The fallout from the global financial crisis will spark an increase in the uptake of implemented consulting by institutional investors as they look for ways to survive under enormous pressure, according to Mercer.
Institutional investors are increasingly considering an implemented consulting approach as a way of outsourcing their investment process, Mercer’s investment management business head Gary Burke said.
“The past 12 to 18 months has been an extremely stressful period for all investors, particularly for certain institutional investors,” he said.
“For many, a lack of economies of scale and resources to properly research and assess the risks inherent in their investment strategy has added unprecedented pressure.”
Mercer has observed an increasing amount of interest for implemented consulting from a diverse range of institutional investors beyond the traditional superannuation funds.
Burke said universities, foundations and charities, institutional fiduciaries and insurers are all recognising the merits of “going implemented”.
“The three key factors an institutional investor needs to look for in a potential implemented consulting partner are a robust and flexible portfolio, with a consistently competitive investment performance and the resources to meet service delivery expectations,” he said.
“Portfolios need to be stable enough to cope with the sort of extreme volatility we’ve been going through. They also need to be flexible to allow institutional investors to build their own unique portfolios rather than be forced to adopt a standard ‘cookie cutter’ solution.”
