital LP 4,324 0.28%AMP Global Infrastructure Fund 26,928 1.72%

HEDGE FUNDS $54,871 3.51%Goldman Sachs 253 0.02%Magnitude 54,617 3.49%

PRIVATE EQUITY $34,633 2.22%Arrowhead Capital III 1,158 0.07%ARCIS-ESD Fund V L.P. 5,697 0.36%Boston Millennia Partners III 764 0.05%Boston Millennia Partners IV 1,357 0.09%Carlyle Europe Partners IV L.P. 4,273 0.27%Cinven Fund 6 4,662 0.30%Golub Capital Partners 12 L.P. 2,930 0.19%Great Hill Equity Partners V, L.P. 3,941 0.25%Mesirow 1,926 0.12%Onex Partners 1,822 0.12%PineBridge 670 0.04%Portfolio Advisors 878 0.06%Yucaipa American 4,554 0.29%

TIMBER $15,664 1.00%Hancock Timberland IX 9,253 0.59%Eastern Timberland Opportunities 6,411 0.41%

CASH AND EQUIVALENTS $45,323 2.90%Cash 45,323 2.90%

TOTAL DB PLAN ASSETS AS OF 1/31/2020 $1,563,115 100.00%


$364 or 23.3%

$127 or 8.1%

$114 or 7.3%

$297 or 19.0%

$228 or 14.6%

$39 or 2.5%

$77 or 4.9%

$272 or 17.4%

$45 or 2.9%

Defined Benefit Plan Asset AllocationAs of January 31, 2020

($ in Millions)

PASSIVE ALL CAP DOMESTIC EQUITY LARGE CAP EQUITY SMALL CAP EQUITYINTERNATIONAL EQUITY DOMESTIC CORE/CORE PLUS FIXED INCOME HIGH YIELD COMPOSITEGLOBAL CORE/CORE PLUS FIXED INCOME ALTERNATIVE INVESTMENTS CASH

REAL ESTATE COMPOSITE $104 38.24%COMMODITIES COMPOSITE $62 22.79%HEDGE FUND COMPOSITE $55 20.22%PRIVATE EQUITY $35 12.87%TIMBER $16 5.88%TOTAL $272 100.00%


Addendum #1

17 NAECFTEC 01/2020

43. Acknowledgements

Contractor/Consultant shall discharge its duties as a Contractor/Consultant in accordance with the terms of this Agreement and applicable law. SEPTA acknowledges and agrees (i) that Contractor/Consultant has no authority or responsibility to manage or direct the investment of any assets that are the subject of Contractor/Consultant’s consulting services provided under the terms of this Agreement, (ii) that Contractor/Consultant has not made any promise, guarantee or other statement or representation regarding the future investment performance of such assets, and (iii) that Contractor/Consultant will not be liable to SEPTA for any losses or expenses incurred directly as a result of any action or omission by custodian or unrelated third party.

SEPTA acknowledges that the past performance of the accounts of other clients of Contractor/Consultant is not necessarily indicative of the future performance of SEPTA’s investments.

44. Miscellaneous

Contractor/Consultant may act as investment consultant or advisor for others, and nothing in this Agreement shall in any way be deemed to restrict the right of Contractor/Consultant to perform investment advisory, consulting or other services for any other person or entity, and the performance of such services for others shall not be deemed to violate or give rise to any duty or obligation to SEPTA or its trustees.

Contractor/Consultant shall be permitted to give advice and take action with respect to SEPTA which differs from the advice made or recommend or actions taken with respect to such other accounts and clients. Contractor/Consultant shall not be obligated to give SEPTA treatment more favorable than or preferential to that provided to such other accounts and clients.

Nothing in this Agreement shall limit or restrict Contractor/Consultant or any of its shareholders, officers, affiliates or employees from buying, selling, or trading in any securities for their own account or accounts. SEPTA acknowledges that Contractor/Consultant and its shareholders, officers, affiliates and employees, and its other clients, may at any time have, acquire, increase, decrease, or dispose of positions in investments which are at the same time being acquired or disposed of for the account of SEPTA.

Documents

March 13, 2020 Dear Sir/Madam: Attached is Addendum No. 1 ...€¦ · Addendum No. 1, 20-00016-APES Page 1 of 8 March 13, 2020 To All Bidders: The following constitutes Addendum No