Illinois Public Higher Education Cooperative
Announcement of a Sole Source Purchase
Awarded to:Vendor: Galliard Capital Management, Minneapolis, MN
Amount: An estimated $2,587,500
Terms:
An estimated start date of 7/1/2020 through 6/30/2023, 36 months
Renewals:
None
The University award process may be delayed up to thirty days as this award goes through a state approval process.
The hearing has been cancelled since no vendors registered to attend or submitted comments regarding this notice.
The Chief Procurement Officer for this procurement is now Ben Bagby.
The State Purchasing Officer for this procurement is now Catherine Bradbury.
First published Tuesday, June 9, 2020
The University awarded a contract for Investment Management of Operating Pool Funds to Galliard Capital Management, Minneapolis, MN, for an estimated $2,587,500.
The cost of terminating all Operating Pool Managers (in total as they expire concurrently) and re-hiring new managers could exceed $25 million (excluding man hours) with little to no benefit to the University. The termination of existing managers would result in a liquidation of current portfolio holdings. This would trigger the realization of our unrealized gain/loss position that is largely driven by the direction of interest rates. If we allow these securities to mature at par, we would generally not realize a gain/loss unless the issuer defaults (very unlikely given the high quality nature of the portfolios). Our unrealized loss position has reached nearly $25 million recently and would have been catastrophic or even impossible had the transactions occurred when credit markets were frozen following the peak of COVID market stress.
The University has determined that this purchase is only economically available from this source because the The cost of terminating all Operating Pool Managers (in total as they expire concurrently) and re-hiring new managers could exceed $25 million (excluding man hours) with little to no benefit to the University. The termination of existing managers would result in a liquidation of current portfolio holdings. This would trigger the realization of our unrealized gain/loss position that is largely driven by the direction of interest rates. If we allow these securities to mature at par, we would generally not realize a gain/loss unless the issuer defaults (very unlikely given the high quality nature of the portfolios). Our unrealized loss position has reached nearly $25 million recently and would have been catastrophic or even impossible had the transactions occurred when credit markets were frozen following the peak of COVID market stress.
For instructions on how to obtain a comprehensive purchase description, disclosure or contract forms, contact:
Graham LaMontagne
Phone: (217) 300-6452
Chief Procurement Officer - Ben Bagby
State Purchasing Officer - Catherine Bradbury
The State of Illinois has a policy to encourage prospective vendors to hire
qualified veterans, minorities, females, persons with disabilities and ex-offenders.
