APP 1526 - Index Portfolio Management and Transition Management Services

The purpose of this requirement is to provide efficient and cost-effective exposure to publicly traded equity and fixed income markets worldwide.? Index management services have been used in asset classes that are efficient, where active management is not consistently effective on a risk adjusted, net of fees basis.? Index management services are also used to allow for short-term and nimble exposure to asset classes and to allow for rebalancing trades that are low cost and that can be implemented quickly.

PBGC uses the Index Management provider to perform transition management.? Transition management service allows for PBGC to make partial or whole sales from portfolios managed by other investment management firms (or the index fund manager), and purchases to add to existing or new portfolios managed by other investment management firms (or the index fund manager).? In this way the Transition manager helps asset owners like the PBGC shape and rebalance their portfolios.?

Transition managers operate in an arm’s length fashion from other asset managers, and are trusted by asset managers, and asset owners (like PBGC) to confidentially handle portfolio position information for both the portfolios that are sold and constructed.? Index management firms tend to offer transition management services, so this search is for both kinds of services.