GLOBAL - Global fund manager search activity is expected to surge by the end of the year.
According to new data from Mercer Investment Consulting, its manager searches already reached 437 by the end of June 2002. This figure is expected to double by year-end, compared to a total of 683 searches at the end of 2001. The average size of the shift has already risen from US$60m to US$78m.
If this happens, it will represent the highest number of searches since 1997, explained Mercer’s global head of research, Bill Muysken.
“The year 2000 [revealed] a surprisingly high level of activity,” he said.
“In the first half of  there was a bit of fatigue on the part of plan sponsors and activity slowed down. And then in the second half there was September 11 and plans were put on hold. So in the first half of this year a lot of pent of activity was [released].”
So far, Mercer has carried out most searches in the UK (122), followed by Australia (105) and the US (88). The total amount placed across all regions is already US$34.2bn, compared to US$41.3b at the end of 2001.
In terms of asset classes, institutional clients in the UK and European have so far poured most money into UK equities (US$2.3bn), followed by UK fixed income (US$2.2bn) and global equities (US$1.9bn).
Passive investment has already more than doubled on 2001 figures as funds look to cut active fees. Some US$5bn has already been placed with passive strategies in 1H compared to US$2.1bn for the whole of 2001.
On the flip side, the take up of US equities has been hit amid a raft of corporate scandals and geopolitical uncertainty. Mercer has only pulled 4 searches in the asset class during the 1H, compared to 16 for 2001. US fixed interest has also been badly affected with a meagre US$01.bn committed so far under Mercer, compared to US$1.8bn in 2001.
Other Europe/UK key findings include: - continued migration from balanced to specialist structures;- for UK clients most searches are expected for UK equity, global equity, and UK bonds, as well an increased use of alternatives; - Europe ex-UK clients switching from country to Eurozone are now reaching and game and are considering small-caps.
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