Bloomberg Radio: With Guest Sarah Samuels
NEPC’s Sarah Samuels was featured on the Bloomberg Intelligence Podcast for her outlook on private markets in 2025. Listen to the podcast on Bloomberg here.
Pensions & Investments: New Crop of Embedded Annuity Target-Date Funds Seen as a Way Station — Not a Final Stop, Experts Say
NEPC’s Bill Ryan was recently quoted in an article by Pensions & Investments which is focused on increasing returns to 401(k)s through embedded annuity options. View excerpts below or read the full article on the Pensions & Investments site here.
Target-date funds coming to market this year with embedded annuity options could mark a key step forward in the industry’s long slog to help 401(k) participants stretch their retirement savings into needed income for life.
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Bill Ryan, a partner and head of defined contribution solutions with Boston-based investment consultant NEPC, said he remains skeptical, predicting that no more than 10% of participants will likely be in the market to buy an annuity.
“There’s a higher probability, if they engage at retirement, they take all the money out, move it to their own personal wealth adviser, who then may facilitate something similar,” Ryan said. In the defined contribution construct, “we’re missing the human wealth manager that actually helps the individual trigger the annuity. There’s nobody holding the hand of the participants to successfully facilitate that transaction … and that human behavior is where I think this breaks down.”
Instead, Ryan predicted, passive target-date funds with elevated equity exposures could prove to be the “killer app” in the retirement space, allowing participants to build up bigger 401(k) retirement pools over a working life of 40 years or more which they can then rely on for a “paycheck” in retirement, without the need of a guaranteed income crutch.
Participants who have undersaved, meanwhile, could be worsening their situations by paying an insurer a premium to get a guaranteed income stream. “They actually could put themselves in a bigger deficit,” he said.
Click here to read the full article on the Pensions & Investments site.
Bloomberg: CEOs Brace for the Chaos of Another Four Years of Trump
NEPC’s Head of Asset Allocation, Phillip Nelson, speaks on the potential implications of tariffs on China in a new Trump era. View the article on Bloomberg’s site here.
Large corporations crave predictability, and the primary economic policy of Donald Trump is chaos. Whether it’s the threat of steep new tariffs or retribution, chief executive officers and their carefully drawn plans will once again be at the whims of a leader who’s emboldened to reorder the economy.
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There’s good reason to believe that many of Trump’s comments are bluster and that he’s more likely to target Chinese companies than American ones importing components from abroad. “He won’t want to be held responsible for the closure of a Midwestern factory when the operator can no longer afford to get the parts it needs, says Phillip Nelson, head of asset allocation at NEPC, an investment consultant that oversees $1.7 trillion of assets. Then again, Trump won’t have the prospect of reelection to think about this time.”
Pensions & Investments: Who Watches the Watchmen? Independent Evaluators Horning in On Consultants' Trusted Adviser Monopoly
NEPC’s Mike Manning & Steve Charlton have been featured in an article in Pensions & Investments for their insights on the OCIO industry and third-party evaluators. View excerpts below or read the full article on the Pensions & Investments site here.
For decades, investment consulting firms have maintained their perch as the prime gatekeepers of institutional portfolios, advising asset owners on manager selection, asset allocation and portfolio construction.
But with consultants, in their guise as outsourced CIOs, now almost universally bringing their own dogs to the money management fight, the question of who can gatekeep the gatekeepers is taking on growing relevance.
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The hope, said Michael P. Manning, managing partner of Boston-based investment consultant and OCIO firm NEPC, “is that they’re going to put us in front of organizations where there’s a good cultural or philosophical fit, as opposed to organizations … who just send out 20 RFPs,” without a deep understanding of how a firm such as NEPC works and its relative strengths.
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Steve Charlton, a partner and head of client solutions with NEPC, said with third-party evaluators now accounting for roughly a third of the OCIO searches NEPC responds to, the investment consultant — with $1.66 trillion in advisory assets as of June 30 and over $100 billion in OCIO mandates — is making “a concentrated effort” to engage with those firms, reflecting their rising profile as “the interface between the firm and the end client.”
Third-party evaluators ask a lot of challenging questions, Charlton noted, which in turn can result in a more robust process than searches that don’t involve those players. They are effectively helping clients do a better job fulfilling their fiduciary duty, he said.
Click here to read the full article on the Pensions & Investments site.
Pensions & Investments: Endowments with more U.S. stocks, hedge funds top returns for 2024 fiscal year
NEPC Partner and Practice Group Leader, Kristin Reynolds, has been featured in an article in Pensions & Investments for her commentary on exceptional endowment returns. View excerpts below or read the full article on the Pensions & Investments site here.
College and university endowments boasting higher allocations to domestic equities and hedge funds chalked up positive returns for the second fiscal year in a row, even stronger than the previous year.
