This article was penned by CAPIS

Last week CAPIS held its latest virtual panel, featuring panelists Tom Schoenbeck (Aon Investments), Phil Jandora (Willis Towers Watson), and CAPIS’ own Bryan Gibbs and Ben Jenkins. The discussion focused on the value and purpose of Transition Management reporting at the post-trade and pre-trade levels.

Click here for a video of the virtual panel

The presentation addressed the following topics:

• Post Trade (4:50 – 17:10)
• Strategy and implementation are important, but equally is the transparency of reporting. (5:14)
• When looking at a Transition event start at the 30,000 foot level and drill down as needed (6:05)
• Highlight trade execution and quality (ex: avoid “lazy trading”) (7:10)
• From a consultant’s perspective, post-trades are used to validate costs and the TM provider’s execution and strategy (8:27)
• Tendency to focus on total execution (e.g., close to mean cost estimate), but consultants’ job is to really understand what drove performance (“good” or “bad”). (8:50)
• Time spent on a post-trade is important – validate performance and align or confirm expectations amongst all parties (client, consultant, TM provider). (10:50)

• Pre Trade (18:10 – 26:10)
• Sometimes seeing multiple strategies can be overwhelming. Usually the best (maybe, two) strategies make sense. (18:20)
• There is a “less is more” reality for the pre-trade and proposal stage. (18:50)
• Hedging – good example of where multiple strategies makes sense (with and without). (20:05)
• The level of data matters for the TM solution. If there is not much guidance, the TM may provide more ideas to cover a spectrum of outcomes and scenarios. (20:35)
• If the client can, providing more information about the event (timing, scope, etc.) will make a difference at the pre-trade/ bid level. (21:15)
• Benchmarking is crucial – it helps align goals and strategy and encompasses details of the trade. The benchmark drives pre-trade estimate. (24:30)
• Don’t focus too much on the “sticky” issues such as high ADV and ignore something like Google News which could hurt the trade. (31:45)

• TM Provider Selection (33:00 – 35:05)
• Don’t search for a TM when you need one – you’re actually creating opportunity cost. Pre-select or, at least, pre-identify vendors you trust. (33:17)
• Firms like WillisTowersWatson can assist in TM manager research, including people, process and systems, to select a preferred list. (34:50)
• Steer clients to a few firms that best match their needs

• Q&A (35:20)
• How does a consultant decide what to provide clients? (35:35)
• How much information should you give a TM provider?  (37:25)
• Is there a trend to focus more on post trade than pre trade? (40:28)

For questions or to learn more about Transition Management, please reach out to [email protected] and follow us on Twitter (@capisinc) and LinkedIn for more updates and insight from our team.