GLOBAL - The volatility in global equity markets will test transition managers' trading capabilities, shaking out the good managers from the lucky managers, according to Mercer Sentinel Group.
He added: "Having strong risk execution tools, and a well thought out trading strategy to minimise volatility and implementation shortfall are vital at this time."
His views were echoed by Rick di Mascio, chief executive, Inalytics, and chair of the T-Charter. He said: "When liquidity is difficult, particularly in fixed income and markets are volatile, it brings to the fore the absolutely essential skill that the transition manager has got to have in project planning, timing, sensitivity and ability to listen to the client.
"This is the point at which the really good ones will have projects properly managed and will be listening to the clients and the markets and giving sensible advice."
David Goodman, head of transition management, State Street Global Markets, said: "Effective transition management has always been a function of how well your transition manager trades off potential opportunity cost against market impact."
He added: "People who rely on older models and don't have the data of what is actually happening in the current market might see a wider dispersion in their results."
However, he said most leading transition managers had been spending a lot of money on risk technology and were well placed to handle volatility.
Goodman also confirmed to Global Pensions that Rick Boomgaardt, formerly vice president, transition services at Credit Suisse is to join State Street Global Markets in August.
Visit Global Pensions' www.transitionmanagementforum.com for more on transition management.
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