US - Russell has launched an aggregate exposure manager which aims to help pension funds deal with increasingly complex portfolio investment.
The new function has been devised to help pension funds to implement the latest strategies and integrate new exposures and risks they create.
Michael Thomas, CIO, Russell Implementation Services, said: “There is an increasingly visible cost associated with the delay between identifying a strategy and getting it into the portfolio, and Russell believes an aggregate exposure manager makes it possible to act more quickly and efficiently.
“Broad investment strategy should remain the domain of the investment committee, but decisions about how approved exposures are implemented should be delegated to an implementation expert.”
The US$25bn (£12bn) South Carolina Retirement System (SCRS) has adopted the function.
Bob Borden, CIO, SCRS Investment Commission, said: “Our investment commission committed to an aggressive timeline which would not have been possible without the use of an aggregate exposure manager.
“Having the platform in place has allowed us to affect significant progress towards our ultimate target while freeing up time to focus on identifying alpha opportunities.”
Russell identified inefficiencies which the manager would try to protect against, such as portable alpha structures which result in redundant trades and private equity investments that create unintended exposures associated with capital calls and distributions.
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