In-House Investment Management: Making and Implementing the Decision
41 Pages Posted: 4 Mar 2016 Last revised: 18 Mar 2017
Date Written: March 1, 2016
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.
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