Why Do Institutional Plan Sponsors Hire and Fire Their Investment Managers? Jeffrey Heisler, Gottex Fund Management

______________________________________________________________________________ This study draws inferences about investment decisions by plan sponsors who oversee over $6 trillion in institutional investment assets by examining asset and account flows for activelymanaged U.S. equity products. Analysis reveals an expected role for benchmarks – primarily the S&P500 – and a curious role for total returns over short and long-term horizons in asset flow allocations. Sponsors punish for one-year losses, and screen on consistency, but not magnitude, of positive or negative active return over time. Style benchmarks are more prominent in decisions to move accounts, which are found to involve more criteria, possibly reflecting a higher hurdle decision requirement. ______________________________________________________________________________