Gilbert L. Beebower, a pioneer in institutional investment consulting, leaves a legacy in research that includes a groundbreaking study he co-authored establishing the primacy of asset allocation in determining portfolio performance.
Mr. Beebower, who died Oct. 25, was 79 and a longtime resident of New York.
Mr. Beebower spent much of his career in the institutional investment management industry at Oaks, Pa.-based SEI Investments Management Corp., where he was executive vice president and renowned in research. He remained affiliated with SEI until his death, said Dana Grosser, SEI spokeswoman.
While at SEI, Mr. Beebower co-authored — with Gary P. Brinson and L. Randolph Hood — the landmark study, “Determinants of Portfolio Performance,” published in the July/August 1986 Financial Analysts Journal. The study found that asset allocation policy mix drives 93.6% of the average pension fund's return variation over time. Active management, from portfolio selection and market timing, accounted for the rest of the variation, according to a Pensions & Investments report.
The study became a foundational rationale for asset allocation policy and implementation by institutional investors.
On April 30, the Investment Management Consultants Association awarded its Matthew R. McArthur Award to Messrs. Beebower, Brinson and Hood for their “outstanding contributions to the profession of investment management consulting,” including their asset allocation study, which was updated in 1991, according to an IMCA statement issued at the time. Only Mr. Brinson, now president of GP Brinson Investments, was present at IMCA's Seattle conference to receive the award, said Ryan Hoffman, IMCA spokesman. Mr. Hood is chief investment officer, U.S. employee benefit plans, Prudential Financial Inc.
Following the stock market crash of Oct. 19, 1987, Mr. Beebower was appointed a member of the professional staff of the Presidential Task Force on Market Mechanisms, known as the Brady Commission, examining the causes and recommending remedies to avert a repeat of the collapse.
Before joining SEI, Mr. Beebower was a pioneer in investment consulting as the industry was gaining its footing with pension funds, working at A.G. Becker Inc.'s funds evaluation group (which SEI purchased in 1983), O'Brien Associates and James H. Oliphant and Co., all investment consulting firms.