A global network of professionals, a wealth of expertise, and a painstaking attention to detail have enabled Mercer Investment Consulting to carry off the laurels as the Best Real Estate Consultant, sponsored by Pramerica.
Part of the Marsh & McLennan group of companies, Mercer offers customised guidance at every stage of the investment decision, and the risk management and investment monitoring processes.
Mercer works with the fiduciaries of pension funds, foundations and other investors in some 35 countries. The vast majority of clients receive the full range of investment consulting services, such as asset allocation analysis, as well as investment manager research and selection.
In the real estate sector, Mercer can call on a combination of full- and part-time researchers across the world, constantly gathering, refining and sharing research. These dedicated research teams monitor and evaluate investment managers, creating a breadth and depth of globally-based information which distinguishes Mercer from its competitors.
In carrying out this research, the company mixes the efforts of full-time researchers, who have often managed money themselves, and field consultants, who have seen numerous investment managers operate in practice.
One key advantage in providing this information is Mercer's global investment manager database, GIMD.
GIMD is a web-based Oracle application that is accessible to all of its consultants throughout the world. The database provides a central repository for all types of manager information: details about their staffing levels and specialities in different locations, information on investment products and performance, and Mercer's own research such as its meeting notes, news items, and manager ratings.
The database currently contains details on more than 2,600 active managers, running over 14,000 different investment strategies, including real estate.
All the managers which Mercer follows maintain their own data on GIMD, and this is supplemented by Mercer's own research. The company's consultants and analysts all over the world are able to access the single database, which means avoiding the potential for confusion, as well as fragmented research notes and views.
The database is available to clients, if they wish to subscribe. This ensures that the research notes are focused, and relevant to each client.
As a key area of its investment consultancy services, Mercer's real estate research is also carried out on a global basis, giving it a further advantage over its competitors. In fact, the company believes it is unique among consultants in the breadth and depth of its real estate research.
Although researchers around the world share factual information and views using GIMD, they also speak to each other regularly, exchanging views on research and on client projects.
The company says this is now essential in the global marketplace, as clients are gradually moving from domestic real estate investment to creating portfolios on a global basis.
In fact, Mercer has been actively encouragingsome clients to invest outside their domestic market. It says it is not afraid to "push the envelope" in its research in order to maximise return potential for its clients. In helping clients achieve this diversification, Mercer's international network comes into play. For example, clients in one part of the world (such as Australia) may need to buy real estate in another (such as the US or Europe). In this case, Mercer's research teams on both sides of the Atlantic would be involved in advising the Australian client.
In 2005, Mercer carried out more than 35 real estate searches globally for its clients. It has seven real estate researchers in Europe, and more dedicated researchers in the US and Australia.
The company's attention to detail in real estate research is another factor which keeps it ahead of the game. It maintains ratings for a wide variety of real estate approaches.
In the UK, it rates managers for directly-held, pooled, multi-manager and "high lease to value" strategies. At a global level, it maintains ratings for listed securities managers, REITS and other forms of property ownership. Keeping this information on such a detailed basis means that Mercer can tease out the relative strengths (and weaknesses) relating to a particular manager, since managers can have different ratings for different areas, depending on their capabilities, people and commitment to the specific areas in question.
However, Mercer also believes in a partnership approach, and has worked with managers to develop tailored strategies for clients. One example is the "high lease to value" approach, which targets specific properties as a proxy for bond investment. Two products in this area are now available to clients, with more in the pipeline.
Mercer says that working with providers in this way, as well as contributing to fund manager conferences, underlines the trust which the industry places in their capabilities.