Innovation works for multi-talented Mercer

The confidence to live life on the wild side has reaped huge benefits for Mercer over the past year, helping it to take out the Multi-Manager category for 2008.

Lonsec cited Mercer’s innovation and willingness to back new investment strategies early as key to its success.

“Mercer’s increased allocations to alternative assets, which generally display low correlations to traditional equity market returns, have proven to be particularly beneficial in currently volatile equity markets.”

Mercer Global Investments Australia and New Zealand head Gary Burke said volatile markets present an excellent opportunity for multi-managers to prove their worth.

“In periods of volatility, advisers tend to turn to multi-managers more often than they would ordinarily.”

In judging the award, Lonsec said Mercer has a real competitive advantage in that it is able to draw upon its extensive global research capabilities, with an annual budget of more than $40 million, to create funds exclusively for Australian clients.

Burke explained: “Our investment process leverages off Mercer’s comprehensive global research capabilities, which cover the broad universe of investment strategies offered by the world’s best specialist fund managers ... Our Australian-based investment team then uses this information to construct portfolios tailored to meet the needs of Australian investors.”

NAB’s wealth management division, MLC, and Russell Investment Group were the finalists in the Multi-Manager category.

Both were commended by Lonsec for their expertise in doing what multi-managers need to do best — harness the specialised talents of others to achieve their — and their clients’ — objectives.

Michael Clancy, general manager of MLC’s investment management division, said the company’s scale, experience, focus on Australian investors and culture of innovation give it an edge over the competition.

“As an Australian-based multi-manager, we are focused on Australian investors and are not forced to rely on research that has been done with foreign investors in mind.

“We don’t follow fashions or fads, but seek sensible inclusions for our investors’ portfolios and ensure diversification.”

Co-finalist Russell is the world’s largest multi-manager, employing its signature ‘Multi-asset, Multi-style and Multi-manager’ investment approach.

Lonsec said the company drew its competitive advantage from its long heritage in multi-manager investing, extensive global resources, the size and experience of its research team and commitment to product evolution and improving alpha for clients.