RFP Investment Manager Services- for municipal funds
Sample Interview questions

Candidate:_____________

The candidates presentations will probably answer the following possible questions during their opening remarks and company overview:

What is unique about your investment strategy?
Why is your investment strategy successful?
What is your number one investment priority?

Name one quality that sets all successful investment managers apart from the others?  

How does your style and process differ from that of others in the industry?

Please elaborate on your depth of staff and resources, particularly as they pertain to your research capabilities and how they would benefit Grayslake.

What is your definition of “added value through investment management services”.  Give examples(?):

Market knowledge:

Financial markets typically anticipate economic changes.  In your estimate, how many months in advance do you typically anticipate an economic change in the US Government Bond market?

Describe an “inverted” yield curve, what it typically forecasts for the economy and the corresponding impact on the bond market.

When do you expect Fed Chairman Alan Greenspan to raise the rates (fed fund rates)?  What effect would this have on our portfolio if we owned US Government Bonds?
 

Reporting:

Do you report “market” value and “book” value rates of return?  Monthly, Quarterly, Annually? Explain.

If we selected you as our investment manager, what benchmark would you recommend we use as a guide for measuring your performance?

How have you performed these past two years against this benchmark?

Investment philosophy:

Does your investment strategy include taking advantage of “price spreads” by swapping like securities. 

What changes would you make to a portfolio if interest rates were expected to rise dramatically?

If we started doing business with you today, what percentage of our portfolio would you invest immediately vs the percent that you would recommend we gradually invest?         
___% immediate
___% gradual

Operations:

Do you intend to use the services of an affiliate broker/dealer or custodian institution?  If so, describe the financial arrangements with them.  

*Note* Commissions on trades can generate a substantial amount of revenue for the brokerage firm handling the transactions.  Competitive bid vs affiliate broker/dealers will keep transaction costs at a minimum through the competive bid process.

Please walk us through a typical purchase transaction.
ie: Advise, bids, wire funds, confirmation receipt…

On occasion when we may deposit funds late in the day, say after 2pm, how will you invest the funds?

Will you collateralize our funds?