Boundaries are still blurred in Denmark over the relationship between institutional pension funds/foundations and investment managers, which still carry out the majority of investment consulting for clients.
However, increasing externalisation of Danish institutional portfolios and a greater focus on investment analysis has boosted work for local advisory firms and pushed the door ajar for international consultants.
Daniel Broby, chief portfolio manager at Copenhagen based Unibank Investment Management, comments: "Danish fund management houses still perform most asset liability work on behalf of clients, preempting any possible future consultant market.
"Some of the multinational firms though are looking to Anglo-Saxon consultants for advice on overseas investment , and US andUK consultants have been involved in manager searches here. All the major players have a profile in the market."
Broby says the focus of the smaller Danish consultants is on investment studies rather than manager recommendations.
Hasse Nilsson of Alcifor says the large part of the firm’s business today is on asset liability and allocation studies and the consequent implementation of these programmes, including manager searches, and monitoring.
"There is a growing demand for more precise attribution analysis on investment to really find out where managers are adding value," Nilsson adds.
And he notes the swift maturity the market has undergone. "Over the past five years we have gone from almost nil diversification of institutional assets to a stage, which although not saturated has come a long way in diversifying portfolios.
"Equity and foreign investment has increased substantially over the period and clients are now looking at private equity and real estate options." Nilsson also believes it will not be long before institutions start to examine the nature of their asset manager relationship.
"By nature there is a conflict of interest, because managers can do this ALM work for clients, but they can never isolate themselves from the fact they are trying to sell the underlying products."
And while the large international accounting and auditing firms are also trying to establish a presence in the Danish investment consultancy market, the consensus is that they may not have the experience to trouble the existing players.
Notably though Belgian consultant Pragma has also recently made in-roads into Denmark, with suggestions that the Anglo-Saxon route may not always be the preferred consultancy path for Danish institutions. Hugh Wheelan