More than 95 per cent of U.S. public pension funds employ at least one investment consultant, according to a new survey by Coalition Greenwich.
The survey, which polled 708 individuals across 575 U.S. institutional investors with assets greater than US$150 million, found there has been a significant increase in the services of investment consultants, as more than 85 per cent of institutional investors employed one such advisor in 2023, up four per cent since 2018 and 19 per cent since 2014.
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More than 70 per cent of respondents said they use investment consultants to identify new or existing managers for investment mandates and half said their advisors are their primary means of identifying potential managers.
Nearly two-thirds of respondents said they rely on their consultants for ongoing oversight of their managers, with consultants representing an important part of the growing outsourced chief investment officer market. As well, nearly 80 per cent of U.S. asset owners said they negotiate with asset managers on fees, a percentage that increased to nearly 90 per cent among institutions with more than $10 billion in assets. These institutions rely on consultants to provide benchmark fee data and, in some cases, actually negotiate directly with the manager.
“In 2014, the top 20 investment consultants in the U.S. held about two-thirds of institutional client relationships,” said Todd Glickson, Coalition Greenwich’s head of investment management in North America, in a press release. “By 2023, consolidation among consultants had driven that share to 85 per cent.”
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