Mercer sets new advice record
Consultant William M Mercer’s Investment Consulting Practice advised on a record 800 investment manager searches last year worth $61.5bn (e68.6bn) – a jump in assets of 18% from 1999’s $52.1bn of investment advisory work.
And Mercer says it believes the figure represents the highest volume of manager searches ever advised on by an investment consultancy in any one year.
The figure of 800 searches shows an increase of 4% on the 769 carried out in 1999.
In terms of the split of assets placed by location of client, 54% was in Europe, 34% in the Americas and 12% in Asia/Pacific, with Europe experiencing the strongest growth rate in search activity for 2000.
Mercer’s global head of manager research, Bill Muysken, comments: “The key driver of this trend is the accelerating rate of migration from balanced management to specialist management structures across Europe, and particularly in the UK. It looks like the days of conventional balanced management are numbered.”
He adds: “The benefit for our clients is that this scale of activity enables us to fund substantial investment in manager research.”
Within the main countries where Mercer operates, domestic equity was the most popular product category.
Mercer also notes that every client implementing specialist management used at least one domestic equity manager, with many using two or three.
International equity tended to be the second most commonly selected product category and was consequently the most popular single product category across Mercer’s overall client base worldwide – accounting for about 15% of the total.
The Northern Ireland National Assembly has selected Royal London Asset Management (RLAM) to manage its entire £3m (e4.7m) pension portfolio through RLAM’s pooled pension (balanced) fund.
“Royal London Asset Management offered a compelling investment track record and intelligent outlook. The managers have a structured and disciplined approach to stock selection, which has clearly delivered results in the past,” says Denis Watson, chairman of the trustees at the Northern Ireland National Assembly.
The win comes on the back of RLAM’s recent selection by advertising group J Walter Thompson to manage the entire £20m UK equity content of its pension fund – a brief it won from Schroders.
Frank Russell has appointed Boston-based MFS Institutional Advisors and New Jersey firm Systematic to manage large cap value briefs worth $1.25bn (e1.4bn) and $200m respectively within its multi-manager portfolio range. The managers replace incumbent Equinox Capital Management.
MFS will manage assets for Russell’s multi-manager portfolios based in the US, Ireland, Canada and the Cayman Islands and aimed principally at investors in the UK, South Africa and Singapore.
The MFS Fund will be benchmarked against the Russell1000 index, although the manager has a remit to invest up to 2.5% of assets in the Russell3000 index, where Russell says MFS has particular expertise.
Damien Barry, a portfolio manager at Russell in London, says MFS has a broad cap investment approach suitable to the Russell1000 index, adding: “ We have very high opinion of the processes and the people in this particular product.”
Systematic, which already manages a portion of Russell’s small cap portfolios, will run a $200m US large cap equity brief for Russell’s MFMM product, which is broadly aimed at Continental European clients.
The fund will be benchmarked against the S&P500 index.
“As value managers go they are one of the more interesting players and don’t look purely at companies which may look cheap but also at earnings sustainability,” says Barry.
He adds: “ Both companies are likely to do well with companies that are statistically cheap but with strong or sustainable earnings positions.”
UK supermarket chain Somerfield’s £300m (e96m) pension scheme has appointed Baring Asset Management as manager to a £60m UK fixed income portfolio.
The brief will be benchmarked against a composite of conventional and index-linked gilts. Baring’s objective is to outperform the benchmark by 0.75% per annum, with a discretion within its guidelines to invest in overseas and corporate bonds.
The Somerfield Pension Scheme was advised by consultants Bacon & Woodrow.