And what we’ve tended to find over history – and research seems to confirm it – is that if you don’t pay attention to that care and maintenance on a very frequent basis, you leave really big risk on the table, and in the long run you tend to leave a lot of money on the table as well, because you missed that high volatility. Michael Bailey: It’s interesting because quite a few funds, including some of

Australia’s largest, have been quite proudly saying ‘we’re hoarding cash’.

Marian Azer: They’ve probably had derivatives or ETFs sitting there in the background.Jim Karelas: There’s a big difference between hoarding funds and holding cash in your asset allocation. It’s the ability to separate their liquidity from their exposures that gives super funds another tool up their sleeve. Michael Bailey: Let’s talk briefly about the transition management market itself.

Troy, you made the observation that the investment banks are wanting to take risk off the table, and we’ve seen some publicised pull-backs globally from the transition management market.

Does that mean less choice in the transition management market at a time where, arguably, funds need it more? Troy Rieck: A period of consolidation has been overdue. What we were obviously telling clients preceding this was, an important part of transition management for any service provider is to have a panel, because there will come times where, for one reason or another, especially with investment banks, you’re going to have some of risk of them either not being there, or not being there in their full capacity.

The period of consolidation is now actually occurring. So I think from price perspectives, the clients have had their panels in place, so they’ve got different providers in place with different styles. So for those particular clients it’s not too much of an issue, but it certainly addresses the fact that they need to take stock of their particular transition management provider. The ones obviously that will survive are the ones that have actually increased their capabilities in that space and for one reason or other have consolidated with other firms.

It’s a good space to be in if you’re on that side of the fence. If the business is not an extension of a particular trading function, and it’s a business in its own right with potential conflicts being managed, and obviously as part of the consolidation that particular provider has survived, then it’s a very good space to be in. Less competition. Drew Vaughan: The reality was, certainly in the Australian market place, pretty much every retail broker had someone with ‘transition management’ written on their business card.

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