What are the benefits of using a Transition Manager?
Minimise the cost of change
Trustees are becoming increasingly aware of the costs, both direct and indirect,of shifting assets. Many of these costs are quantifiable and manageable. A transition manager will plan, manage and monitor the transfer of assets to ensure that costs are contained.
Managing and monitoring risks
There are a number of risks involved in transferring assets. These include operational risks, risks resulting from delays, liquidity risk, and market movement risk. These can be reduced through centralised project management, specialist investment expertise, sophisticated quantitative and risk modelling, derivative expertise and extensive dealing capabilities.
Fund preservation and portfolio optimisation
Even a temporary change in asset allocation as assets are being transitioned can affect the performance of a portfolio. The faster assets are moved to the target portfolio, the more likely an optimal outcome. A Transition Manager uses sophisticated investment techniques and derivatives to protect the current fund value, mirror the target portfolio and optimise exposure the market during the transfer.