4 December 2020
HONG KONG, HONG KONG
Mercer, a global leader in redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being, today announced its global assets under management reached $321.4 billion USD as of September 30, 20201.
“We are seeing a direct correlation between the challenges of the pandemic and investors’ interest in our investment solutions. The pandemic brought on a liquidity crisis and extreme market volatility. Although equity markets have since recovered to reach new highs, long-term real and nominal interest rates remain near all-time historical lows, challenging investors’ ability to meet their long-term goals,” said Rich Nuzum, CFA, President, Investments & Retirement at Mercer.
“We believe better performance has been achieved by institutional investors whose governance has handled rebalancing trades, de-risking and re-risking trades, despite the extreme market volatility earlier this year, and by investors who had capacity to consider opportunities such as high yield and private debt at the depths of the market downturn. Many asset owners are recognizing their governance didn’t succeed across all these fronts, and are looking to access outsourced chief investment officer (OCIO) investment solutions for assistance before they are tested in this way again,” Mr Nuzum added.
In March 2020, Pensions & Investments2 ranked Mercer first by worldwide, outsourced assets under management. In a separate survey by CIO magazine, Mercer was also rated first for global assets under management, as of March 20203. Pensions & Investments also named Mercer first by global assets under advisement as of June 30, 20204.
“Portfolios today require higher levels of diversification, requiring more asset classes, more investment managers, and overall, more operational management to contend with. This increased complexity, coupled with challenging market conditions and fee pressures, also means investors are looking for a more dynamic approach to managing portfolios. All of these requirements are driving interest in investment solutions across our client base and the broader market,” said Mick Dempsey, Global Head, Investment solutions/OCIO services at Mercer.
“As governance has been tested this year, we have been seeing investors across the institutional marketplace such as pension schemes, insurance companies and other financial intermediaries, as well as not-for-profit entities, adopt investment solutions to support the operational management of their investment portfolios,” added Mr. Dempsey.
This growing demand for OCIO investment solutions has been particularly evident in Asia, said Janet Li, Wealth Business Leader, Asia at Mercer.
“We are now experiencing market volatility on par with the 2008 global financial crisis. Slow growth and thin margins are the result of widespread economic uncertainty following the COVID-19 outbreak, and current headwinds are only expected to continue, if not grow stronger. As Asian institutional investors examine their funds’ performance and practices including governance in light of the prolonged uncertain market environment, many have been newly drawn to consider the OCIO route,” said Ms Li.
“OCIO can be compelling to shops that seek diversity in portfolios and highly rated managers but face challenges with in-house resources or capabilities. In-house teams are even more stretched with the COVID-19 situation where budgets have been cut and costs are on the chopping block. The pressure for better risk-adjusted returns and the cost savings a delegated investment framework may generate are key drivers of demand for OCIO investment solutions.”
To view a short video of Mick Dempsey’s assessment of the OCIO market and navigating the COVID-19 crisis, please click here.
To view a short video of Rich Nuzum speaking about the importance of governance, please click here.
Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with 83,000 colleagues and annual revenue of over $20 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit mercer.com. Follow Mercer on LinkedIn and Twitter.
References to Mercer shall be construed to include Mercer LLC and/or its associated companies.
© 2020 Mercer LLC. All rights reserved.
This contains confidential and proprietary information of Mercer and is intended for the exclusive use of the parties to whom it was provided by Mercer. Its content may not be modified, sold or otherwise provided, in whole or in part, to any other person or en.tity without Mercer's prior written permission.
Mercer does not provide tax or legal advice. You should contact your tax advisor, accountant and/or attorney before making any decisions with tax or legal implications.
This does not constitute an offer to purchase or sell any securities.
The findings, ratings and/or opinions expressed herein are the intellectual property of Mercer and are subject to change without notice. They are not intended to convey any guarantees as to the future performance of the investment products, asset classes or capital markets discussed.
For Mercer’s conflict of interest disclosures, contact your Mercer representative or see http://www.mercer.com/conflictsofinterest.
This does not contain investment advice relating to your particular circumstances. No investment decision should be made based on this information without first obtaining appropriate professional advice and considering your circumstances. Mercer provides recommendations based on the particular client's circumstances, investment objectives and needs. As such, investment results will vary and actual results may differ materially.
