Mercer finds what drives manager searches

Mercer Investment Consulting has identified property as the leading Australian sector driving investment manager searches in the region.

The annual study, which draws together information gathered by Mercer globally, found property closely followed by Australian and global equities were the key areas where their clients in Australia had been conducting searches for investment managers.

Looking from the global perspective, international equity remained the most popular product category among its clients globally.

In total, Mercer recorded 741 global searches for investment managers in 2006, with over US$92 billion in assets placed last year, equalling an average of US$124.5 million placed per manager.

In Australia, Mercer advised on 110 searches and placed some US$9.3 billion in assets, and also found significant manager search growth in Asia, where it almost doubled to 83.

Simon Eagleton, business leader for Mercer Investment Consulting, Australia and New Zealand, said it was not surprising to see the disparate asset classes leading global investment manager searches versus those in Australia.

“Global equity is of use for investors based in other markets as well,” he said, whereas property tends show up as more popular on a region-by-region basis.

He attributed the growth in asset manager search activity globally to the strong performance of capital markets rather than any increasing tendency for clients to replace managers.

“A big driver is the continued growth in the superannuation industry, it’s not to do with people sacking managers and then replacing them,” Eagleton said.

The steady flow of new and innovative products onto the market, in response to the large amounts of liquidity in the market, were also part of the growth in manager activity.

“It’s a combination of capital markets roaring ahead, and some other clients replacing managers as well,” he said.