Investment managers provide information that is easier to use and faster to deliver and they are more interested in having clients of different types as being concentrated with one type hurt during the recession. Rising allocations to private equity a few years ago mean private equity firm generational transfers have begun. They represent some risk as, classically, they have not gone well.
Defined contribution clients’ priorities have shifted from choosing investments to the impacts of their choices on beneficiaries. Fees and investment structures are also more important now. Going forward we expect the number of investments a plan offers to decline – some substantially.
Endowments and foundations professionals have access to much more information, lowering the time managers need to educate. Managers can ask more complex questions like, “Why have fixed income in a portfolio that’s around in perpetuity? What interest rate sensitivities need to be managed?”