UK – The chairman of the investment council at the UK's National Association of Pension Funds, Chris Hitchen, has called for pension funds to involve fund managers more in decision making.
He identified various ‘straws in the wind’ – such as liability driven investing, long-term mandates, absolute returns and the ‘best ideas’ approach – as being evidence that this shift towards letting managers take decisions again was already starting to happen.
“These are all ways to give decision-making back to fund managers,” he told the NAPF Investment Conference in Edinburgh today. He saw it becoming an issue for debate over the next few years.
He cited the long-term mandate competition that was run by the Universities Superannuation Scheme and Hewitt Associates – now transformed into the ‘Marathon Club’ as an example where managers were becoming involved again.
But he thought more could be done. “I do wonder if we’re making the best use of fund managers’ expertise,” he told delegates. He saw managers currently being “corralled” into just making small decisions, with the big decisions being made by trustees with the aid of consultants.
He joked that he personally finds it difficult to sell – or fire – managers after good performance. He is chief executive of the £14bn Railpen scheme. “I would like to sell after outperformance,” he said.
Hitchen said the NAPF has published a series of guides for trustees to coincide with the conference – on swaps, hedge funds and derivatives. There is also one on the relationship between trustees and consultants – put together by David Morgan, chief executive of the Coal Pension Trustees which is responsible for the £10.4bn Mineworkers' Pension Scheme.
He said schemes now have a “whole lot of new tools for our toolbox”.