Sun, Dec 17, 2017
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. Mediobanca acquires majority stakes in Swiss hedge fund[more]

    Komfie Manalo, Opalesque Asia: Listed diversified banking group Mediobanca SpA said it has acquired a majority stake in Geneva-based hedge fund firm RAM Active Investments SA (RAM AI), an active and alternative asset manager offering a range of act

  2. Launches - Ex-BlueCrest team to open over $200m hedge fund, Greg Coffey, a hedge fund star who retired at 41, is eyeing a comeback, Brevan Howard plans Greek funds as bond rally signals revival[more]

    Ex-BlueCrest team to open over $200m hedge fund From Bloomberg.com: A team of traders who left BlueCrest Capital Management earlier this year raised more than $200 million for their own hedge fund focused on Asian stocks, according to a person familiar with the matter. Ovata Capital Manag

  3. North America - Miami could attract hedge funds if SALT deductions axed[more]

    From Law360.com: For years, inertia has been Nitin Motwani's greatest foe in his attempts to lure hedge fund owners in the northeast to Miami, which he has pitched as a tropical low-tax paradise. But with the Republican tax bill proposing to eliminate deductions for state and local taxes, he's sensi

  4. Northleaf Capital Partners closes debut private credit fund on $670M[more]

    Bailey McCann, Opalesque New York: Northleaf Capital Partners has closed its debut private credit fund - Northleaf Private Credit I - on $670 million. The vehicle will invest in private credit transactions in Europe and North America, with a primary focus on lending to private equity-backed compa

  5. ...And Finally - The ongoing gun saga in the U.S.[more]

    From Newsoftheweird.com: As elder members of the First United Methodist Church in Tellico Plains, Tennessee, gathered on Nov. 16 to discuss the recent church shooting in Sutherland Springs, Texas, one of those present asked if anyone had brought a gun to church. One man spoke up and said he c