Picking Winners? Investment Consultants' Recommendations of Fund Managers

Jenkinson, Tim, Jones, Howard and Martinez, Jose Vicente (2016) Picking Winners? Investment Consultants' Recommendations of Fund Managers. The Journal of Finance, 71 (5). pp. 2333-2370.

Abstract

U.S. plan sponsors managing over $13 trillion rely on investment consultants for advice about which funds to invest in. Using survey data, we analyze what drives consultants’ recommendations of institutional funds, what impact these recommendations have on flows, and how much value they add to plan sponsors. We examine the aggregate recommendations of consultants with a share of over 90% of the U.S. consulting market. We find that consultants’ recommendations of funds are driven largely by soft factors, rather than the funds’ past performance, and that their recommendations have a very significant effect on fund flows, but we find no evidence that these recommendations add value to plan sponsors.

Item Type: Article
Keywords: Finance, asset management, investment consultants, fund performance
Subject(s): Finance
Date Deposited: 20 Sep 2013 15:00
Last Modified: 21 Oct 2016 13:29
Funders: n/a
URI: http://eureka.sbs.ox.ac.uk/id/eprint/4785

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