The UK National Association of Pension Funds (NAPF) has published a guide aiming to help pension funds fully understand transition management and advising what to consider when choosing a transition manager.
The guide, which is the latest in the NAPF’s Made Simple series, looks at the benefits of transition management, its costs and risks and how they can be managed.
“Transition management can offer many benefits to pension funds, but choosing the right transition manager can be challenging and this is why it is important that pension funds have the right information at their fingertips,” said Chris Adolph, head of transition management Emea, at Russell Investments.
The guide follows a paper published by the Financial Conduct Authority on February 10 2014 which highlighted the need for more rigorous governance by investors as well as improved transparency and communication at some transition management firms.
“Pension funds’ interest in transition management has been growing in recent years due to a difficult market environment, in which transition management can offer some significant cost savings and greater scrutiny from the media about transparency in the process,” said Joanne Segars, CEO of the NAPF.