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Hedge funds may have made the difference for some endowments when comparing fiscal year 2024 to fiscal year 2023, said Kristin Reynolds, partner and practice group director at NEPC.
“There’s a whole group in the middle that I think are interesting, that have diversified strategies that are thinking about the world in a more conventional manner,” said Reynolds. “They had a high year for fiscal year 2024 if they had public equity, but also diversifiers helped in 2024. When I say diversifiers, I mean what other people might call hedge funds or output-oriented strategies. With the volatility in the markets and China having a rally, strategies that were more globally oriented but also less tied to public markets did well.”
Reynolds said those endowments may have struggled more in fiscal year 2023.
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“Private equity has been the main driver of returns for the long-term period,” said NEPC’s Reynolds. “You can imagine that the questions are around (whether) private equity drive returns in the future, and so there are a lot of discussions about private equity valuations largely coupled with public equity valuations.”
Reynolds said that while in the last two years private equity returns have been lower, she still thinks there are strong returns ahead in the long term, especially in areas like middle-market buyout funds, the kinds of areas where operators are strongly involved.
Click here to read the full article on the Pensions & Investments site.
Bloomberg Markets: Money Undercover - NEPC Partner Sarah Samuels
NEPC Partner and Head of Investment Manager Research, Sarah Samuels, sat down with Lisa Abramowicz of Bloomberg Markets to share her expertise on key trends in institutional investing, as well as highlighting that CIO mindset which drives returns in today’s complex markets.
Pensions & Investments: Hightower Holding to Acquire Majority Stake in NEPC
NEPC has been featured in an article in Pensions & Investments regarding the majority stake acquisition by Hightower Holding. View excerpts below or read the full article on the Pensions & Investments site here.
Hightower Holding, a Chicago-based wealth management firm, has agreed to acquire a majority stake in Boston-based investment consulting firm NEPC.
Hightower and NEPC executives said the deal should close in early 2025. They declined to provide further details on the costs of the transaction, beyond noting that NEPC professionals would continue to retain significant stakes in NEPC, as well as Hightower.
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Together, Hightower — a leading industry consolidator of 140 U.S. financial advisory practices since its founding in 2008 — and NEPC, with $1.66 trillion in assets under advisement or management, would boast $258 billion in assets under management.
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Meanwhile, Michael Manning, managing partner of NEPC, will join the Hightower’s board of directors once the deal closes. Manning, in the same interview, said the deal would help accelerate the growth of an NEPC wealth management segment that, while only 3% of the firm’s OCIO business, had already become a “full fledged business line” from a revenue perspective over the past seven years or so.
The synergies of a Hightower-NEPC combination make the deal an exciting one for both firms, agreed Oros and Manning. This is truly a “one plus one equals five” situation, noted Oros.
Click here to read the full article on the Pensions & Investments site.
Hightower Announces Strategic Investment in NEPC
CHICAGO and BOSTON, October 21, 2024 – Hightower Holding today announced that it will acquire a majority interest in NEPC, LLC (“NEPC”), a leading investment consultant and outsourced chief investment officer (“OCIO”). Combining under a common parent company will allow each organization, NEPC and Hightower Advisors (“Hightower”), one of the country’s leading RIAs, to expand their commitments to clients to deliver institutional-quality investment solutions and research-driven advice.
As more private wealth investors express interest in allocations to private market investments, NEPC’s institutional research and investment capabilities will bolster Hightower’s existing set of wealth management solutions for its advisors and their clients. With this transaction, NEPC’s clients will continue to receive investment advisory and OCIO services while creating a new growth channel in partnership with Hightower. A combined Hightower and NEPC strategically positions both firms across their target markets and adds scale and resilience. The combination of Hightower, its affiliates, and NEPC represents over $1.8T in AUA and $258B in AUM.
Similar to previous Hightower Holding investments, NEPC is expected to retain its culture, executive team, and investment process, ensuring no disruption to its existing business operations and client service. Additional enhancements to both organizations’ offerings will create new opportunities for NEPC to serve the private wealth channel. As part of the transaction, NEPC Managing Partner Mike Manning will join the Hightower Board of Directors upon closing.
“This is a transformational combination that highlights the future of financial services and wealth management. Our relationship with NEPC stemmed from the exciting and distinctive opportunity that both businesses can offer the private wealth market when combined,” said Bob Oros, Chairman & CEO at Hightower Holding. “We create a stronger whole by maintaining our company identities and deploying our strengths together. In partnership with NEPC, Hightower advisor practices will have expanded access to investment management solutions, research capabilities, and a compelling set of investment opportunities. We are excited to embark on this journey alongside NEPC and support their future growth in their current markets and new ones.”
