EUROPE - Selecting active managers who outperform on a constant basis has proven difficult for pension funds, a panel of pension experts has argued at a seminar of the annual IPE Awards.
Judy Saunders, chief investment officer of the West Midlands pension funds, believes the specialist managers who deliver the right amount of alpha return is worth his price, though added: "Six out of 10 managers do not deliver, so a lot of funds pay extra for no alpha."
Karl Olbert of Funds@Work, a Frankfurt-based strategy consultant, agreed with Saunders, saying: "It is very difficult to select managers who outperform on a constant basis."
Saunders stressed while in-house management was less expensive, choosing the right specialist manager can prove more lucrative for a pension fund.
The panel also discussed the higher cost of multi-managers, though was adamant pension funds need the extra return that more complex asset management strategies give pension funds.
To that end, Patrick Dunnewolt, business development manager of Dutch fiduciary manager Mn Services, concluded: "Increasing the level of professionalism is a good thing for pension funds."
Luis Vadillo of consultancy firm Mercer's Spanish office also claimed the multi-management has value, though stressed pension funds should look for managers who deliver qualitative analyses.
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