Pension plans and other institutions have been taking more of their investment responsibilities in-house over the last several years, while at the same time alternative investments have become mainstays of institutional portfolios .
Bringing investment responsibilities in-house allows institutions to maintain more control over their fiduciary responsibilities, rein in costs, and keep a closer eye on performance . “Pension plans maintain in-house asset management teams for various reasons, including lower management costs, enhanced relationships with selected companies, ability to access and engage with expert partners directly, and maximization of long-term returns,” noted a recent PricewaterhouseCoopers survey* of the world’s largest pension funds . The survey found that in 2016, plans managed 65 percent of investment mandates internally — up slightly from 63 percent in 2014 — versus 35 percent externally.
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*Source: Global Pension Funds: Best practices in the pension funds investment process, PwC, 2016