Deals and People July 15, 2016

Retirement Industry People Moves

EPIC Advisors names director of client service, and PSCA names new directors.
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EPIC Advisors, Inc. has named Spiro J. Theodorakakos as its director of client service. Jeff Gillette, who previously performed the role, as well as that of director of finance, will focus solely on finance.           

As director of client service, Spiro will lead EPIC’s team of relationship managers, account managers, and client service specialists. Spiro joined EPIC in 2007 as a client administrator. Since then he has excelled in multiple client service, relationship management, and sales positions, most recently serving as a relationship manager. Prior to joining EPIC he spent time at Paychex in the 401(k) administration and service department.

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“With his personal and passionate approach to client service, Spiro embodies EPIC’s commitment to providing world-class service and premium retirement plan solutions,” says Manny Marques, president of EPIC. “His experience and personal devotion to his client’s and EPIC’s success makes him the ideal leader for our service team.”

Spiro has earned the Qualified 401K Administrator (QKA) and Qualified Plan Financial Consultant (QPFC) designations from the American Society of Pension Professionals and Actuaries (ASPPA) as well as the Accredited Investment Fiduciary (AIF) designation from fi360.

NEXT: PSCA Names New Directors

The Plan Sponsor Council of America (PSCA) announced the appointment of three new members to its board of directors.

Brandon Diersch is group portfolio manager (Capital Markets) at Microsoft in Redmond, Washington. Diersch serves on PSCA’s Investment and Non-Qualified Deferred Compensation committees, spoke at PSCA’s 69th annual conference, and will host PSCA’s Seattle City Event in September.

Robin Hope is director of human resources at Haag Engineering in Dallas, Texas. Hope is a PSCA member and has more than 20 years’ experience in human resource leadership.

Dawn Rich is director of benefits at Cardinal Health in Columbus, Ohio. Rich has more than 20 years’ experience managing employee benefit plans for large organizations.

“We are pleased to add these experienced leaders to our board,” says Steve McCaffrey, PSCA’s board chairman. “We are fortunate that these professionals are willing to help us advance our strategic initiatives, and serve the interests of the nation’s retirement plan sponsors and participants.”

Terms for new directors generally run three years.

Data and Research July 15, 2016

Plan Sponsors Drive Change in Multi-Asset-Class Solution Market

Cerulli finds that the number of custom institutional multi-asset-class solutions added over the past year “has risen exponentially, even if growth of client assets under management is more uneven as of late.”

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Protecting portfolios from “debilitating large-scale losses” and adjusting for the likelihood of rising interest rates remain primary goals of large-scale institutional investors, according to new research from Cerulli Associates.

The other most frequently cited goals of institutional investors, including corporate and public retirement plans, will sound familiar to engaged plan sponsors, including “achieving lower asset volatility,” “capturing investments with low or no correlation in returns,” and “raising risk-adjusted returns.” Cerulli finds these factors are driving greater interest and demand for “multi-asset-class solutions strategies,” both on the equity and fixed-income sides of the portfolio.

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Especially among larger defined contribution (DC) plans, there is an ongoing push into this domain via custom target-date funds (TDFs), managed volatility overlay strategies, and a variety of other “sophisticated volatility or income-targeting and absolute return investments,” Cerulli finds.  Related to this is steady interest in outsourced chief-investment officer mandates.

“We believe institutional custom solutions represent a substantial and growing market for asset managers, investment consultants, and other financial firms,” Cerulli explains. “Assets in these categories stood at $1.1 trillion at year-end 2015, up from $506 billion in 2010. Assets are expected to grow 34.5% to $1.7 trillion by 2020, reflecting somewhat uneven near-term growth, but accelerating more fully in the medium to long term.”

Asset managers favor this growth, in fact, because “the focus on cost prevalent in the broader asset management industry is largely not present in institutional custom solutions … When it comes to complex custom solutions mandates, however, there is an understanding that managers will be expected to provide more technical and in-depth services beyond basic investment management.”

NEXT: The evolving scope of service 

Cerulli finds that the number of custom institutional multi-asset-class solutions added over the past year “has risen exponentially, even if growth of client assets under management is more uneven as of late.”

In terms of clients’ goals in utilizing these approaches, approximately 60% of strategies “continue to be judged on performance against a traditional market benchmark, as opposed to an objective such as real returns or volatility targets.”

Other findings suggest the present environment for pension de-risking represents “a pause in the long-term future growth of liability-driven investing (LDI) client assets.” As such, nearly half (49%) of LDI managers and others are “managing assets for corporate defined benefit (DB) plans that have frozen accruals in some form,” Cerulli explains. “Nearly two-thirds (63.5%) of corporate DB clients of LDI managers have a de-risking glide path in place. However, most plans are not hitting their de-risking glide path triggers as interest rates have remained low and funded status has stagnated, or, in some cases, deteriorated.”

With so much market complexity, Cerulli says it only makes sense that custom solutions mandates “tend to be complex and clients expect a greater amount of interaction with a manager than in traditional single-asset-class assignments.” A majority (68.4%) of firms overseeing these mandates report having a dedicated team to work with custom solutions clients.

“The most-cited roles serving institutional custom solutions mandates are portfolio manager and investment specialist (89% and 83%, respectively),” Cerulli concludes.

Information on obtaining Cerulli Associates research, including “U.S. Institutional Custom Solutions 2016: The Rising Demand for Outcome-Oriented Client Strategies,” is here. 

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