“Since NEPC’s founding, our top priority has been to provide clients with pioneering investment solutions and consulting,” said Michael Manning, Managing Partner at NEPC. “Today’s announcement is a continuation of this commitment. Hightower represents the ideal partner for us, as we leverage the strong growth of our current clients and continue our expansion into the private wealth market, all while preserving the strong culture and investment solutions that our clients trust and rely upon. We are confident that our firm is strategically positioned for the future alongside Hightower, enabling us to deliver conviction and quality counsel to assist our clients in achieving their optimal outcomes.”
In the transaction, NEPC was advised by Moelis & Company LLC and Goodwin Proctor, LLP provided legal counsel. Hightower Holding engaged Berkshire Global Advisors to provide industry research on the institutional investment consulting and OCIO industry and Kirkland & Ellis, LLP provided legal counsel.
About NEPC, LLC
NEPC is a global investment consultant, private wealth advisor, and OCIO provider serving over 400 retainer clients and more than $1.66 trillion in total assets. Combining a proprietary investment team dedicated to the long-term challenges facing investors with our client-centric model, Boston-based NEPC builds forward-looking investment portfolios for institutional investors and ultra-high-net-worth individuals and families. To learn more visit nepc.com.
About Hightower
Hightower is a wealth management firm that provides investment, financial and retirement planning services to individuals, foundations and family offices, as well as 401(k) consulting and cash management services to corporations. Hightower’s capital solutions, operational support services, size and scale empower its vibrant community of independent-minded wealth advisors to grow their businesses and help their clients achieve their vision of “well-th. rebalanced.” Based in Chicago with advisors across the U.S., the firm operates as a registered investment advisor (RIA). Learn more about Hightower’s collaborative business model at www.hightoweradvisors.com.
Securities offered through Hightower Securities, LLC member FINRA/SIPC. Hightower Advisors, LLC is a SEC registered investment advisor.
Media Contacts
Prosek Partners for NEPC
Alex Hinson
[email protected]
646-818-9072
Magnitude, Inc. for Hightower Advisors
Daniel Delson
[email protected]
917-328-9337
Financial Times: Endowments and Foundations Race to Outsource Investment Management
NEPC Partner and Head of Portfolio Strategy, Scott Perry, has been featured in Financial Times for his commentary on the increasing amount of endowments and foundations using OCIO services. View excerpts from the article below or read the full article on the Financial Times site here.
Small US endowments and foundations are racing to outsource their investment management in the hopes of getting access to profitable but illiquid alternative markets amid growing funding challenges.
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By the end of June, Boston-based NEPC, an institutional investment consultancy, had managed $14bn for endowments and foundations as an OCIO. That was up 48 per cent from three years ago. “It is a part of the market that continues to grow materially,” said Scott Perry, head of portfolio strategy at NEPC.
Click here to read the full article on the Financial Times site.
Pensions & Investments: Mentors helped Influential Women along the way. Honorees pay it forward.
NEPC’s Krissy Pelletier was recently featured in an article on Pensions & Investments as one of the “Influential Women in Institutional Investing“. View excerpts from her interview below or read the full article on the Pensions & Investments site here.
After studying economics at what is now Simmons University, Krissy Pelletier “was lucky to work with a great mentor (and) portfolio manager” on the public market side of Wellington Management. She still remembers the words said by Michael Carmen to set the tone going forward on her first day as an administrative assistant.
“He said, ‘Krissy, you didn’t go to Simmons to get this great degree simply to be an administrative assistant. So tell me, what brought you to Wellington? What made you interested? Let’s talk about what I do and how we can work together.’ He wanted to see me succeed. He was interested in what I wanted to be a part of,” Pelletier said.
She would leave Wellington in 2006 as a stock-focused research associate, but Carmen, who is still at the $1.25 trillion firm as co-head of private investments, still serves as a mentor to her. Pelletier still checks in him now as a partner and head of endowments and foundations at the $1.7 trillion consultant NEPC — and as a member of Pensions & Investments’ 2024 class Influential Women in Institutional Investing.
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When Pelletier joined NEPC in 2008, she worked for Cathy Konicki. Described by Pelletier as “a really great mentor,” Konicki “led the endowment and foundation team for a really long time” before retiring in 2022.
Konicki took Pelletier “under her wing, showed her the ropes” and challenged the new consultant “to do better and prepare in different ways.” But Pelletier noted her mentor was particularly receptive if one advocated for their interest or passion, as she did in Konicki’s office after a year or two.
Pelletier said she would say, “Cathy, here are the things that I’m less interested in, but let me tell you about things I’m really interested in. So if these opportunities come up, can you think of me? Can you put me in a position to participate? If this type of prospect walks in the door, can I be on the team? Can I help?”
In turn, Konicki would ask “why is that an interest?” and “why would you be successful working with that type of group?” Exchanges like that are what Pelletier said “helped me carve a path within endowments and foundations.” Having Konicki’s support for a career that “was always marrying my personal passion and professional interest” helped Pelletier understand that her path was “a good fit for me.”
Click here to read the full article on the Pensions & Investments site.