Pension Plan Investment Management Mandates: An Empirical Analysis of Manager Selection

34 Pages Posted: 21 Sep 2004

See all articles by Jerry T. Parwada

Jerry T. Parwada

UNSW Australia Business School, School of Banking and Finance; UNSW Business School; Financial Research Network (FIRN)

Robert W. Faff

University of Queensland

Date Written: September 20, 2004

Abstract

We examine the impact of several factors on the selection of portfolio managers for Australian pension plan mandates. Performance measures do not affect the probability of a mandate allocation. Pension sponsors tend to choose managers with top-quartile five-year performance who have recently beaten a market benchmark. Management expenses have a negative impact on a manager's chances. A surprising result is sponsors' tolerance for high portfolio trading costs. Mandates are spread across manager investment styles. The style and institutional attributes of preferred managers suggest trustees' reputation and prudential concerns matter, particularly for the aggregate annual mandate allocations.

Keywords: Pension plan mandates, fund managers, delegated portfolio management.

Suggested Citation

Parwada, Jerry T. and Faff, Robert W., Pension Plan Investment Management Mandates: An Empirical Analysis of Manager Selection (September 20, 2004). Available at SSRN: https://ssrn.com/abstract=593226 or http://dx.doi.org/10.2139/ssrn.593226

Jerry T. Parwada (Contact Author)

UNSW Australia Business School, School of Banking and Finance ( email )

Sydney, NSW 2052
Australia

UNSW Business School ( email )

UNSW Business School
High St
Sydney, NSW 2052
Australia

Financial Research Network (FIRN)

UNSW
Sydney, NSW 2052
Australia

HOME PAGE: http://www.firn.org.au

Robert W. Faff

University of Queensland ( email )

St Lucia
Brisbane, Queensland 4072
Australia

Register to save articles to
your library

Register

Paper statistics

Downloads
447
rank
62,389
Abstract Views
2,410
PlumX Metrics