(a) Authority to hire.--The board and the Investment Office may hire and fund any investment manager meeting the objectives, goals and criteria under this section.

(b) Prohibition of investment.--An investment may not be made into an investment vehicle that primarily includes private equity, private debt, venture capital or private real estate instruments. An investment in an absolute return strategy shall be subject to manager selection requirements within the absolute return policy.

(c) Emerging manager portfolio manager.--The Investment Office shall appoint an Emerging Manager Portfolio Manager who shall be responsible for administering the program. The Emerging Manager Portfolio Manager shall meet with managers that appear to meet the objectives, goals and criteria of this section. The Emerging Manager Portfolio Manager shall recommend qualified investment managers for inclusion into the main fund and shall further advise the Investment Office if termination of an investment manager is recommended. An investment manager may be terminated by the Emerging Manager Portfolio Manager, with approval from the Investment Office, if the investment manager is underperforming, not generating strong risk adjusted returns, not meeting the criteria to move into the main fund, changes investment processes, has personnel turnover or any other reason which is deemed by the Investment Office to be in the best interests of the system.

(d) Internal Review Committee.--An investment manager considered for hiring into the program shall meet with the Internal Review Committee. The Internal Review Committee shall review each manager considered for inclusion in the program and provide feedback to the Emerging Manager Portfolio Manager. Investment Office approval shall be required to hire a manager into the program, including the Emerging Manager Portfolio Manager, the Emerging Manager Portfolio Manager's supervisor and the Chief Investment Officer.

(e) Approval for exceptional investment manager.--If the Emerging Manager Portfolio Manager, the Chief Investment Officer or other qualified staff have located an exceptional investment manager that does not meet the required criteria established under this section, the Investment Office shall obtain board approval for hiring. The Investment Office shall present to the board the specific reasons for hiring the investment manager.

(f) Contract requirements.--Each investment manager shall manage its portfolio within the constraints of the contract entered into between the investment manager and the board, the Investment Policy Statement, Objectives and Guidelines, any applicable addendum and any applicable amendments to the contract and Investment Policy Statement, Objectives and Guidelines. The Investment Office and board shall have authority to negotiate the investment contract with the investment manager, including the investment guidelines.

(g) Insurance.--Each of the standard insurance provisions in the Investment Policy Statement, Objectives and Guidelines, except for the maximum deductibles, shall apply to the investment manager until the investment manager is either managing over $100,000,000 for the program or is moved out of the program into the main fund. The maximum deductible for both the error and omissions insurance and the fidelity bond shall be the greater of 10% of audited retained earnings or the following:

Asset Size

Maximum Deductible

$0 - $50,000,000

$50,000

$50,000,000 - $75,000,000

$100,000

$75,000,000 - $100,000,000

$200,000

(h) Funding.--Board approval shall be required for total capital allocations exceeding $100,000,000. Investment strategy limitations shall be consistent with Investment Policy Statement constraints. The Emerging Manager Portfolio Manager, the Emerging Manager Portfolio Manager's supervisor and the Chief Investment Officer shall determine the amount of the initial allocation and each subsequent allocation to each investment manager.