GERMANY - Faros Consulting, the Frankfurt investment consultant launched three years ago, says it has surpassed the €40bn mark in terms of the volume of institutional assets under advice (Deletes incorrect mandate reference).
Breaking down its client structure, Faros said pension funds made up half of its 26 institutional clients. They include the €2.7bn pension scheme for German chemical company Degussa and the VBL, a €12bn scheme that insures German public sector employees.
Faros also advises four banks, three foundations, three ecumenical organisations, two insurers and one company.
"Our current business development confirms our predictions in 2003 about the potential for investment consulting among (German) institutional clients," Faros said.
It added: "According to current estimates, these clients use consultants 25% of the time. But the complexity of investments, particularly alternatives like hedge funds, commodities and real estate, as well as a growing need for risk management should lead to greater demand for consulting."
Faros was founded in the fall of 2003 by Rainer Buth and Uwe Rieken, two consultants who formerly worked at FERI, the market leader in Germany with €305bn in assets advised on.
Since beginning the consultancy, two other ex-FERI consultants - Frank Umlauf and Gernot Specht - have joined Faros as partners. Faros' fifth partner is Eberhard von Alten.
Beyond Faros and FERI, Germany's consulting market includes domestic players like Alpha Portfolio Advisors and RMC as well as foreign houses like Mercer, Watson Wyatt and Towers Perrin.
FERI's arch rival is currently Alpha, which between January 2005 and September 2006 won 45 mandates for asset manager searches, representing an underlying allocation volume of €3bn. This is one of the highest figures known in a market that is still largely opaque.
Of the foreign houses, Mercer is farthest along, having racked up €25bn worth of mandates, including asset manager searches and A-L studies.