Sun, Dec 21, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Study: Consultants add no value to plan sponsors, but have significant effect on fund flows

Wednesday, November 20, 2013

Beverly Chandler, Opalesque London:

Oxford Said Business School academics Tim Jenkinson, Howard Jones, and Jose Vicente Martinez have published a paper entitled 'Picking winners? Investment consultants’ recommendations of fund managers’, examining what consultants bring to portfolio creation.

The authors find that U.S. plan sponsors managing over $13tln of US tax exempt institutional assets (out of $25tln worldwide) rely on investment consultants for advice about which funds to invest in. Using 13 years of survey data, they analyzed what drives consultants’ recommendations of institutional funds, what impact these recommendations have on flows, and how much value they add to plan sponsors.

The academics looked at the aggregate recommendations of consultants with a share of over 90% of the U.S. consulting market and focussed on the US active equity asset class, commenting that it is possible that this is a more efficient than other asset classes, and it is possible that elsewhere the recommendations of investment consultants are more prescient. Despite this, the study revealed that consultants’ recommendations in this asset class are highly influential.

The team writes: "This raises the question why plan sponsors engage investment consultants to help select fund managers without evidence that they add value. We identify three possible reasons. First, in keeping with the hypothe......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Big hedge funds win again on PetSmart, Riverbed, RBS sells real estate loans to hedge fund Cerberus, Talisman energy speculation: Which hedge funds could benefit?[more]

    Big hedge funds win again on PetSmart, Riverbed From CNBC.com: Another week, another set of wins for activist investors. On Sunday, pet supply retailer PetSmart agreed to the largest leveraged buyout of the year at $8.7 billion. Hedge fund firm JANA Partners had been pushing for a sale a

  2. Outlook - Hedge fund manager who remembers 1998 rout says prepare for pain, Bond guru Bill Gross predicts U.S. economic growth to dip to 2%[more]

    Hedge fund manager who remembers 1998 rout says prepare for pain From Bloomberg.com: Stephen Jen landed in Hong Kong in early January 1997 as Morgan Stanley’s newly minted exchange-rate strategist for Asia. He was soon working around the clock when investors began targeting the region’s

  3. Investing - Hedge funds get boost from healthcare in 2014, Paulson & Co takes stake in Salix on heels of inventory issues[more]

    Hedge funds get boost from healthcare in 2014 From Valuewalk.com: The healthcare sector started the year on a turbulent note, as stocks of many major biotechnology companies were battered. However, most of the players in this sector have bounced back. The BarclayHedge Healthcare & Biotec

  4. Opalesque Exclusive: U.S. legal receivables fund launched in August[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Investing in asset-backed receivables is a strategy that has been an integral part of the alternative investment space within the overall fixed income asset c

  5. Comment - High fees and low performance hit hedge funds[more]

    From FT.com: Disenchantment over high fees and lackluster performance may finally be turning the tide against hedge funds, fresh data suggest. Despite generally weak returns since the global financial crisis, hedge funds have enjoyed positive net inflows every year since 2010. This helped assets und