Investing Blind: The Sorry State of Portfolio Data

(March 12, 2013) — More than half of all European pension fund managers do not have adequate access to portfolio data to enable them to jump on investment opportunities as they arise, a study has revealed.

Just 44% of respondents to a survey by State Street said they felt the data they had available helped them to identify investment opportunities and act upon them.

Almost two thirds – 61% – admitted that they did not fully understand their risk exposure by using the data they had available. Perhaps more worryingly, only 60% of respondents felt the data they received on their investment portfolio was accurate.

Ian Hamilton, head of asset owner sales for State Street Global Services, said: “At a country level, local regulators increasingly require more frequent and more detailed reporting. In addition, the prospect of overarching regulatory initiatives affecting pension funds at a European level, such as the potential for Solvency II-style reporting of asset data, could create a significant additional burden.”

State Street’s research revealed that nearly 73% of European pension funds cited demands from internal governance and risk management functions as a challenge – with 87% believing the pressure from these demands would escalate over the next five years.

Hamilton at State Street said external support and solutions would play a growing role. The company’s survey interviewed 150 pensions across the Netherlands, Germany, Switzerland, the UK, and Nordics.

In January, aiCIO talked with the Alberta Investment Management Corporation about its cutting edge system that allows real-time access to accurate date.

Read our report:Big Dreams? Big Data