UK - A new study of short-termism has found most UK pension schemes retain their managers for at least five years.
The National Association of Pension Funds (NAPF) and Investment Management Association (IMA) survey found most schemes reviewed fund managers’ performance at least every quarter but kept them on for at least five years.
The survey involved 100 NAPF members and 40 IMA members.
According to a joint NAPF and IMA release, three out of four respondents said their principal fund manager had been managing their current mandate for at least three years and 39% had retained their manager for more than 10 years.
Nearly all schemes reviewed performance regularly but preferred to measure performance against rolling year, or longer, periods.
Commenting on the findings, NAPF chief executive Christine Farnish said: “ Clearly, there is no evidence that fund managers are sacked on the basis of short-term performance. The survey indicates that pension funds are maintaining and building up long-term relationships with their investment managers.”
The IMA’s Richard Saunders added: “This survey sheds light on the way the market for pension fund management is working. It is clear that relations between fund managers and their clients are resilient despite the upheavals in the market over recent years.”
Nearly two thirds of IMA members felt the structure of mandates led to an unduly short-termist approach but only 29% of NAPF members agreed.
IMA members cited investment performance as the most common topic for client meetings or reports, the statement noted.
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