9-4-718. Investment managers.

(a) The state treasurer may contract with investment managers and pay for investment services and investment advice subject to the following conditions:

(i) All fees and other costs of contracting for and using the services of an investment manager, except transaction costs and custodial fees, shall be accounted for on at least a quarterly basis;

(ii) Without the approval of the board:

(A) No contract with an investment manager shall permit that manager to manage more than fifteen percent (15%) of the total portfolio of state funds available for investment at the time the contract is executed; and

(B) No investment manager under contract with the state treasurer shall be permitted to act as a securities broker with respect to transactions involving state investments managed by such investment manager, unless the transaction can be made without incurring commission or market impact cost.

(iii) The amount of state funds under contract with an investment manager shall not exceed ten percent (10%) of the total assets managed by that investment manager;

(iv) Investment managers shall be selected based upon a competitive process and with consideration given to the historical performance of prospective managers. No investment manager shall be hired unless approved by a majority vote of the board in consultation with the investment funds committee created by this act. The contract with an investment manager may be terminated by a majority vote of the board;

(v) Investment managers shall be paid on a negotiated flat fee or performance basis based upon net assets invested;

(vi) Contracts with investment managers shall be subject to cancellation upon receipt of thirty (30) days notice by either party;

(vii) The state treasurer shall not contract with any person as an investment manager under this subsection unless that person or that person's firm has prior to the execution of the contract, a verifiable CFA Institute (Chartered Financial Analyst Institute) compliant track record of at least five (5) years with respect to the type of investments regarding which the investment manager will provide services or the investment manager is employed by an organized and chartered bank trust company with trust assets in excess of one billion dollars ($1,000,000,000.00). Any prospective manager shall submit to the state treasurer audited financial statements in accordance with the treasurer's rules and regulations and a certified record of the manager's past investment performance prepared by an independent entity;

(viii) Each investment manager shall at least quarterly provide a report to the state treasurer describing the manager's performance relative to mutually agreed upon industry indices and reflecting all brokerage fees and other fees or expenses paid by or fees earned by the manager which are paid by the state under the contract.

(b) Repealed by Laws 2015, ch. 11, § 2.

(c) The state treasurer may contract for services to select an investment manager.