The utilization by an organization of external money management firms for that organization’s investment portfolios. External money managers are often utilized by public and private defined benefit plans, defined contribution plans, mutual funds, not-for-profit funds, bank trust groups, variable insurance products and endowments and foundations. These assets comprise $3.5 TR in the United States, with another $650 BB in assets abroad.
Source: FRC, P&I, Cerulli and Industry Research
Note: Organizations such as public and private defined benefit plans, endowments and foundations refer to the process of using external money managers as “externally managed” while other organizations, such as mutual funds and variable insurance products, use the term “sub-advised.”