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The Geographical Make-up of Europe-Based Investment Consultants - May 2015

by Joshua Snow

  • 22 May 2015
  • PE
  • HF
  • PD
  • RE
  • INF

As April’s investment consultant blog demonstrated, the geographical location of a firm’s headquarters can be a decisive factor for consultants as they look to not only secure an advantage over competitors, but also to position themselves in close proximity to the majority of their clients.

Preqin’s investor databases collectively track 128 Europe-based investment consultants that offer consultancy services within the alternative assets space, covering private equity, real estate, hedge funds, infrastructure and private debt. As the above graphic illustrates, almost half (47%) of these consultants are based in Western Europe. Of this group, 70% are headquartered in either Switzerland or Germany; consultants’ preference for these two locations is unsurprising, as not only do they allow real-time communication with Europe, Asia and the US, but they also provide greater financial and economic advantages than other countries in the region.

The UK & Ireland lie in second place, accounting for just over two of every five Europe-based consultants. This highlights how the historical significance of the region, particularly London as a global financial hub, continues to attract firms who wish to find a suitable location in which to base their business. Of these UK & Ireland-based consultants, more than half (54%) provide services of a non-discretionary nature, while 11% offer solutions exclusively on a discretionary basis. The remaining 35% offer both types of services to their clients.

Third place is held by the Nordic region with 10%, while only 2% of investment consultants tracked by Preqin are officially headquartered in Central & Eastern Europe, in countries such as Romania, Slovakia and Slovenia. These figures suggest that for investment consultants, countries on the peripheries of the European Union play a less important role in the effort to gain location-related benefits.

The cluster of consultants in the cities of Western Europe hinges on the availability of well-established global communication channels and the continued opportunity to attract clients. Indeed, headquartering a business in Eastern Europe also presents a number of opportunities for consultants as such a location offers an unrivalled proximity to maturing MENA- and Asia-based investors. As investment levels in these regions increase, there is no doubt that consultants will expand their existing setup, or even shift their capabilities to primarily cover these geographies. However, they appear, in the current economic climate at least, to be unwilling to trade this for the solidity that Western Europe provides.

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