US - Callan Associates is looking at ways to offer a fund of funds type arrangement in the small cap space. To date Callan has not crossed the line from consulting into management, although it does offer consulting services to investment managers.
Such a move from Callan Associates would find it in the company of Wilshire Associates, Russell Investment Group and Mercer Human Resource Consulting, which all offer consulting and investment management services.
“We have written a research paper on the efficient use of small cap funds and we are looking at various ways to implement that,” said Ronald Peyton (peyton), president, Callan Associates. “We have already helped one client implement it.”
Peyton added that the consultant’s plans were not about replicating Russell’s model, calling it a “consulting solution”.
“If you look around the US, most consultants, outside of Russell, have taken discretion in their alternatives, real estate or private equity businesses and we haven’t,” said Peyton.
“Our model has always been that there is a line between consulting and management and if you cross that line and do management, how can you possibly oversee what you are doing? If I am making decisions on real estate, how can I possibly say what a good job I did?”
Callan’s focus on the small cap space comes at a time when many US small cap funds have closed to new business over capacity issues.
The US Securities and Exchange Commission’s report on pension consultants released in May found that based on the recommendations of their pension consultant, many pension plan clients choose to utilise an affiliate of the pension consultant to provide various services, including investment management.
Consultants who take discretion on who to fire and hire is reportedly a further element of the SEC’s examination.
Jonathan Stapleton asks whether newly-accredited professional trustees should be a statutory fixture on pension scheme boards.
Savers are being warned by the Insolvency Service to guard their pension pots from investment scammers and negligent trustees as it winds up 24 companies.
Respondents say they should only be required in certain situations as the system is not broken.