A recent study by a team at Montreal’s McGill University found that, during the period from 2004 through 2018, Canadian pension funds outperformed their international peers due to a “three-pronged business model that would have boosted the returns of US and other pensions had they used the same tactics.” This according to a recent article in Chief Investment Officer.

The study involved analyzing performance metrics, asset allocation strategies, and cost structures for 250 pension, endowment, and sovereign wealth funds in 11 countries. The team divided the sample into large and small funds (over or under $10 billion in 2018) and “quantitatively analyzed the distinct features of Canadian funds,” according to the article.

“The three-pillar business model consists of managing assets in-house to reduce costs, redeploying resources to investment teams for each asset class, and funneling capital toward growth assets that increase portfolio efficiency and hedge liability risks,” the article reports.

The research team also found that US pension funds would have seen improved returns had they applied the same three-pronged model during the same period.