California Public Employee’s Retirement System

By Tom Alabaster and Nick Benson 

Outside money managers are facing increasing scrutiny about the value they provide, particularly since the 2008 financial crisis. In a previous publication from September 2014, we wrote that the US Securities and Exchange Commission’s (SEC) increasing examination of fees could cause industry-led change. We are now seeing this change transpire. SEC imposed standards are setting a higher benchmark for disclosure, causing institutional investors to encourage managers to provide more specific fee information from the outset and on a periodic basis.

According to the Wall Street Journal, a number of senior US officials recently wrote to the SEC to demand stricter rules, based on concerns that public pension schemes are not able to provide a full breakdown of fees.