The consultant William M Mercer has announced the publication of previously confidential track records of the investment managers it recommends to pension funds and institutional investors.
Mercers analyses its investment across 45 sub categories, in 39 of which its shortlisted fund managers managed to outperform the benchmark by an average 2.3% per year between 1996-2001.
In the other six categories, including some of the biggest sectors- both US large cap growth and value- recommended managers failed to meet the benchmark
Bill Muysken, Mercer’s global head of manager research says: “We thought it was only fair to present the results in full detail, warts and all…the details show we’re not perfect, but it’s gratifying to see we get it right more often than not.”
Mercers’ decision to publish this information quarterly is likely to pressurise its competitors to follow suit. In the UK the large consultants are considered excessively powerful by many in that there are so few who effectively act as gatekeepers to pension funds assets.
In addition, Paul Myners’ report on the UK institutional market published last year suggested many fund managers felt the level of reseach carried out by investment consultants was insufficient. Pension fund trustees are likely to add pressure on other consultants to publish their performance figures.
A spokesman for Watson Wyatt says the group intends to do much the same although not until next year when it completes a three year programme of performance measurement.