William M Mercer has retained its position as the largest pension fund consultant in the United States, according to Nelson Information's latest survey of investment consultants.
For the second year running, Mercer had the most clients according to the Nelson survey. The 2001 survey found that Mercer had an 11.5% market share, with a total of 1300 clients. Of those 1300 pension fund clients, 249 had assets of $100m or more. In comparison, Mercer's nearest rival, Cambridge Associates, had 200 clients with assets of at least $100m and a 9.3% share of the market.
Additionally, the survey found that Mercer was the consultant most likely to be hired by corporate or ERISA clients. Mercer has 141 corporate fund clients, giving it a 14.4% share of the market, ahead of Hewitt Investment Group in second place, with 81 clients and 8.3% of the market.
However, Mercer's domination of the Nelson survey was far from complete, as Callan Associates retained its position the number one consultant ranked by total client assets of $100m or more. This year, Callan's 177 clients - with $100m in assets or more - had a combined total of $1205.2bn. Frank Russell was second, with $762.7bn in assets split between 81 clients, whilst Watson Wyatt was third, with $653.3bn shared between its 80 clients. In contrast, Mercer was fifth with $567.4bn from its 249 clients.
Callan also beat Mercer into second place amongst public pension funds for the second year in a row. Callan had 57 clients with assets of $100m or more, giving it a 15.1% share of the public / government pension fund market. Mercer was close behind, with 48 clients and 12.7% of the market. Wilshire in third place, was far behind Mercer and Callan, with 26 clients and only 6.9% of the market.
Nelson found that pension funds are using consultants less now, compared with at year ago. In 2000, 48.7% of funds with assets in excess of $100m used consultants to assist them with setting investment guidelines, choosing and monitoring managers. This year, 47.1% of the 4591 pension funds with assets in excess of $100m used consultants.
The survey also found that public funds are consultants' best customers, with 78.7% retaining consultants. Less than half of corporate pension plans, 42%, use consultants.
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