EUROPE - Transparency of investment risk is more important to investors than an asset manager's performance or even the company's expertise, according to a survey conducted by PwC and CACEIS. The research said that institutional investors were increasingly placing importance on a range of key criteria including risk-based performance over fees, an asset manager's operational strength and its governance procedures. Dariush Yazdani, partner at PwC Luxembourg's market research institute stated that, "While the traditional expectations regarding performance and fees remain, institutional investors are also looking to other aspects of their relationship and change is demanded; those that are able to adapt first are those that will succeed in the future." The joint research, 'Taking the Reins - A roadmap for navigating the institutional investors' universe', noted the importance of risk transparency in the current climate. "Institutional investors want greater clarity of the investment risk undertaken for the understanding of their portfolio, as well as adherence to their risk principles," the report said, finding that transparency was ranked ahead of performance and expertise when selecting a manager. However, in contrast to the findings, poor quality of reporting was the least crucial of three criteria when seeking to replace an external manager, with poor investment performance seen as twice as important. The emphasis was again different when assessing the overall satisfaction with existing managers, with the key performance indicators being the operational strength of the manager, as well as the quality of advice and the ability to independently verify the controls and procedures in place. The report concluded that it was important to stand by "traditional" foundations of performance and low fees, but also comply with demands for greater information, as well as demonstrating that companies comply with investment principles. "Asset managers must therefore strive to enhance the granularity of information given to institutional investors to maintain the relationship as well as demonstrate to potential clients the reasons for their performance and why they're the best choice," it said.