Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Innovation Investing Conference
    • 2022 Defined Contribution East Conference
    • 2022 ESG Investing Conference
    • 2022 DC Investment Lineup Conference
    • 2022 Alternatives Investing Conference
Breadcrumb
  1. Home
  2. Print
May 28, 2001 01:00 AM

Sponsors less eager to do searches this year

Dave Kovaleski
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    It's the calm during the storm.

    After an end-of-year rush that saw them busy with searches in 2000, consultants have seen a lull in search activity among plan sponsors early this year - typically a time when pension fund officials reassess performance and rebalance assets.

    Many investors, both retail and institutional, are "like deer caught in the headlights," said Donald Stanforth, president with Investment Consulting Group, Davenport, Iowa. Like retail investors, many institutional investors are standing by for now "waiting to see what's going to happen on the other side." However, he hasn't noticed any change in the number of searches at his firm.

    Along with recent stock market volatility, the relative lull can be attributed to the tremendous amount of search activity of the past two years, said Michael D'Agostino, president of Cleveland-based consulting firm Hartland & Co. Because most plan sponsors like to wait at least three years before changing managers, the likelihood of seeing even more manager changes now is lower.

    "We've had a lull in the cycle because of all the energy and effort that went into portfolios the last two years," said Mr. D'Agostino, who suspects search activity will pick up later this year.

    More into alternatives

    One area where he is seeing a growing interest among plan sponsors is alternative investments, particularly over the past year or so. More small and midsize pension funds are following the lead of large pension plans and foundations and endowments in bulking up their exposure to private equity, hedge funds and other alternatives - in part to diversify beyond volatile public markets.

    In contrast to the late 1990s, when the stock market posted unusually high returns, Mr. D'Agostino doesn't see the early 2000s as quite so rosy for equities. "You'll probably see the best returns in non-traditional markets," he said.

    Mr. Stanforth said the volatile market has provided investors with "a great opportunity for a lesson in diversification."

    William M. Mercer Cos. LLC, Chicago, has seen things calm down a bit this year after logging a record number of searches in 2000. Brian Collins, head of the research group at consultant Mercer, said search activity is down slightly from a typical first quarter but down significantly from the last two quarters of 2000. Because of the activity of the last two years, Mr. Collins said, more plan sponsors may be "waiting to see if the moves they made were the right ones."

    The searches that are going on are much broader-based in terms of style and asset class than they were a couple of years ago, when they were predominantly for domestic growth equities, said Mr. Collins.

    Phil Kosmala, manager of investment research at consultant DiMeo Schneider & Associates, Chicago, said his firm also has seen less search activity this year. He said that in 2000 the first quarter was the firm's busiest time of year for searches, but so far this year search activity is down about 25%. The firm picked up a number of new accounts at the end of 1999, he added, which may explain the heightened search activity in early 2000.

    Riding it out

    One reason for the current decline, said Mr. Kosmala, is the skittishness of the market. A year or two ago, more plan sponsors demanded searches to follow "hot" equity performance. Also, plan sponsors realize they are adequately diversified and well-positioned to ride out the market, he added.

    One of the most popular asset classes in terms of search activity this year, said Mr. Kosmala, is domestic small-cap value equities. In addition, real estate equity, inflation-indexed bonds and Treasury inflation-protected securities are seeing increased activity this year, with search activity at the firm up 13% over last year.

    Michael Flynn, president of consultant Stratford Advisory Group, Chicago, said the large number of consultant searches by pension funds late last year might have spurred a decline in search activity in the first quarter as new consultants assessed asset allocation needs. Stratford landed four new clients in January, said Mr. Flynn. He would not disclose their names.

    Not all consultants noticed a difference in search activity. Ennis Knupp & Associates, Chicago; Watson Wyatt Worldwide, Atlanta; and Disabato Associates Inc., Chicago, had search activity at normal level compared with other years.

    Ted Disabato, president of Disabato Associates, is gearing up to do more growth searches as the year goes on. He said the firm's value orientation served his clients well through 2000.

    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    How low is low? Projections say it's not low enough
    How low is low? Projections say it's not low enough
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    Alternatives: Investing Across the Spectrum
    Sponsored Content: Alternatives: Investing Across the Spectrum

    Reader Poll

    May 9, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Are Factors a Thing of the Past?
    Q2 2022 Credit Outlook: Carry On
    Leverage does not equal risk
    Is there a mid-cap gap in your DC plan?
    Out of the Shadows: The Revolution in Shadow Accounting
    The pivotal role of fixed income markets in the ESG revolution
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    May 9, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Innovation Investing Conference
      • 2022 Defined Contribution East Conference
      • 2022 ESG Investing Conference
      • 2022 DC Investment Lineup Conference
      • 2022 Alternatives Investing Conference