UK - Schemes fear they could be missing out on high investment performers because consultants rule out fund managers that have undergone key personnel changes.
Investment consultants remove fund managers from their “buy lists” whenever there are significant managerial or desk changes because they could result in staff departures or alterations in working practice.
This interim spell is known as a “quiet period” and consultants say that it is used to monitor the changes so that they can get an accurate assessment of how firms have been affected.
But fund managers say they are finding it very difficult to get reinstated on to consultants’ buy lists, even if they are outperforming.
UBS has just come out of a year-long quiet period following the appointment of former Merrill Lynch Investment Managers head of fixed income David Jacob.
Consultants have admitted that the appointment has worked against UBS and that it is unlikely to win any fixed income mandates in the medium-term.
One senior consultant explained: “UBS has had a number of personnel changes, not least its head of bonds, and all that takes time to settle down.
“Our net view of UBS is pretty positive but there are a lot of good bond managers out there and they’ve not been through these sort changes, so they are a more favourable choice.”
But Diageo UK pensions director Graeme Robertson said he was concerned about potentially missing out on better performing managers.
“We do rely quite heavily on consultants’ research departments, but if we are aware of other managers that we think should be considered, we’d ask the investment consultant to include them in the beauty parade or come up with some extra analysis.”
Six Continents head of pensions Trevor Jones agreed.
“If we feel strongly about including somebody in a beauty parade we would find out why they weren’t included in the suggested list.”
Buck Consultants senior investment consultant John Walbaum said fund managers could keep themselves on consultants’ buy lists – even if they underperformed – provided they could account for the changes and kept an investment process they felt they could deliver.
The Pensions and Lifetime Savings Association (PLSA) is in the process of convening an industry-wide group to take forward the work of the Institutional Disclosure Working Group (IDWG).
The Transfers and Re-registration Industry Group (TRIG) has given its support to an initiative which aims to complete occupational pension transfers within three weeks.
Scottish Widows has completed a bulk annuity deal for the Hitachi UK Limited Pension Scheme.