The benefits of using fewer managers with multiple capabilities are becoming increasingly clear to U.S. pension plan sponsors, according to a new study from consultant Greenwich Associates.
The study found:
- Despite substantial increases in the assets of the average U.S. pension fund, the average number of investment managers used has remained flat, hovering around nine during the past three years.
- In 1995, the average corporate fund with at least $1 billion in assets used 17.2 managers, compared with 18.1 the prior year; public funds and endowments of that size shrunk manager rosters to 17.9 firms from 21.5 and to 16.5 from 20.6, respectively.
- But corporate pension plans with less than $1 billion are increasing the number of managers. Corporate funds of $501 million to $1 billion and $101 million to $250 million increased the number used to 9.7 from 9.1 and to 5.3 from 5.1 respectively.