Specialist mandate boom in UK but not Europe

UK/EUROPE – UK pension funds have increased the number of specialist investment mandates they use by a significant 31% over the last two years, although figures in Continental Europe have yet to follow suit with only a three per cent rise over the same period, according to the 2001/02 European Pension Fund Managers’ Guide by consultant William M. Mercer.

Mercer says the growth in UK specialist briefs fits with a move to specialist management that has been occurring for some time, but points out that while the European shift may be slower it belies a major reorganisation in asset allocation.

Mercer estimates in its research that the European pensions market has now reached a value of $3.9trn (e4.4trn), but points out that a good portion of this is not available to be managed by third party providers due to the prevalence of book reserve systems in Germany, in- house arrangements in countries such as the Netherlands and Switzerland and insurance contracts in other countries.

The Mercer study also reveals that investment managers are increasing their number of full service offices around the world, with the average rising from 2.8 in 1999 to 3.3 in 2000, a trend the consultant attributes to the current emphasis on greater research.

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