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The reasons for dropping a manager vary substantially among institutional investors in the US versus those in other countries, according to our new International Institutional Investor Brandscape study. In the UK and elsewhere in Europe, concerns over liquidity far outweigh all other aspects that institutional investors identify when dropping a manager from their lineups. According to the Financial Times*, liquidity issues are of particular concern in fixed income markets, and as a consequence, many asset managers are beefing up the skills and resources on their trading desks to more effectively identify suitable buyers or sellers on the opposite sides of complex fixed income trades.
Second to liquidity issues, European pensions cite lack of communication or responsiveness as a top reason for dropping a manager, signaling the importance of regular outreach and effective service teams in cementing client relationships. Planned shifts in asset allocation, investment team turnover and the desire to reduce fees and expenses round out the top five reasons for cutting a manager in the international institutional market. Continue reading