Institutional allocators are working more hours but wasting time

Survey finds large share of time is spent working on non-core tasks that do not add value

Institutional allocators are working more hours but wasting time
Steve Randall

Allocators at public pensions, endowments and foundations, and family offices, are working harder than ever, but are not necessarily as productive.

A new survey of institutional allocators shows that the average working week has increase to 50 hours, from 44 in 2020, but productivity is being weakened by time spent on non-core, non-value-adding tasks.

The study from Backstop and Mercer shows that allocators report spending 13% of their time each week on these tasks, which is down from 18% two years ago, but still means they are spending almost a day each week (6.5 hours) on "waste of time" tasks.

However, there is disagreement on how important these tasks are with seniority affecting how they are viewed.

Allocators are also spending a lot of time on manual tasks and battling a lack of integration between internal and external systems.

The survey also reveals that allocators do not use external investment manager research providers, leading them to spend almost 50% of their manager meetings reviewing facts about the manager or going through a series of templated questions, versus gleaning market insight and commentary.

Talent challenges

Meanwhile, attracting talent is the biggest challenge for 40% of allocators, the largest single challenge cited, with concerns about preserving institutional knowledge so it does not walk out the door with their staff.

“Our hope is that allocator investment teams will sit down with the study to discuss whether the results resonate for them,” said Maryling Yu, Chief Marketing Officer of Backstop Solutions. “What are they actually spending time doing, and what do they think they should be spending time doing? Once they identify what they want to be working on, and what the highest purpose of their time is, they can get to work clearing space for what’s important. Integrating and automating the flow of information can free allocators to do more critical thinking and decision-making.”