US - Institutional investors have dramatically reduced commission payments for third-party research products, or so-called "soft dollar" allocations, according to research from Greenwich Associates.
Greenwich explained there has been uncertainty about how regulators would ultimately rule on the issue of soft-dollar arrangements which prompted US institutions to adopt a conservative stance.
Industry-wide soft dollar totals dropped 25% to US$725m in the 12-month period ending February 2007 from $970m the prior year, according to figures from Greenwich Associates’ 2007 US Equity Investors Study.
However, the research suggested institutions were starting to adopt a 'business as usual approach' when it comes to paying third-party brokers for research and other services, based on a growing belief that the Securities and Exchange Commissions (SEC) is not planning a dramatic overhaul of rules.
When institutions were asked to project their intended third-party products/services budgets for the coming year, they predicted a market-wide bounce back to 10% of total commissions.
Investment managers have predicted third-party allocations will jump to 13% in 2008, and banks expect to increase allocations slightly from the current 20%.
A number of pension schemes have been prompted to lock in gains with a move into bonds after the estimated deficit across FTSE 100 DB pension schemes improved by £36bn, over the 12 months ending 30 June last year, JLT Employment Benefits found.
HM Treasury has agreed in principle to give NEST a £329m contingent liability guarantee in the event of the master trust's wind up or closure.
AMP Capital has set up a dedicated team to help institutional investors, including pension funds, invest in infrastructure through direct equity allocations.