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RFP: Investments Operational Due Diligence (ODD)

The Los Angeles County Employees Retirement Association (LACERA), a $75 Billion public pension fund, is seeking proposals from qualified external consulting investment firms to evaluate LACERA’s Investment Office’s Operational Due Diligence (ODD) process. We are seeking firms with extensive experience performing, advising, or evaluating ODD on behalf of institutional clients.

The intent of this consulting engagement is to obtain an assessment and evaluation of LACERA’s ODD processes, both pre-investment and post-investment. Pre-investment ODD is the process of evaluating whether the investment manager has the necessary operational capabilities, controls, and framework to execute on the investment mandate that LACERA is considering. Along with investment due diligence (IDD), ODD is an important component of the decision to invest. Post-investment ODD is the process of evaluating whether the investment manager continues to have the necessary operational capabilities, controls, and framework to execute on the investment mandate that LACERA hired the manager to perform.

LACERA invites qualified firms to respond to this RFP.

Scope of Work

The scope of work should include but is not limited to assessing the following:

Review of the effectiveness of ODD in the execution of LACERA’s investment program.

  • Pre-investment ODD.
  • Post-investment/ongoing ODD.

Consideration in both pre-investment and post-investment ODD should be given to:

  • Evaluating the effectiveness, frequency, and degree/comprehensiveness of ODD performed.
  • Assessing the effectiveness of reliance by LACERA staff on investment consultants and third parties for the performance of ODD in asset classes where those resources are available.
  • Completeness and comprehensiveness of ODD documentation.
  • Assessing whether the ODD Program covers all appropriate risk factors. Examples may include internal controls over operational processes, investment operations, infrastructure and business continuity, compliance, risk management, disclosures, manager organization, fund terms, custody and counterparties, valuation policies, financial statements, and Form ADV’s.
  • Evaluation of ODD for internal investment operations.
  • Communication of ODD efforts to the Board of Investments and utilization of data in managing portfolio.

Input of best practices in managing an effective ODD program.

LACERA has over 100 investment manager relationships with the majority of the total count coming from the Growth functional asset class. Within the Investment Policy Statement (IPS), page 16 of the IPS provides additional background, specifically a breakdown of LACERA’s asset allocation to various categories and the target weights. Please reference LACERA’s Investment Policy Statement at https://www.lacera.com/sites/default/files/assets/documents/general/IPS-111921.pdf.

Submission Requirements

Response to this RFP should be submitted no later than 5:00 PM PDT on June 30, 2022. Send an electronic copy in PDF format via email to kton@lacera.com. To the extent applicable, submissions should also include an electronic copy marked “REDACTED”. The redacted copy should exclude all material from the proposal that the respondent believes in good faith is exempt from disclosure under the California Public Records Act, (California Government Code section 6250 et seq. the “Act”). Individual redactions should appear as blacked out material. Large sections, tables, or entire blank page(s) shall include the word “REDACTED” or “PROPRIETARY” inserted.

Questions Relating to this RFP

All questions, inquiries, and requests for additional information concerning this RFP should be received no later than 5:00 PM PDT, on June 1, 2022, and should be emailed to kton@lacera.com. All questions received and responses thereto will be posted on LACERA's website (www.lacera.com) under the "Business Opportunities" section on or about 5:00 PM PDT, on June 10, 2022.

Tentative Timetable

The following table provides a tentative schedule of important dates and deadlines for this RFP. All dates are subject to modification by LACERA without notice.

RFP release date
May 20, 2022
Written questions from Respondents due date
June 1, 2022
LACERA’s response to Respondents’ questions
June 10, 2022
Intent to Respond closing date
June 15, 2022
RFP due date
June 30, 2022
Finalist interviews
July 13-15, 2022
Selection notification
August 2022
Commencement of work
Upon contract execution