Rounding out the top 10 stories of 2018 are:
6. Fears surrounding the threat of protectionism and a trade war between the U.S. and China formed a speed bump in an otherwise strong global economy, creating uncertainty among institutional investors and re-evaluations of risks in their portfolios.
7. The announcements in May of the departures of chief investment officers from three of the five largest U.S. public pension plans: Theodore "Ted" Eliopoulos, CIO of the $330.5 billion California Public Employees' Retirement System, Sacramento, announced his imminent departure, as did Vicki Fuller, CIO of the $209.2 billion New York State Common Retirement Fund, and Scott Evans of the $200 billion New York City Retirement Systems. Mr. Eliopoulos left CalPERS in November and is being replaced by Yu Ben Meng in January; Ms. Fuller retired during the summer and a search is still in progress for a permanent replacement; and Mr. Evans left on June 29, replaced by Alex Done, who was named permanent CIO in December after serving on an interim basis.
8. The January launch of the European Union's regulatory reform, the Markets in Financial Instruments Directive II, or MiFID II, which reinforced and replaced existing rules, improving transparency and oversight of derivatives and other financial markets, introducing rules on high-frequency trading and strengthening investor protections. Money managers had to scramble as well to meet the new requirements to pay for external research as well.
9. The seeming end of the Department of Labor's fiduciary rule, developed in 2015 and implemented in 2016, and the emergence of a similar rule perhaps from the Securities and Exchange Commission. The DOL rule broadened the definition of fiduciary advice but in March, the 5th U.S. Circuit Court of Appeals struck down the rule, saying it represented regulatory overreach by the Labor Department, which did not appeal. The SEC, meanwhile, has worked on a three-leg proposal, which includes a standard of conduct for investment advisers that states they have a duty to act and provide advice that is in the best interest of the client.
10. Investment consultant mergers, acquisitions and consolidations. In November, Goldman Sachs Asset Management announced it would acquire Rocaton Investment Advisors' more than $600 billion in assets under advisement in an effort to expand its advisory and discretionary services for institutional clients. Three months earlier, investment consultant Mercer announced it would acquire two firms: Pavilion Financial Group's investment consulting business, and Summit Strategies Group, while AndCo Consulting would acquire the latter firm's public pension fund business. Also, Brussels-based Sofina, a client of investment consultant Cambridge Associates, announced in May it would acquire 20% of that firm's business.n