Investment management companies in Europe are continuing to beef up their consulting and client services department by poaching high-profile consultants. Michael O’Brien, head of the UK asset consulting team at Towers Perrin, is the latest to make the switch from consultant to asset management.
O’Brien joins Barclays Global Investors (BGI) as director of product strategy for the European Institutional business team in London. Simon Desrochers has also left Towers Perrin France to join BGI, where he will look after business development and client service.
Many of those switching are from the asset consulting side and most head to client servicing. “Part of client servicing is advising clients and these people are ideal,” says Olaf John, an ex-Towers Perrin man and now director of European institutional business at BGI. Andrew Drake, a Towers Perrin asset consultant has made the move and joined Gensec International Asset management as head of client management and services. John Luke, formerly a director at Prebon Financial Consulting, has joined Dresdner RCM as a director of the client relationship management team. Putnam Europe has filled its newly created position of consultants relation manager by appointing Nick Spencer, who has left Callan, Bacon & Woodrow.
Europe, with the exception of Switzerland and the Netherlands, is lukewarm towards asset consulting and in countries like Germany and Austria, it’s almost non-existent. “The companies who have invested in this area are probably disappointed,” says John. So too are the consultants. Many consultants have failed to reach ambitious targets and this had fed through to employees.
Companies and pension funds on the continent are also happy to ask their fund managers rather than independent consultants for advice and this is fuelling the moves. In Germany Sabine Mahnert, a senior international consultant at Mercer is leaving to join Morgan Stanley Dean Witter on October 1 and Horst Ludwig, another senior consultant, is leaving to join Dresdner on September 1, albeit for its newly created consultancy.
There’s also an element of remuneration. Consultants charge by the hour, asset managers on a percentage or on basis points. As an asset manager, if you attract enough assets, you get more money for doing almost the same. “It’s always attractive to do something else if you are paid more,” says John.
Not all those leaving consultancies are joining asset managers. Graham Middleton and Michael Smedley have, respectively, joined KPMG Pensions and William Mercer. Mats Langensjo who set up Mercer’s Scandinavian operation in the early 1990s last year joined Credit Agricole’s Indocam Asset Management, stayed a year and moved back last month to Wassum Investment Consulting as managing director. Wassum is one of the largest local consultants with 12 employees in Sweden, three in Norway and an office soon to open in Finland. Langensjo says it was the aggressive expansion and local flavour that attracted him. “In my view, consulting has to be done very locally,” he says. Annelie Enquist, his successor at Mercer in Stockholm, has also joined Wassum Investment Consulting.
There are reputedly two extremely senior German consultants leaving the industry, one for and index provider, the other for an asset manager. Both are serving out fixed notices while their employers try to talk them into staying.