EUROPE - European institutional investors have put an extra €75bn with external asset managers, according to consulting firm Greenwich Associates.

It said the share of externally managed assets have risen to 34% from 31% a year ago.

"Although that increase might seem negligible in percentage terms, it actually represents a shift of some €75 billion," said analyst Chris McNickle.

And asset managers were on a "hiring boom" to cope as portfolios diversified into new regions and strategies.

Greenwich said the typical Continental institution increased the number of asset managers it employs to nearly 11 in 2006 from less than 10 in 2005.

"Across the Continent, almost half of all institutions hired a new external manager over the past year," added analyst Tobias Miarka.
The firm's new ‘Continental European Investment Management Research Study' also found that the proportion of Continental institutions naming themselves as hedge fund investors increased from 26% in 2005 to 35% in 2006.

Another 10% said they have plans to begin investing in hedge funds in coming months.

"Our research suggests that a large proportion of Continental pension funds, banks, insurance companies, and other institutional investors are taking significant steps away from the somewhat tradition-bound investment practices that characterized the industry for the previous 50 years," said consultant Markus Ohlig.

They were increasing their exposure to alternative asset classes and non-European equities.

Greenwich said institutional assets in Continental Europe increased some 7% last year, driven by the strong performance of equity markets in 2005.