More pension funds go overseas

ESTIMATES suggest between 15% and 20% of Irish pensions are managed by overseas pension investment managers.

That compares with just 5% some years ago.

Pension expert Tom Geraghty of Mercer, which carried out a recent survey, said it was good news for pension funds seeking the best returns they could get for their fund. That is not to decry the ability of Irish funds managers, he said.

A new survey by Mercer shows Bank of Ireland Asset management ranks second over a 10-year stretch across the globe.

Mercer Investment Consulting yesterday released the first of its quarterly surveys on the performance of both domestic and international fund managers.

It is based on a representative global equity composite from these respective organisations.

Commenting on the survey Mr Geraghty, who is a partner at Mercer Investment Consulting, said the survey’s objective was to provide both trustees and sponsors of pension plans in Ireland with as much information as possible.

With this available to them they were better placed to make judgements about who they wanted to manage their pension funds he said.

That has become an increasingly important consideration as equity markets have been under severe pressure and pension fund performance way under par for a number of years.

Mercer has seen a discernible trend among clients towards specialist manager arrangements, said Mr Geraghty.

“This trend is on the back of more and more pension plans creating bespoke investment strategies that are tailored to the specific liabilities of their schemes.

“This is in contrast to a peer group or average market approach,” he said.

“In this context, the playing field for Irish-based trustees has broadened to evaluating not only Irish investment managers but also international ones.

“At the end of the day it's all about giving trustees a wider pool of investment managers to pick from and to facilitate them hiring the best managers for the strategy and asset structure in question.”

Mr. Geraghty noted the increased exposure of Irish pension assets to international investment managers.