AIDEA waives $1 billion minimum for firms bidding to manage $25 million of its money

The Alaska Industrial Development and Export Authority has waived its $1 billion asset minimum and three-year operating history requirement for outside firms competing to manage about $25 million of its money. AIDEA told bidders of the change Tuesday, 10 days before proposals are due Nov. 20 at 2 pm Alaska time.

Chief Procurement Officer Kelly W. Noble signed Addendum No. 4. "Accordingly, Offerors are not required to meet the minimum $1 billion in assets under management or the three-year firm operating history requirement to submit a proposal under this solicitation," Noble wrote. Every other requirement stays in place.

AIDEA's internal Investment Committee voted to waive the rule Oct. 9, according to the addendum. The request for proposals, published Oct. 29, still listed it as a minimum qualification and warned that missing a minimum qualification could make a proposal non-responsive.

The committee, made up of at least three AIDEA employees appointed by Executive Director Randy Ruaro, documented the waiver in an Oct. 14 memo to Ruaro, who signed it as acknowledged. The memo cites "the lack of firms that would be able to meet the requirement" and AIDEA's "unique investment needs."

The investment policy, adopted by the AIDEA board April 10, lists seven requirements for outside investment managers. It lets the committee waive one or more by majority vote "to accommodate the circumstances specific to a potential Investment Manager," with the reason documented for the executive director's review. No board step is required. This waiver applies to every bidder and was granted before any proposal arrived; no record names a specific manager. Ruaro makes the final selection and is not bound by the committee's recommendation.

AIDEA says in the request for proposals that it wants to diversify its investments "based on an excess of cash savings, and a renewed desire to bring on outside investment managers." Its current fixed income managers are Alaska Permanent Capital Management and Barrow Hanley.

The new managers would handle fully liquid, publicly traded fixed income aimed at beating the Bloomberg U.S. Aggregate Bond Index, a common bond benchmark, with what AIDEA calls "a higher risk/return dynamic." Below-investment-grade debt, which the addenda call high yield, is in scope, and Addendum No. 3 sets no specific limit on it.

The roughly $25 million is a shared initial allocation that AIDEA may increase later, and no award guarantees a firm any assets.

The request gives qualified Alaska offerors a 10% preference in total evaluation points. AIDEA plans to issue a notice of intent to award Dec. 4 and issue contracts Dec. 16.