The Traditional Active Manager That’s Raking in Assets

在圣路易斯,密苏里州,活跃manager NISA Investment Advisors has attracted $45 billion in net new assets over the last two years, growing by nearly one third.

This makes for a striking exception to the malaise of the overall traditional active management industry, which has bled client assets to passive and alternatives firms. For the fourth quarter of 2018 alone, Moody’s calculated $90 billionin outflowsfrom 13 major fund managers.

NISA specializes in liability-driven investing, a derivatives-heavy de-risking strategy favored by corporate pension plans. Founded in 1994, the employee-owned firm managed $199 billion in physical assets at the end of March 2019.

“2018 was an incredible year for NISA,” president David Eichhorn told亚博赞助欧冠in an interview. “It was the single highest asset growth in terms of net inflows.”

Eichhorn很快就会承认在NISA有利的一些因素。“我们是第一个说，LDI是我们住的空间，并有尾部采用或持续的失败，”他说。“强大的催化剂是税法变革，大多数计划可能会贡献并以旧的速度扣除扣除。”另一个强大的司机是更高的利率。这种改进的企业养老金资助状态，将它们从风险资产推动到较少的挥发性的资产 - 恰好尼沙的专业。

Some traditional managers’ outflows became NISA inflows. “It’s almost entirely plans de-risking and moving assets from various other asset managers, and new contributions coming from the corporate coffers,” Eichhorn said. “I think those new contributions are done. Plans were hitting triggers, selling equities, and buying corporates and treasuries.”

[IIDeep Dive:The Bloodletting Isn’t Over for Active Managers]

Another branch of the business has picked up, as well. Tail-risk hedging products experienced a jump in assets, and contributed more to NISA’s recent inflows than in years past.

“Historically, the ratio of talk to action in tail-risk hedging is enormous,” said Eichhorn, who is also the firm’s head of investment strategies. “Investors would come to us and say, ‘We want to cut the downside risk and give up little or no return.’ And we say, ‘That’s not possible.’ We love having the conversation, but usually we’re simply helping out a client. That’s changed in the last 18 months.” Now when institutions want to discuss tail-risk hedging, “it’s much more likely that there’s going to be a mandate at the end of it.”

NISA carried out a major planned succession recently, handing down equity from founders Jess Yawitz and Bill Marshall to the second-generation leadership, Eichhorn included. The firm remains entirely employee-owned, and completed the transition without outside debt or equity financing.

投资公司通常有一个poor track record with succession, particularly alternatives managers. Och-Ziff Capital Management Group and Bridgewater Associates have publicly stumbled in their handover attempts, for example. Eichhorn and his fellow leaders were aware of the challenge they’d set in announcing the plan in 2017.

“Sometimes things break down in executing succession plans, but for us, nothing did,” he said. “It would have had to take something very acrimonious for us to say, ‘To heck with it. Let’s sell.’ As Jess points out, he works for me now, which is a testament to the person Jess is and his desire to keep NISA employee-owned.”

The new leaders will face a more competitive environment that the last generation may have, as competition is heating up in LDI. The enormously successful U.K. provider Insight Investment is making a sustained push in the American market. Meanwhile, Montreal-based Fiera Capital in May agreed tobuy the LDI armof another firm, bringing its total assets managed under the strategy to $25 billion.