French institutional investors are now more likely to select their fund managers with the help of external consultants – slowly mirroring the British institutional market, according to research by bfinance.
A survey of 32 managers reveals the volume of the market for tenders stood €14.6bn in 2005. The figure was €22.7bn in 2004 following the Fonds de Réserve pour les Retraites’ calls for tender, but without this isolated incident, the market would only have totalled €7bn.
According to the consulting firm, this means the market has doubled year-to-year. A spokesperson for bfinance states that the need for diversification is a big motivator for using consultants.
New players in the French market, such as the FRR, and older players are building up reserves that need to be invested. Furthermore, institutional investors are no longer just investing in bonds, but also in new and diverse assets in France and across the world.
“They have to use consultants specialising in this,” says
The survey reveals that Mercer is the most active consultant on the French market with 34% of the volume. Fixage has 27%, with bfinance having 21%.
However, the ranking differs in terms of the number of calls for tenders: bfinance leads with 20 RFPs (27% of the market), Mercer with 14 and 19%, and Amadeis and Hewitt each have 10 requests and 14% of the market.
According to bfinance, in terms of numbers roughly half of the investors use consultants to select fund managers.