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NAPA Net Updates DCIO List

The mid-year update of NAPA Net’s list of DCIOs is complete, and we’ve updated both the list and the accompanying commentary.

While changes for DCIOs may be less dramatic than for record keepers, they are likely to occur more often. Unlike record keepers, DCIOs rarely exit the market or merge, since most are integrated into a much larger organization. But market dynamics still significantly affect how they conduct business.

In particular, with more DC assets flowing into index and packaged investments like TDFs, there will be fewer opportunities for long only, active equity managers. Will custom or open architecture target date or risk based investments gain traction, affording more opportunities? Will more assets move into alternative investments, making room for hedge funds and private equity funds? Will advisors, seeking to capture more of the revenue, look to create more custom funds? All we know for sure right now is that whatever option is defined as the plan qualified default investment alternative (QDIA) will garner the majority of assets going forward.

So here what’s happened since our last DCIO update at the end of 2014:
BMO is selling their record keeping division to One America. What does that mean for their DCIO? For some firms (like MFS), their DCIO business flourished after they sold their record keeper but for others like Hartford, there was little, if any, difference.
Cohen & Steers seemed to be getting aggressive with the hiring of Matt Gannon to head up their DCIO group, but Gannon has left, with no replacement announced.
• The leader of Eagle Asset Management’s DCIO recently departed — they are owned by Raymond James.
F Squared got hit by SEC issues and the loss of their founder and DCIO-specific professionals.
• Will the sale of JP Morgan’s record keeper affect their DCIO?
MassMutual is making a push in the DCIO market via their Babson subsidiary as well as in-house investments.
• Will Putnam benefit from their affiliation with Empower-Retirement, perhaps replacing the coveted position that JP Morgan had with in-house record kept plans?
RS Investments, partly owned by Guardian, is getting aggressive, with new value adds and experienced professionals.
Thornburg lost their longtime DCIO leader.
• What changes will TIAA-CREF make now that it owns Nuveen?

Our newly updated list of DCIO providers in now online here; look for the mid-year update of our list of broker dealers this Wednesday. And please let us know if anyone is missing.

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