GLOBAL - The expansion of the multi-manager market has continued apace in recent months.
Spanish consulting firm Novaster has chosen Frank Russell as its preferred provider of multi-manager products, following other deals in the UK where investment consulting firms, such as Mercer and Towers Perrin, have chosen to lose their independence and go down the preferred provider route.
In the UK, Mercer has a preferred provider deal with Attica, while Aon offers its own in-house manager-of-manager product.
Consultant Barnett Waddingham has said it will offer its clients SEI's manager-of-managers products.
Investment Solutions, the multi-manager specialist backed by South African financial provider Alexander Forbes, has started searching for UK equity, global equity and hedge fund sub-advisers after receiving regulatory approval from the UK regulator.
Frank Russell has also linked-up with Swiss pension and employee benefits consultant Pendia Associates to offer its services to Swiss institutional investors. Pendia was recently bought out by consultants Buck Heissmann. Swiss Life is also planning to offer a manager-of-manager product to the Swiss pension fund market, from 1 January 2004.
HVB Group has said it has launched Germany's first multi-manager programme for European institutional clients.
Stephan Bub, board member responsible for HVB Corporates & Markets, said: “Already the total market for multi-manager products worldwide is around $500bn, a figure we expect to increase substantially within the next few years.”
Industry experts say growth in the UK will continue to be driven by Myners-linked reform as outsourcing investment decisions to a multi-manager could shield trustees from compliance issues and potential liabilities from mismanagement.
The US - which accounts for more than 70% of the institutional multi-manager assets under management - is now saturated, which is why the hot spots are areas such as Australia, South Africa, the UK and continental Europe.
According to Cerulli Associates, over the last three years the compound annual growth rate of multi-manager assets was just 2% in the US and 37% across all other regions.
However, some fund managers have reported they are angry at research visits from consultants which offer multi-manager as they feel the information gained could be used against them.
They fear consultants could use commercially sensitive information gained from visits conducted on behalf of pension scheme clients to benefit their own in-house operations.
PwC, KPMG, EY and Deloitte must break up their consultancy and audit businesses into distinct firms to provide greater focus on the "most challenging and objective audits", the competition watchdog has said.
The Department for Work and Pensions (DWP) has released its first batch of guidance setting out how the guaranteed minimum pension (GMP) conversion legislation may be used to resolve unequal payments.
This week's top stories include the government spending £800,000 on a Gogglebox advert and MPs writing to The Pensions Regulator about its engagement with the Railways Pension Scheme.