Learning about individual managers’ performance in UK pension funds: The importance of specialization

Abstract

This study examines the performance of managers over time, as well as its persistence, taking into account both manager characteristics and market conditions. Applying parametric and non-parametric methodologies, we examine a sample of UK equity pension fund managers. Our results help to understand the importance of manager assignments in the industry and reveal the importance and benefits of management specialization. We find certain manager performance persistence, revealing that some managers are better than others and possess superior investment skills. Additionally, we find that managers achieve better results when they run a single fund or one investmentobjective funds, which allows managers to focus on specific tasks. Nonetheless, manager performance varies with market conditions and highlights managers' different skills. Specialist managers perform better in bullish markets, and generalists perform better in bearish periods.

Investment Performance of Private Pension Funds in Selected Asian Countries: The Role of Fees and Management Companies

“…In addition, a study by Alda et al [5] adopted the CAPM and Carhart 4-Factor model and indicates the outperformance of the U.K pension funds and only the momentum factor is negative whereas the other factors are positive. Moreover, the study has also incorporated personal traits like gender and the experience of fund managers, and it was found that these personal traits do not have any significant impact on funds' performance, while management strategy such as specialization skill enables the managers to perform better than do the generalized managers.…”

“…Hence, private pension funds may be the appropriate saving vehicles that could complement the retirement savings of retirees. Nevertheless, there is only little empirical evidence found to support this idea as only Chu and McKenzie [5] have shown the outperformance of equity pension funds in Hong Kong. Hence, despite the empirical evidence of the outperformance of pension funds in developed countries like the U.K and U.S (Coggin et al [3], Adami et al [4] and Alda et al [5]), the presence of superiority of pension funds in Asia is not proven.…”

“…Nevertheless, there is only little empirical evidence found to support this idea as only Chu and McKenzie [5] have shown the outperformance of equity pension funds in Hong Kong. Hence, despite the empirical evidence of the outperformance of pension funds in developed countries like the U.K and U.S (Coggin et al [3], Adami et al [4] and Alda et al [5]), the presence of superiority of pension funds in Asia is not proven. Besides, previous studies which have shed lights on this research area have mainly prioritized on equity funds (Coggin et al [3], Chu and McKenzie [6], Alda et al [5]), as only Adami et al [4] has examined the performance of pension funds in the bond universe.…”

Estilo de investimento de fundos de ações e regionalidade: explorando o efeito de notícias sobre empresas envolvidas em corrupção

“…A idade se mostrou significante em duas formas de mensurar o desempenho com sinais opostos, sendo negativo (Berggrun et al,2014;Mendonça et al, 2017;Silva et al, 111 2018) para o Alfa de Jensen e positivo (Milani & Ceretta, 2013;Alda, Andreu, & Sarto, 2017) para o retorno anual, podendo indicar que, em alguns casos, a idade do FIA representa sua sobrevivência no mercado e o prestígio do ponto de vista de seus investidores (Golec, 1996). (Bertin & Prather;2009;Golec, 1996).…”

“…Idade do Fundo (AGE) -Logaritmo natural da idade do Fundo no início de cada ano da amostra. Considerando que estudos anteriores apontam tanto relação positiva (Golec, 1996;Milani & Ceretta, 2013;Alda, Andreu, & Sarto, 2017) quanto negativa para essa variável (Berggrun, Mongrut, Umana, & Varga, 2014;Mendonça, Campani, & Leal, 2017;Silva et al, 2018), o sinal esperado é indefinido.…”