We study a model of delegated investment within a noisy rational expectations equilibrium framework. Portfolio managers can acquire costly private information about asset payoffs but incur portfolio management costs, and are compensated by investors to make investment decisions on their behalf. We show that the optimal contract features a benchmark component that mitigates the agency frictions arising from portfolio management costs. The precision of managers' private information is determined endogenously in market equilibrium, with private and public information acting as substitutes. As portfolio management costs increase, both the performance-based and benchmark components of the optimal contract become more sensitive to investment outcomes, while fewer private signals are incorporated into prices, reducing market informational efficiency. We further show that when a social planner places sufficient weight on the welfare of direct investors and liquidity providers, the socially optimal equilibrium achieves greater price informational efficiency than the decentralized equilibrium. The talk will focus on the interaction between optimal contracting, information acquisition, and market efficiency, together with the economic intuition underlying these results.