Asset Management CultureNovember 5, 2025

How Manager Relationships and Transparency Standards Are Evolving

Alternative assets in DC plans; transparency and accountability requirements; and a shift in investor expectations are driving changes in the relationship between limited partners and their general partners.

Reported by Matt Toledo

The relationships between asset allocators, investment advisers and their asset managers are evolving at a time when fees, transparency and performance are under more scrutiny than ever—this was the topic of a media panel discussion hosted by portfolio analytics provider Venn by Two Sigma last week.

As asset allocators seemingly have more analytical tools to evaluate their managers each year, panelists from Venn, Apollon Wealth Management and Pan Capital discussed how they evaluate their manager relationships.

Manager Transparency and Accountability

Panelists noted what good transparency and accountability from their managers looked like. Eric Sterner, CIO of Apollon Wealth Management and previously a vice president of PGIM’s strategic investment research group’s portfolio construction team, noted that good accountability means the story their managers tell them matches up with their investment performance and the mandate for which the manager was selected.

“There is nothing more frustrating when I’m telling our clients that, ‘Hey, we’re leaning into the momentum, or small cap, or value,’ and I happen to be right, but I don’t have the results behind it, because the managers that I’m employing are not delivering that,” Sterner said. “So that’s what I think about accountability—delivering on the story.”

The view of accountability in the industry has changed significantly, noted Venn CEO Marco Della Torre. He noted that it has been interesting to see how what used to be differentiating is now demanded by allocators.

“Who were the folks back then that were seeking accountability to make it part of their brand?” Della Torre said. “Because now I think there is an expectation of accountability, but back in those days, there were a lot of things people were doing that maybe relied on kind of differentiating from a 60/40 portfolio or something that was pretty superficial.”

Edouard Robbes, president and chief strategy officer of Pan Capital, and previously an institutional allocator at Thales, noted that for him, accountability starts with clarity. Managers “need to perform: That’s job No. 1. But then you need to explain how you performed, why you performed, and tie that to the process you sold the investors.”

Panelists reinforced that managers should put effort into pitching their firms to allocators and then should stick to the strategies they sold to their limited partners. There is risk when managers sell themselves as doing one strategy but then execute another.

Sterner said it is important for private asset managers to be able to see the bigger picture beyond just what they are selling.

Don’t “only show me what your strategy [is], but how does that strategy fit in a portfolio? What does that deliver?” Sterner said. That then “helps me picture how I [could] use it. If you’re just going through the tear sheet and just going line by line, I could do that on my own.”

He advised anyone trying to sell him on a new strategy to focus on his client base and how it would work for them.

“There’s just so many different investments, asset classes. … And as we talk to clients and high ultra-net-worth clients, they have more sophisticated demands and needs. Figuring out how this might fit into [the] overall portfolio, what type of client, what type of situation would I use it for—that’s how [managers are] going to get my attention,” Sterner said.

Alts in DC Plans

Panelists also discussed the push to get alternative investments into the investment menus of defined contribution plans, or if not as stand-alone investments, into target-date funds. They also discussed whether private market investments are worth it for retail clients.

Sterner noted that there is a vast range of returns in alternative asset classes compared to public markets, making the due diligence process for selecting alts managers much more crucial.

“You look at large- and mid-cap [stocks], the 95th percentile for [their] annual returns is 11.5%,” Sterner said of asset class returns during the 20 years between January 2005 and March 2025. “The fifth percentile is 6.5%, so that’s a pretty narrow range.”

For private credit, Sterner noted, the 95th percentile of annualized returns for this period was 17%, and the fifth percentile was negative 2%. For private equity, the range was between 38% and negative 7%. The wide disparity between different managers’ returns means that “the due diligence process is that much more crucial,” when considering private assets for inclusion in DC plans or for retail.

Sterner also noted that if his firm or client did not like a public markets’ manager, they could terminate the manager easily. Because alternatives, by definition, are less liquid, “you’re married to them for a bit longer, and it takes a longer time to unload those positions, nothing is going to ruin a client relationship more than a bad private market experience, where they’re not happy with the investment they’re in and they’re locked in that investment for 10-plus years.”

Della Torre noted that this issue is when a total portfolio approach to investing can shine brightest, “because inherently, these folks who have publicly traded portfolios, [are] going to be thinking about alternatives for the first time, and so thinking of it holistically at the outset is going to be critical, but then also communicating in a way they can actually understand what they’re signing up for.”

Della Torre continued that it is important that retail and DC plan investors fully understand their alternative investment options. “It’s easy to get a nod. You can’t stop there. You have to really invest in however they’re going to learn what you’re telling them.”

The Evolving Relationship Between Manager and Allocator

Panelists also discussed how the allocator and manager relationship will evolve over the next 10 years. The experts noted how new technology and analytical tools are making the manager evaluation process much easier.

Sterner noted that managers are putting more insight into their strategies than they used to.

“Now I think many of them understand, ‘Hey, I’m here to help you put together some portfolio ideas and give you some thoughts on how you can build better, diversified portfolios.’”

Robbes advised allocators to look to the large public Canadian pension funds, which he said are on the cutting edge of innovation in the way they invest.

“The playbook is already out there: It’s co-investments, it’s strategic relationships that go beyond allocating to fund A,” Robbes said. “Those pension funds don’t want more [general partners], they want [fewer], but they want those GPs to deliver solutions across the liquidity spectrum.”