Effective February 17, 2021
Why does the Secondary Market Corporate Credit Facility (SMCCF) have a requirement that an investment manager have at least $50 billion of assets under management in marketable securities?
The requirement that the investment manager have at least $50 billion of assets under management in marketable securities reflects two considerations. First, the SMCCF assesses experience managing comparable accounts as an indicator the firm has existing capacity (both personnel and infrastructure) to manage the SMCCF account. Second, the SMCCF portfolio should not be an outsized portion of the manager’s overall business, and the $50 billion AUM threshold avoids that circumstance.
Please note that as indicated in the Prequalification Process to Identify Bidders for Corporate Bond and ETF Investment Management Services if your firm doesn’t meet the investment manager role criteria listed in the document but offers services that could be relevant to the IM(s) or the SMCCF, please send a detailed description of your firm’s capabilities, such as workout expertise, analytical frameworks, or credit analysis services related to corporate bonds, to ny.vendor.submissions@ny.frb.org, using “SMCCF – Other Federal Reserve Bank of New York Services” as the subject line. The New York Fed may retain this information in the event such services are required for the SMCCF. Furnishing such information does not guarantee, however, that the New York Fed will consider your firm for future engagements.
The following three questions are in reference to Table 3 (Minimum Requirements for the Investment Manager of the Bond Portfolio), Question 2 (Assets Under Management), Sub-Question 2 requests “firm’s aggregate AUM for your top 10 accounts as of December 31, 2020;”
Please confirm whether the New York Fed would like firms to quantify the aggregate AUM for top 10 accounts representing corporate bonds only or across all asset classes as of December 31, 2020.
Please provide the aggregate AUM for your top 10 institutional accounts across all asset classes.In addition, please clarify if it is appropriate to include institutional pooled vehicles (e.g. ERISA commingled funds) in the accounting calculations for the top 10 accounts or, alternatively, if the New York Fed would like firms to disclose the aggregate AUM for the top 10 segregated (separately managed) accounts only.
Please focus on segregated (separately managed) accounts.Would the New York Fed confirm that attachments are permitted with prequalification submission? General marketing material is prohibited, but looking forward to sharing important attachments detailing cybersecurity policies & safeguards, risk management and compliance programs, if permissible.
This type of information is not required for the response to the prequalification. The New York Fed anticipates requesting such information at the RFP stage of the procurement.
What other detailed information can be provided about New York Fed expectations for things such as preferred fee arrangements, portfolio objectives, staffing, manager evaluation, and extent of anticipated investment discretion?
Further detail on these topics may be addressed at the RFP stage of the procurement.
