In-House Investment Management: Making and Implementing the Decision

41 Pages Posted: 4 Mar 2016 Last revised: 18 Mar 2017

See all articles by David R. Gallagher

David R. Gallagher

Rozetta Institute

Tim Gapes

Centre for International Finance and Regulation (CIFR)

Geoff Warren

Australian National University (ANU) - Research School of Finance, Actuarial Studies and Statistics

Date Written: March 1, 2016

Abstract

We propose a framework that asset owners can use for making and implementing any decision to manage investments in-house. It involves addressing four elements: capabilities, costs, alignment and governance; with key aspects identified for consideration within each element. The framework draws on guidance from the literature, and insights from interviews with executives from the Australian superannuation fund industry. We also report on the interviews, where we uncover striking diversity in the approaches to deciding whether to manage in-house, and the emphasis placed on various aspects related to the perceived benefits, challenges and success factors. Our framework encompasses and unifies the wide range of viewpoints we heard from industry executives. We are supportive of in-house management, provided that the conditions are right and it is implemented appropriately.

Suggested Citation

Gallagher, David R. and Gapes, Tim and Warren, Geoffrey J., In-House Investment Management: Making and Implementing the Decision (March 1, 2016). CIFR Paper No. 094/2016. Available at SSRN: https://ssrn.com/abstract=2740824 or http://dx.doi.org/10.2139/ssrn.2740824

David R. Gallagher

Rozetta Institute ( email )

Sydney

Tim Gapes

Centre for International Finance and Regulation (CIFR) ( email )

Level 7, UNSW CBD Campus
1 O'Connell Street
Sydney, NSW 2000
Australia

Geoffrey J. Warren (Contact Author)

Australian National University (ANU) - Research School of Finance, Actuarial Studies and Statistics ( email )

CBE Building 26C
Kingsley Sreet, Acton
Canberra, ACT 0200
Australia

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