Transition Management

This is the efficient movement of assets from one investment manager to another. It is usually conducted when trustees decide to alter a retirement fund’s strategic direction or asset allocation. It is also important when managers are replaced or retirement funds are re-balanced between managers.

During the transition process, some costs are incurred that can negatively affect retirement funds’ investment returns. Through its unique approach to transition management, Alexander Forbes Investments aims to control and decrease these costs.

The most cost-effective way of moving assets from one manager to another is to compare the holdings of the two asset managers. Those that match are transferred directly from the original retirement fund to the new one, without going through the open market, thereby reducing direct and indirect costs during transition. Alexander Forbes Investments offers transition management whereby the remaining unmatched (residual) assets are compared with assets held across all the investment portfolios on the company’s balance sheet. This allows for a significant increase in the level of matching during transition.