GLOBAL - Institutional investors are taking far longer to change investment managers or asset allocations than they did before the 2008 financial crisis, research by Mellon Transition Management (MTM) suggests.
MTM, the transition management specialist for BNY Mellon Asset Management, said since 2008 it had seen institutions take as long as a year to complete the transitioning of their assets away from one investment manager to another after beginning initial consultations with the firm. This compared with a typical period of approximately two to four weeks before the crisis began.
MTM co-founder and chief executive officer Mark Keleher attributes the longer time periods to heightened compliance scrutiny across the institutional investment landscape as plan sponsors and investment managers deal with regulatory changes and governance challenges.
He said transition management trends that began after the financial crisis are continuing today, as institutions continue to move money away from home country equities to both longer term corporate bonds and international equities.
He added: "Transition management has evolved significantly since we opened our doors ten years ago," Keleher said. "While this service originated as a low cost way to change asset allocations or investment managers, the focus is now much more on risk control. Increasingly, transition assignments involve multiple asset classes, illiquid securities, global markets and derivative overlays."
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