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Impact Investing

IPE special report May 2018

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Interest rates driving increase in use of consultants – Mercer Germany

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  • Interest rates driving increase in use of consultants – Mercer Germany

EUROPE – Institutional investors in Austria, Germany and Switzerland are seeking more help from consultants due to the problems caused by persistently low interest rates, according to Mercer's new managing director for the region.

Achim Lüder, who started in his new role in July, recently succeeded Fridtjof Helemann.

Speaking with IPE, Lüder corroborated recent findings by ratings agency Telos that German institutional investors are turning increasingly to consultancies for advice.

In Telos's latest Spezialfonds study, the agency notes a "clear trend" in institutional investors recruiting external help for decisions on asset management and the administration of Master KAGs.

In its 2013 survey, the share of investors using a consultant almost doubled from 25% in previous years to 47%.

Lüder said: "This is mainly down to the market environment in which investors need new ideas."

He said recent changes in the regulatory landscape had also played a part, but reiterated that the low interest-rate environment was the chief reason investors were now looking to consultants for more innovative solutions.

"This is a new situation that is politically driven and for which it is difficult to draw conclusions from past experience for a prognosis," he said.

Lüder has also found that more and more institutions are looking for "all-in" solutions, where consultants also take on part of a pension fund's administration.

He said the challenges facing institutions in Switzerland and Austria were very similar, notwithstanding differences in their regulatory regimes.

Meanwhile, Mercer has renamed its Outsourcing business in the region as Pensions Administration – because "that is what we do", Lüder said.

In that area, Catherine Schoendorff has been promoted to head of Pension Administration Switzerland.

She will continue in her role as head of Pension Administration for Germany as well.

In Switzerland, she replaces Beat Schmid, who has left the company.

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