23Institutional investors are increasingly taking control of their investments by managing them in-house. This has implications that extend beyond portfolio management and to manage assets in-house successfully, institutions need to build the supporting infrastructure. Traditionally, institutional investors have outsourced asset management to external managers. However, scrutiny on fees combined with a low yield environment has led many institutional investors to bring asset management in-house. In 2018, according to bfinance, almost 20% of institutional investors had increased the proportion of assets managed internally in the last three years and another 10% planned to in the following year. The insourcing trend is more prevalent among larger institutions, where 45% of institutions with assets above $25 billion manage a higher proportion of their assets in-house compared to three years ago. Furthermore, the world’s five largest sovereign wealth funds manage more than half of their assets internally, almost $2 trillion. Cost is usually the main driver for bringing asset management in-house and the savings can be significant. The California Public Employees’ Retirement System, the largest US pension fund, estimates that the transition to internal management and decreasing the number of outside consultants and advisors saved it $239 million in external management fees and operational expenses over the past seven years. Beyond cost savings, insourcing gives institutional investors more control of their investments, which can help better align them with their funds’ philosophies and beneficiaries’ beliefs. This is especially relevant to institutional investors who prioritize environmental, social, and governance-based investing principles because they can directly engage with companies in which they invest, through proxy voting, shareholder filings, and on-site due diligence.