The New York–headquartered investment consultant, which has over $1 trillion worth of assets under management/advisement, is set to acquire Hammond Associates by the end of 2010. Upon completion of the transaction, Mercer will build on Hammond’s position as one of the largest investment consulting firms serving endowments and foundations in the US, and its experience of the private wealth and health care sectors. Terms of the agreement were not disclosed and as of the time of announcement it was not known if Hammond Associates would now take on the Mercer name.
Mercer is a global provider of consulting, outsourcing and investment services. Mercer’s investment services include investment consulting and multi-manager investment management. The company is a wholly owned subsidiary of Marsh & McLennan Companies. Its clients include retirement systems, foundations and endowments, financial institutions, insurance companies and other institutional investors. In late Q3 2010, following a comprehensive review of its business strategy and changes in the public fund marketplace, Mercer decided to cease advising US-based public defined benefit plans.
Founded in 1985, Hammond Associates advises over 200 institutional investors on either a discretionary or non-discretionary basis. The majority of these clients are based in the US, with a number of overseas clients. In the alternative space Hammond Associates advises institutional investors on their investments in private equity, hedge funds and real assets, including real estate and infrastructure.
This is not the first time Mercer has looked to expand or carry out a horizontal acquisition of one of its competitors. In February 2009, it was announced that Mercer would be acquiring Callan Associates. The acquisition and merging of the investment consulting businesses of the two firms aimed to strengthen the US presence of Mercer. However, a month later the proposed acquisition was called off, with no official reason given for the abrupt termination of the agreement which was meant to be done by the end of Q1 2009.
Following this, both Mercer and Callan Associates agreed to keep their investment consulting businesses separate. Callan Associates is an independent employee-owned investment consulting firm headquartered in San Francisco. It advises approximately 300 clients, including public and private defined benefit and defined contribution pension funds, insurance companies, endowments, foundations and investment management firms.
The acquisition of Hammond by Mercer is one of a couple of recent mergers and acquisitions in the investment consulting industry. Earlier in the year, Hewitt Associates acquired endowment and foundations consulting specialist, Ennis Knupp & Associates. Weeks later, Hewiit Associates and Aon Corporation also announced their intentions to merge, with Hewiit Associates merging with Aon subsidiary Aon Investment Consulting. Both mergers have been completed and the integration process is ongoing.
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