UK – Hewitt Associates says 39 of its UK pension fund clients have gone to so-called unconstrained mandates, up from 20 six months ago.
The consulting firm said the clients – who represent more than £24.7bn (€36.5bn) in assets – have allocated or plan to allocate an average of 16% of their assets to 16 “managers investing without traditional benchmark constraints”.
Hewitt said in February this year that 20 clients, with £9bn in assets, had decided to move an average of 12% of their assets to unconstrained mandates. It said: “The latest figures show that since February, assets being assigned in this way have almost tripled.”
A spokesman declined to name the clients but said they ranged from the smallest to the very biggest of Hewitt’s clients. He declined also to provide a figure for the total assets awarded to such unconstrained briefs. Hewitt first advocated unconstrained investment two years ago.
"In 2003 we highlighted that by trying to manage assets tightly against benchmarks, fund managers are not helping to manage the risks that matter to clients, and are not putting their best ideas into portfolios,” said UK investment consulting head Andrew Tunningley.
"These latest figures clearly show that clients want their fund managers to have the ability to back their investment judgement and are increasingly opting for those managers with the flexibility to do so."