UK roundup: CMA to begin releasing consultants investigation analysis
The government’s anti-trust body is aiming to announce a provisional verdict on its investigation into the investment consultancy market in July, it has said.
In an update on its investigation, which began in September, the Competition and Markets Authority (CMA) also said it would publish several working papers before its provisional decision.
These would cover areas such as analysis of information on fees and quality of service that investment consultants and fiduciary managers provide to clients, analysis of the performance of consultants’ recommended asset managers, and analysis of the potential conflicts of interest related to their provision of fiduciary management services.
The CMA said the papers would not indicate any provisional conclusion on adverse effects on competition (AEC) or remedies to address them, but “some working papers may provide our emerging thinking on potential remedies, if we were to find an AEC”.
Also due out soon, according to the authority, is a large quantitative survey of pension scheme trustees, which was carried out by IFF Research. The work gathered evidence on how pension scheme trustees use investment advisory and fiduciary management services and how they view these services.
The CMA said it was not planning to expand its focus beyond pension schemes as the main client group for investment consultants. This was in part because its emerging analysis of the revenues of investment consultants showed that other institutional investors, such as charities, represented just 6.5% of their business and 9.1% of the assets on which they advise.
London CIV seeks investment software tool
London CIV, the asset pooling vehicle for the capital’s public pension funds, is looking to implement an investment oversight software tool to help it deliver on its strategic objectives.
According to a tender notice, the tool would facilitate manager selection, investment manager oversight, fund rebalancing and scenario analysis, and managing or overseeing associated operational processes including risk, performance measurement, and asset life cycle processes.
London CIV, whose shareholder local government funds have £34.5bn (€39bn) in assets, said the tool should “provide the core capabilities necessary to deliver its value proposition effectively”.
The contract would be for three years with a possible two year extension, and has been valued at £1.65m.
London CIV was set up as the entity to pool the assets of 32 London pension funds with a view to reducing costs and improving investment performance. It has launched 12 funds and attracted more than £6bn since it received regulatory approval in 2016, but it has lost key personnel in recent months and a damning assessment by consultancy Willis Towers Watson has warned the vehicle would fail in the absence of major governance changes.
Medical regulator seeks fiduciary monitor
The trustees of the General Medical Council (GMC) pension schemes are renewing a fiduciary monitor contract. The trustees appointed a fiduciary manager for the defined benefit (DB) scheme in 2013, and shortly thereafter an adviser to provide an independent view on the fiduciary manager’s performance. Aon Hewitt is the fiduciary manager.
The tender comes as the medical regulator is preparing to close its defined benefit (DB) scheme to future accrual from the end of March. It has carried out an engagement and consultation process relating to the proposed closure, and been in discussions with the trustees and a staff forum about the change.
According to a December pensions strategy report from GMC, the DB scheme had a deficit of £12m. The next triennial valuation is due to commence at the end of 2018.