UK - Buck Consultants has come bottom of the Global Pensions league table of UK investment consultants' manager research capabilities.
Hymans Robertson, which has had its manager research capabilities criticised recently, came second bottom of the table which was compiled by IPN’s sister publication. Mercer came top.
In exclusive research into what fund management houses based in the UK think of the manager research functions of UK consultant firms, the survey took in the opinions of 34 UK institutional business heads at 34 separate asset managers representing in excess of $600bn in UK pensions money and $1trn in Europe as a whole. Global Pensions agreed not disclose the identities of the asset managers.
The respondents were asked to assess, in a mark between zero and five, the manager research capabilities of the top dozen pension investment consultants operating in the UK. Five was the best mark and zero the worst.
Paul Black, head of investment consulting at Buck Consultants, said: “I am a little surprised to actually be put alongside a number of these firms. Some, especially the ones who score quite highly, are either considerably larger than ourselves or are running things such as multi-manager operations.”
However, if a fund manager had not developed a relationship with a particular consultant and did not have an opinion then the fund manager was permitted to pass. For example, only 20 out of 34 respondents ‘marked’ Buck Consultants, the lowest response rate among all the consultants, while in the cases of both Hewitt Bacon & Woodrow and Mercer Investment Consulting 33 out of 34 fund managers had a relationship with those consultants and so marked them.
But Black added: “It is also possible some of the respondents are a little out of date on our capabilities.
“We have been growing quite rapidly recently and there are plans to increase our research. Manager research is not really the major part of our business - that is advising clients on investment strategy and asset allocation.”
Hymans Robertson was ranked second from bottom. This result reflected the poor opinions of the consultant that five UK institutional heads aired in July’s edition of Global Pensions.
However, many of the respondents of the current survey said Hymans had improved in recent months after taking on more staff and conducting more site visits to fund managers, believing this to be an attempt to address the issues raised in Global Pensions in July.
One respondent, asked to rank Hymans, said: “That’s the million dollar question. They have been putting in a lot of effort to improve.”
Giving a mark of one out of five, another UK institutional business head said: “My mark would have been a zero six months ago because there was no clarity of where we stood in the investment process. They lacked depth and their visits were infrequent. That is changing now.”
Mercer, however, was delighted by the news that it came top.
Nick Sykes, senior consultant at Mercer, said: “We are not surprised at the result given the time and effort we devote to manager research. We employ 38 full-time staff in our manager research capability.”
Barnett Waddingham and Towers Perrin were excluded from the survey.
Barnett Waddingham has established a partnership with SEI meaning that SEI is the preferred provider it will recommend to its £6bn client base.
Towers Perrin has closed its UK investment consultancy arm after deciding to outsource manager selection to multi-manager Frank Russell.
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