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Questions & Réponses

General questions

Q: Are specific benchmarks foreseen for the different lots?

A: Yes, the benchmarks associated to the different lots are referenced in the draft version of the Issue Document, the latter being part of the consultation documents. They are as follows:

  • Lot 1: Citigroup Eurodeposit 3 months expressed in EUR;
  • Lot 2: Barclays Capital Euro Aggregate excluding securitized assets Index Total Return expressed in EUR;
  • Lot 3: Barclays Capital Global Aggregate excluding securitized assets Index Total Return hedged into EUR;
  • Lot 4: MSCI World Total Return (net) expressed in USD and converted into EUR.

Q: Are "carve-outs" accepted as reference (for example for performance figures)?

A: "Carve-out" portfolios of broader mandates are acceptable if the composite fulfils all GIPS requirements and disclosures regarding "carve-outs". The use of "carve- out" has to be fully disclosed.

Q: If a tendering company operates with a multi affiliate structure, can two (or more) asset management companies within that structure compete for the same lot, knowing that the given asset management companies are independent from each other?

A: Each tendering company should decide which of his strategies best suits the investment objectives and guidelines of the FDC and that given strategy should be used in the current request for proposals. One proposal can not include several strategies. It needs a separate proposal from a separate legal counterparty (fulfilling the minimum criteria and having the appropriate approval on its own) to hand in proposals for different strategies.

Q: With respect to Lot 3 and Lot 4, would FDC be open to have a section of the allocation managed as a Smart Beta strategy? Should this be a possibility how much, if any, weight will be placed on the historical track record of the Smart Beta strategy?

A: With regard to Lot 3, the tendering company is free to choose the best investment strategy that is in line with FDC's investment guidelines and restrictions. The tendered mandate of Lot 4 is a fully indexed mandate that does not foresee an active component.

Q: With respect to Lot 3, can a tendering company hand in a track record based on the standard Barclays Capital Global Aggregate Index, i.e., a track record including securitized assets?

A: With regard to Lot 3, FDC will accept track records including securitized assets knowing that each tendering company should decide which track record is the most representative for the Lot for which a proposal is submitted. Furthermore, if a track record deviates from the guidelines (for example by including securitized assets), please state this clearly in the questionnaire and state the performance impact of any investments not in line with the benchmark associated to a respective Lot.

Q: Are off-benchmark positions allowed for any Lot?

A: No, off-benchmark positions are not allowed.

Q: Is a full delegation of the portfolio management services to an entity within the same group allowed?

A: Yes, this is allowed.

Q: With regard to Lot 4, mandates would allow a tracking error of 0.5%. Would FDC consider an offer that actively uses this tracking error budget vis-à-vis a passive solution?

A: The tendering company is free to choose the best investment strategy that is in line with FDC's investment guidelines and restrictions knowing that the tendered mandates of Lot 4 are fully indexed mandates that do not foresee an active component. Nevertheless, another strategy can be handed in as long as the minimum requirements and FDC's investment guidelines and restrictions are respectively stay fulfilled.

Questions regarding the consultation guidelines

Q: The Consultation Guidelines mention on page 8 under section 2.9 Minimum requirements and appropriate approval that the tenderers must have, at the moment of proposal remittance, a minimum of assets under management for institutional clients of EUR five (5) billion for Lot 1, Lot 2 and Lot 3 and EUR ten (10) billion for Lot 4. Does that mean that for each Lot (Lot 1, Lot 2 and Lot 3), the assets under management of related funds managed must be equal or larger than EUR 5 billion (hence a total of EUR 15 billion)? Alternatively, does that mean that the sum of assets under management for Lot 1, Lot 2 and Lot 3 aggregated must be equal or larger than EUR 5 billion?

A: To tender for the Lots 1, 2 and 3, it is sufficient to have a minimum of assets under management of EUR five billion for institutional clients (as defined in the Consultation Guidelines), this regardless of the Lot considered. This being said, a tendering company with more than EUR five billion assets under management for institutional clients can for example submit offers for all three Lots (i.e., Lot 1, Lot 2 and Lot 3).

Q: With regard to the minimum requirements set out in section 2.9 of the Consultation Guidelines, can you please confirm whether a UK based firm will be considered as an investment manager for these mandates? Alternatively, are UK firms excluded?

A: For the current request for proposals, FDC is still considering the United Kingdom as a member state of the EU and United Kingdom based firms holding the appropriate approval and authorisation as asset managers within the EU. This being said, the FDC can currently not foresee possible implications of the United Kingdom leaving the EU.

Q: With regard to the minimum assets under management requirement set out in section 2.9 of the Consultation Guidelines, can you please confirm at what level this requirement has to be considered?

A: The minimum assets under management requirement has to considered at contracting counterparty level (i.e. at tendering company level).

Questions regarding the Questionnaire

Q: Does question 6.11 refer to providing an example of an internal investment research piece (for example a stock note) or a periodic report? If the latter, is this required at fund level or at firm level (for example a PRI report)?

A: Internal investment research is part of the investment process and can be used to support for example the answers to questions 6.2, 6.3 or 6.12. The tendering company should show in question 6.11 whether it is able to provide a client specific sustainability report on portfolio/mandate level.

Q: Questions 2.16 and 10.2 are relative to GIPS compliance. Is not being GIPS compliant a serious disadvantage to qualify for the request for proposals?

A: GIPS compliance is not a minimum requirement and therefore even without GIPS compliance a tendering company is eligible for the request for proposals. However, GIPS compliance is relevant for the questions specifically addressing the subject of performance in the Questionnaire and a missing GIPS composite can have an influence on the respective scoring.

Q: Is question 5.11, item i) also relevant to the indexed equity mandate highlighted under Lot 4?

A: Sometimes an investment strategy of an asset manager might not be in line with the tracking error target of the FDC. In this case, it might be necessary to adopt the strategy to scale the tracking error to the desired level. Please describe in the answer to this question whether you are able to do so.

Q: Is question 6.10 strictly referring to mandates or can funds and/or products also be referenced?

A: The given question refers to a tendering company's experience with regard to incorporating a sustainable approach/sustainable research, this regardless of the legal form of the investments (mandates, funds, etc.).

Questions regarding the Issue Document

Q: Could you please provide us with some clarification about how you define the "adjusted delta" method?

A: To calculate the economic exposure, the real exposure of derivatives (using the respective deltas) has to be calculated.