The assets under management data (the AUM Data) reported here include aggregated assets for which Mercer Investments LLC (Mercer Investments) and their global affiliates provide discretionary investment management services as of the dates indicated. The AUM Data reported here may differ from regulatory assets under management reported in the Form ADV for Mercer Investments. For regulatory assets under management, please see the Form ADV for Mercer Investments which is available upon request by contacting Compliance Department, Mercer Investments, 99 High Street, Boston, MA 02110.
Information contained herein may have been obtained from a range of third party sources. While the information is believed to be reliable, Mercer has not sought to verify it independently. As such, Mercer makes no representations or warranties as to the accuracy of the information presented and takes no responsibility or liability (including for indirect, consequential, or incidental damages) for any error, omission or inaccuracy in the data supplied by any third party.
Not all services mentioned are available in all jurisdictions. Please contact your Mercer representative for more information.
Investment management and advisory services for U.S. clients are provided by Mercer Investments LLC (Mercer Investments). Mercer Investments LLC is registered to do business as “Mercer Investment Advisers LLC” in the following states: Arizona, California, Florida, Illinois, Kentucky, New Jersey, North Carolina, Oklahoma, Pennsylvania, Texas, and West Virginia; as “Mercer Investments LLC (Delaware)” in Georgia; as “Mercer Investments LLC of Delaware” in Louisiana; and “Mercer Investments LLC, a limited liability company of Delaware” in Oregon. Mercer Investments LLC is a federally registered investment adviser under the Investment Advisers Act of 1940, as amended. Registration as an investment adviser does not imply a certain level of skill or training. The oral and written communications of an adviser provide you with information about which you determine to hire or retain an adviser. Mercer Investments’ Form ADV Part 2A & 2B can be obtained by written request directed to: Compliance Department, Mercer Investments, 99 High Street, Boston, MA 02110.
Certain regulated services in Europe are provided by Mercer Global Investments Europe Limited and Mercer Limited.
Mercer Global Investments Europe Limited and Mercer Limited are regulated by the Central Bank of Ireland under the European Union (Markets in Financial Instruments) Regulation 2017, as an investment firm. Registered officer: Charlotte House, Charlemont Street, Dublin 2, Ireland. Registered in Ireland No. 416688. Directors: Sylvia Cronin, Michael Dempsey, Tom Geraghty, Abhishek Krishan, Deborah Mintern, Bruce Rigby (British) and Vincent Sheridan. Mercer Limited is authorized and regulated by the Financial Conduct Authority. Registered in England and Wales No. 984275. Registered Office: 1 Tower Place West, Tower Place, London EC3R 5BU.
Investment management services for Canadian investors are provided by Mercer Global Investments Canada Limited. Investment consulting services for Canadian investors are provided by Mercer (Canada) Limited.
1 In providing OCIO investment solutions, Mercer typically exercises investment discretion by hiring and overseeing third party asset managers on behalf of client portfolios. Global OCIO assets data is primarily but not exclusively discretionary mandates.
2 https://researchcenter.pionline.com/v3/rankings/outsourcing-manager/datatable. Pensions & Investments OCIO survey, worldwide discretionary assets under management as of March 30, 2020 as reported by each firm to P&I.
3 https://www.ai-cio.com/surveys/2020-outsourced-chief-investment-officer-survey/ ai-cio survey, worldwide discretionary assets under management as of March 30, 2020 as reported by each firm to ai-cio.
4 https://researchcenter.pionline.com/v3/rankings/consultant/datatable Pension & Investments, AUA ranked by worldwide assets under advisement as of June 30, 2020 as reported by each firm to P&I.
Pension & Investments and CIO magazine rankings are based on survey responses from responding firms. Mercer did not pay a fee to participate in these surveys. These surveys are not indicative of the investment adviser’s future performance. Please see Important Notices for important information about Assets under Advisement and Assets under Management.
5 Expected returns are hypothetical average returns of economic asset classes derived using Mercer’s Capital Markets Assumptions. There can be no assurance that these returns can be achieved. Actual returns are likely to vary. Please see Important Notices for further information on Return Expectations.