Opalesque Industry Update – US, Canadian consultants forecast over $420B to change hands, 13% above 2009 level, according to survey by eVestment Alliance and Casey, Quirk & Associates. |
Investment managers with strong capabilities in developed and emerging markets stocks, global equities, hedge funds and fund of hedge funds are in most demand this year from retirement plans, endowments, foundations and other large investors, according to the 2010 Consultant Search Forecast.
The survey polled 70 leading investment consulting firms in the U.S. and Canada responsible for almost US$7 trillion in assets under advisement.
Consultants responding to this year’s survey, the fourth annual poll conducted jointly by eVestment Alliance (eVestment), an influential provider of investment information and analytic technology, and Casey, Quirk & Associates, a leading management consulting firm serving the global asset management industry, also predict increased focus from their clients on inflation-protected strategies in 2010.
In 2009, consultants placed approximately $378 billion with investment managers on behalf of their clients, according to the survey. Strategies that were most in demand in 2009 from U.S. and Canadian institutional investors were international and global equities, domestic stocks, and core/core-plus fixed income.
This year, four key themes are expected to drive manager search activity:
• Fears about inflation, which are prompting investors to consider new asset classes.
• Concerns over pension liabilities hiking interest in liability-driven investment strategies.
• A need to shore up funding gaps, which is reviving appetite for hedge funds.
• A continued, rising demand for non-US securities.
“As many in the institutional investment industry are expressing a sigh of relief after a turbulent 2009, eVestment is pleased to work with Casey Quirk to present the latest results to our consultant survey, which reflects the beginning of a post-crisis thaw in strategy-driven search activity,” said eVestment Principal and Founder Heath Wilson. “We hope that the new search expectations provide a clearer picture on the challenges investment consultants will confront the next few years and the areas on which they and their clients will focus for solutions.”
“Another key finding in this year’s consultant survey is the apparent dissatisfaction with incumbent managers, as manager replacements dominated search activity particularly in traditional asset classes,” said Yariv Itah, Partner at Casey Quirk. “That will increase pressure on investment management organizations to think strategically about their strengths and weaknesses and to effectively manage their consultant and client relationships.”
Casey, Quirk & Associates provides management consulting services exclusively to investment management firms. The firm specializes in developing business strategy, enhancing investment practices and crafting distribution plans. (www.caseyquirk.com)
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