- Summary & Methodology
- Provider Ratings
- Transition Manager Profiles
- Abel Noser
- BlackRock
- BTIG
- Citi
- Fidelity
- Macquarie
- Northern Trust
- Pavilion
- Penserra
- Russell
- State Street
- Industry Trends
Past Surveys
Industry Trends
1. How many total portfolio transitions (including legacy and target) did your organization conduct?
2017
2016
| 2016 | 2017 | 1-YR CHANGE |
5-YR CHANGE |
|
|---|---|---|---|---|
| One | 25% | 20% | -22% | -10% |
| Two | 17% | 22% | 29% | -7% |
| Three | 13% | 10% | -18% | -11% |
| Four | 11% | 10% | -6% | -5% |
| Five | 6% | 5% | -22% | -5% |
| More than five | 28% | 33% | 16% | 22% |
| Average | 4.8 | 6.4 | 33% | 40% |
2. Was the number of portfolio transitions higher or lower this year than the previous year?
2017
2016
| 2016 | 2017 | 1-YR CHANGE |
5-YR CHANGE |
|
|---|---|---|---|---|
| More transitions this year | 53% | 57% | 8% | 19% |
| Fewer transitions this year | 19% | 19% | 2% | -35% |
| Same number of transitions | 28% | 24% | -16% | 7% |
3. What was the reason for conducting your transition(s)?
| 2016 | 2017 | 1-Yr Change | 6-Yr Change | ||
|---|---|---|---|---|---|
| Manager Performance | 55 | 54 | -2 | 9 | |
| Change in manager personnel/ structure |
27 | 30 | 10 | 28 | |
| Asset allocation shift | 35 | 38 | 8 | -37 | |
| Rebalance | 22 | 28 | 30 | 4 | |
| Restructure of your fund | 29 | 42 | 43 | 9 | |
| Change in fund/manager benchmark | 10 | 5 | -48 | -64 | |
| Cash flow, in or out | 11 | 21 | 84 | 120 | |
| Other | 5 | 15 | 182 | 79 |
4. What types of securities were transitioned?
| 2016 | 2017 | 1-Yr Change | 6-Yr Change | ||
|---|---|---|---|---|---|
| US equities | 84 | 84 | 0 | 9 | |
| Non-US equities | 62 | 66 | 7 | -4 | |
| Fixed income | 25 | 35 | 41 | 40 | |
| Foreign exchange | 18 | 23 | 29 | 37 | |
| Other | 1 | 3 | 135 | -64 |
5. Did you use a consultant to assist/advise you in the transition(s)?
2017
2016
| 2016 | 2017 | 1-YR CHANGE |
5-YR CHANGE |
|
|---|---|---|---|---|
| Yes | 43% | 42% | -2% | 35% |
| No | 57% | 58% | 1% | -11% |
6. How many transition managers are usually considered for each transition?
2017
2016
| 2016 | 2017 | 1-YR CHANGE |
5-YR CHANGE |
|
|---|---|---|---|---|
| One | 24% | 30% | 24% | 26% |
| Two | 31% | 32% | 3% | 8% |
| Three | 36% | 29% | -17% | -21% |
| Four | 6% | 6% | 10% | 41% |
| More than four | 3% | 2% | -39% | -53% |
7. Do you require a transition management agreement to govern the transition(s)?
| 2016 | 2017 | 1-YR CHANGE |
5-YR CHANGE |
|
|---|---|---|---|---|
| Always | 81% | 90% | 12% | 6% |
| Sometimes | 14% | 6% | -42% | 8% |
| Rarely | 3% | 1% | -84% | -89% |
| Never | 1% | 2% | -100% | -100% |
8. What kinds of transition trades did you conduct?
| 2016 | 2017 | 1-Yr Change | 6-Yr Change | ||
|---|---|---|---|---|---|
| Agency | 77 | 65 | -16 | 23 | |
| Principal | 12 | 23 | 96 | 1 | |
| Hybrid | 14 | 19 | 38 | -42 |
9. When you decide to use a transition manager, how do you usually go about selecting a provider?
| 2016 | 2017 | 1-Yr Change | 6-Yr Change | ||
|---|---|---|---|---|---|
| We have one firm we always use | 23 | 23 | 2 | -5 | |
| Pre-approved list of providers | 65 | 63 | -4 | 13 | |
| Recommendation of our consultant | 16 | 13 | -17 | -18 | |
| RFP/proposals from providers willing to bid | 16 | 13 | -17 | -25 |
10. What is your typical compensation arrangement with the transition manager?
| 2016 | 2017 | 1-Yr Change | 6-Yr Change | ||
|---|---|---|---|---|---|
| Commission on agency trades | 68 | 75 | 10 | -2 | |
| Flat fee | 16 | 14 | -10 | 36 | |
| Principal trade | 3 | 5 | 61 | -39 | |
| Percentage of assets | 6 | 9 | 55 | -16 | |
| No explicit fee | 3 | 4 | 13 | -57 | |
| Uncertain | 9 | 3 | -70 | -39 | |
| Other | 1 | 3 | 142 | -9 |
11. Which benchmark(s) do you prefer to use to gauge transition costs?
| 2016 | 2017 | 1-Yr Change | 6-Yr Change | ||
|---|---|---|---|---|---|
| Volume-weighted average price (VWAP) | 28 | 22 | -20 | -21 | |
| Explicit costs | 31 | 35 | 14 | -25 | |
| Implementation shortfall (T Standard) | 71 | 80 | 12 | 22 | |
| Prior night’s close | 12 | 14 | 21 | -7 | |
| Other | 4 | 4 | -14 | 190 |
12. Do you care if your transition manager derives undisclosed benefits through any of the following means?
| 2016 | 2017 | 1-Yr Change | 6-Yr Change | ||
|---|---|---|---|---|---|
| Sales trading/indications of interest | 74 | 82 | 10 | 6 | |
| Affiliated execution venues/trading desks | 84 | 89 | 5 | 8 | |
| Net trading | 87 | 92 | 6 | 12 | |
| Internal crossing | 66 | 76 | 16 | 19 | |
| Selling your order flow | 86 | 83 | -4 | 0 | |
| Affiliated principal trading | 83 | 86 | 3 | 8 | |
| Rebates from execution venues | 81 | 86 | 6 | 5 | |
| Undisclosed riskless principal transactions | 80 | 83 | 4 | 3 | |
| Revenue sharing agreements w/ unaffiliated brokers/execution venues |
85 | 89 | 4 | 7 |
13. How well do you understand the different transition management models (i.e. sell side/buy side/agency/principal)?
| 2016 | 2017 | 1-YR CHANGE |
5-YR CHANGE |
|
|---|---|---|---|---|
| 5-Full understanding | 18% | 21% | 16% | 58% |
| 4-Good understanding | 45% | 44% | -2% | 55% |
| 3-Basic understanding | 31% | 30% | -3% | -21% |
| 2-Very little understanding | 5% | 5% | -2% | -64% |
| 1-No understanding | 2% | 1% | -47% | -89% |
| Average | 3.73 | 3.79 | 2% | 16% |
14. Do you trust the transition management industry as a whole?
| 2016 | 2017 | 1-YR CHANGE |
5-YR CHANGE |
|
|---|---|---|---|---|
| 5-Trust completely | 3% | 8% | 140% | 1030% |
| 4-Mostly trust | 56% | 67% | 19% | 185% |
| 3-Neutral | 33% | 21% | -37% | -58% |
| 2-Little trust | 5% | 4% | -20% | -81% |
| 1-No trust | 3% | 0% | -100% | -100% |
| Average | 3.53 | 3.79 | 7% | 30% |