According to a study by a former Fidelity fund manager now at Uni of Boston, the opportunity cost for US pension funds of switching fund managers could be as high as $20bn pa.
Fired managers tend to outperform hired managers by 30bp after one year and 100bp after five years.
These foregone returns are not recouped. Moreover, this apparently excludes transition costs.
Perhaps this is unsurprising. Losing a mandate normally prompts internal actions to resolve the problems and improve performance. Moreover, as everyone allegedly know past performance is no guide to future success in investment performance.