Fri, Mar 27, 2015
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. Other Voices: Does the hedge fund industry benefit society?[more]

    This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds. It is no secret that the hedge fund industry is viewed negatively by a la

  2. Private credit comes into focus for investors[more]

    Bailey McCann, Opalesque New York: As investors look for a way out of the low yield/no yield environment, private credit is becoming an increasingly attractive asset class, according to a white paper from Bayshore Capital Advisors. Private credit has grown steadily since the financial crisis as

  3. M&A - Hedge funds no longer attractive targets for banks, reinsurers, Blackstone buys stake in Christopher Pucillo’s Solus event-driven hedge fund[more]

    Hedge funds no longer attractive targets for banks, reinsurers From Institutionalinvestor.com: Swiss RE, the world’s second-largest reinsurer, is looking to sell its 15 percent stake in Jersey, Channel Islands–based hedge fund firm Brevan Howard Asset Management. Morgan Stanley reported

  4. Opalesque Radio: Threadneedle expects continuing equity volatility this year[more]

    Benedicte Gravrand, Opalesque Geneva: Investors should expect more volatility, which is signaling a "slow moving" top to the market, KKM Financial’s founder and CEO Jeff Kilburg told CNBC on Monday. And this volatility is going

  5. Hedge funds show strong performance of 2.52% so far in 2015[more]

    Komfie Manalo, Opalesque Asia: The hedge fund industry got off to a strong start in 2015 "completely unmindful" of the poor performance last year, according to data provider Preqin. According to Preqin, following a year which saw the average he

 

banner