OUR sixth annual Transition Management survey saw 57% of
respondents perform more transactions, as well as increase the
number of transitions for the year by 5%.
Of the 234 respondents, 75% reported they “completely trust the
industry,” up from 59% in 2016. Participating organizations conducted
an average of 6. 4 transactions (including legacy and target). At 55%,
“manager performance” was again the main reason transitions were
conducted, down 1% from 2016. In addition, 58% of respondents did
not use consultants to advise them in the transitions—a 1% increase
from the previous year. Most respondents (32%) also noted that two
transition managers are usually considered for each transaction. In
terms of benchmarks used to gauge transition costs, implementation
shortfall increased by 12% at 80%. In 2017, 90% of respondents
reported they “always” require a transition management agreement
to govern the transitions, up 12% from last year. The leading security
transitioned was again US equities, which stayed flat at 84%.
2017 Transition Management Survey
For full survey, see Chief Investment Officer September–October 2017.
What types of securities were transitioned?
n 2016 n 2017
1-YR
CHANGE
5-YR
CHANGE*
US equities 84% 84% 0% 9%
Non-US equities 62% 66% 7% -4%
Fixed-income 25% 35% 41% 40%
Foreign exchange 18% 23% 29% 37%
Other 1% 3% 135% -64%
*Note: data available for 2013-2017 only
Was the number of portfolio transitions higher or lower this year than the previous year?
2016 2017
1-YR
CHANGE
6-YR
CHANGE
l More transitions this year 53% 57% 8% 19%
l Fewer transitions this year 19% 19% 2% -35%
l Same number of transitions 28% 24% -16% 7%
20162017
* These percentages are based on rounded numbers
What was the reason for conducting your transition(s)?
n 2016 n 2017 1-YR CHANGE 6-YR CHANGE
Manager performance 55% 54% -2% 9%
Change in manager personnel/structure 27% 30% 10% 28%
Asset allocation shift 35% 38% 8% -37%
Rebalance 22% 28% 30% 4%
Restructure of your fund 29% 42% 43% 9%
Change in fund/manager benchmark 10% 5% -48% -64%
Cash flow, in or out 11% 21% 84% 120%
Other 5% 15% 182% 79%
