Asset owners make changes to their portfolios from time to time: replacing an underperforming asset manager, changing the investment strategy, rebalancing asset allocation, making large contributions or withdrawals to name a few. There are also more elaborate changes that take place such as adopting member choice, changing from defined benefit to defined contribution and moving the fund into an umbrella arrangement. It is essential that investment performance is not disrupted by these changes, that trading costs and market impact are kept at a minimum, and that complete control over the process is maintained. The professional management of such portfolio transitions is a specialist service that requires a multi-disciplinary approach.
Gryphon Transition Management is a dedicated service providing the correct blend of experience and expertise to assist you with your transition. Gryphon and Dr Jaco Maritz have joined forces to launch a transition management business to serve the local pension fund and multimanager community. Dr Maritz is a pioneer of the local transition management industry, with experience of over 120 transition projects during the past eight years. He brings vast knowledge of the various types of transition arrangements, including manager change, asset class rebalancing, implementation of member choice portfolios and defined benefit to defined contribution conversions. He led the team which received the “Imbasa Yelogide” Transition Manager of the Year award from the Principal Officers Association three of the five times that it was awarded.
Our philosophy is to oversee the complete transition management value chain in order to give the best results to our clients (see figure below). Our offering is built on excellent administration capability, superb trade execution together with project management and risk management.
The services of a respected investment administration house to provide the administrative backbone of the transition service. They provide financial reporting, daily pricing, and will conduct all liaison with the custodian bank. In addition, the investment administrator will also play the role of trustee for the portfolio, in order to ensure compliance to the mandate.
We have access to local and global brokers that offer a range of excellent trading services and capabilities, such as client flow (dark liquidity), algorithmic trading, and specialised trading of illiquid securities.
All assets that a pension fund may invest in can be handled by our brokers, including derivatives, and global equities and bonds. In order to provide a seamless service, we offer the following deliverables during the transition process:
• A pre-transition report where the initial and target portfolios are compared, the trade list analysed for special risks and liquidity bottlenecks, trading costs estimated and a project plan presented.
• The smooth transfer of investments from the legacy fund managers to the transition portfolio is handled by our competent staff together with the investment administrator.
• A daily progress report, including market events that influenced the transition.
• Daily valuation of the transition portfolio is performed and reported to the client – thus there is no interruption of the vital fund valuation and pricing function.
• We ensure that daily tasks such as settlements and accruals are performed accurately and timeously.
• The final delivery of the completed portfolios is again handled by our competent staff – thus ensuring that the new fund managers can manage the portfolio as soon as they receive it
• Post-transition report where we report on the progress of the transition, the actual steps followed, the performance of the transition portfolio against benchmark, and the actual costs of the transition trades.
• Financial reporting pack at the end of the transition.
The pricing structure that we offer is completely transparent. As an independent transition provider we offer clients the best execution capability that matches their requirements. A combination of flow trading (dark liquidity), algorithmic trading and niche relationships allows us to tap into the correct trading capabilities to ensure that the client’s needs are served.
Please make contact with us for any further queries.
Tel: +27 21 915 5100