Asset owners targeted investment costs during crisis, say data firms

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Demand from pension funds and other asset owners for knowledge about asset management fees has intensified during the COVID-19 crisis, according to leaders of two data firms.

Participants at the IPE Summer Pensions Congress 2020 heard from Chris Sier, chair of UK platform ClearGlass and Eric Veldpaus, founding partner of Institutional Benchmarking Institute in the Netherlands, that both firms had seen work volumes increase in the last four months.

Sier said in the investment transparency forum session this morning: “In the pandemic where people have felt themselves almost helpless to deal with external factors that have governed the valuations that you have, you focus on the things you can manage.”

One of those things that could be managed – because there was a number that could be arrived at – was costs, he told the online event.

“So you may not be able to get to grips with the performance part, because it has an extraneous component, but cost is something you can monitor,” Sier said.

“Although it may be because there is this burgeoning surge in demand for transparency in the UK, what we have noticed is our workload has gone up and we have been busier in taking on new clients throughout the past four months,” he said, adding that he could only attribute this extra activity to the pandemic.

Veldpaus said the same dynamic had been seen in the Netherlands.

However, Sier said that among the investor community, ESG work had seen even more of a fillip during the COVID-19 crisis than had activity around investment costs.

“In the hierarchy of interests for pension funds, the other thing people have wanted to get to grips with over the past four months is the degree to which their fund is ESG compliant. So performance and costs, and ESG at the top,” he said.