The National Association of Pension Funds (NAPF) has published a new guide to help pensions trustees and managers get to grips with transition management.
The launch took place the NAPF’s annual conference in Liverpool today.
Transition management is the process through which a pension scheme changes its asset/investment structure. It is often characterised by a planned replacement of one or more fund managers in a timely, risk-controlled and cost-effective way to preserve fund value.
The guide, ‘Transition management made simple’, is sponsored by J.P. Morgan. It offers key information on planning, strategy development, execution and post-trade settlement.
In particular, the guide covers: the risks, the costs, performance measurement, and a checklist of questions.
Joanne Segars, chief executive of NAPF, said: “Pension funds do not restructure their assets very frequently, but when they do, the process can be costly and risky.
“Our new guide seeks to provide trustees and pensions managers with relevant information that will help them better understand the transition process.”
Benjie Fraser, practice lead for J.P. Morgan Worldwide Securities Services’ pension fund business in Europe, added: “Transition management is increasingly viewed as industry best practice for asset owners, particularly pension funds, in making changes to their investments.
“This new guide clarifies what is involved in each stage of the transition and helps pension funds ask the right questions in selecting a transition manager.”
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