ASIA - Asset managers have seen a trend of European pension funds splitting regional allocations to Asia, following poor performances in Japan.
"It is lazy intellectual thinking to assume because a firm is good at picking stocks in one Asian country it will be good at picking stocks in another," said Beazley.
Beazley claimed it was the specialist providers who were outperforming the generalists.
"The poor returns in Japan will not lead to an outflow of money, but I think people will become less tolerant of underperforming mangers in any of the regions. We have clients adding assets significantly to allocations in Japan," added Beazley.
Mark Roxburgh, head of marketing and client servicing at Nomura Asset Management, echoed Beazley's view. He said he had also seen a pick up in Asia ex- Japan mandates over the last 12 months.
Roxburgh said this was because the outlook for Asia was stronger without Japan. Roxburgh said clients had been adding to existing exposure as well as adding new mandates.
"Europe and US are seen as mediocre from an investment perspective, the Asia ex-Japan block is a better opportunity for absolute returns," said Roxburgh.
In December, Global Pensions reported that the Cardiff and Vale of Glamorgan Pension Fund split its Asian equities portfolio following poor performance by its managers.
AP7 also split its Asia mandates in October: its Japanese and Asia Pacific equity mandates, each worth SEK3.7bn (US$570m), were divided up between Nomura and Société Générale.
Gavin Marriott, product manager, Japanese and pan Pacific equities, Schroders, said the trend was also notable in the US.
"A number of US clients are moving away from a broad pan Pacific strategy and are separating out Japan from Asia ex- Japan," he said.
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".
Smaller FTSE 350 defined benefit (DB) schemes were nearly 15 percentage points less well-funded than larger schemes in 2017, according to a Goldman Sachs Asset Management (GSAM) analysis.
The advent of collective pension systems could help the UK avoid demographic challenges which will make it "impossible" for society to help savers in retirement, experts say.