US - The number of new mandates placed by US institutional investors increased 16% in 2010 with a sharp increase seen in specialist mandates like real assets, commodities and other alternatives.
Tracking data from manager consultant Eager, Davis & Holmes shows investors placed 2,352 mandates with new managers in 2010 worth a total $164bn. In 2009, total mandates were 2,033 worth a combined $120bn.
However, managers are still feeling the effects of the credit crunch as the value of the assets place remains well below 2007 levels of $268bn, the firm said.
There was a surge in placements in some alternative asset classes.
Placements to real assets, commodities and oil and gas combined totalled 110, up a whopping 214% from the previous year. In 2010, the mandates were worth $3.8bn, up from $1bn in 2009.
There were 135 placements to single manager hedge funds in 2010, up over 100% from 65 the year before. Assets placed in 2010 were worth $4.2bn, up from $1.5bn.
Hedge funds of funds received more mandates in 2010 than in 2009, but the value of those mandates was much lower. In 2010, investors placed 100 mandates worth $4.7bn, as compared to 60 mandates in 2009 worth $6bn.
There was also an increase in the number of mandates placed in real estate and emerging market equities in 2010.
"Fund sponsors' implementation of LDI (liability-driven investments), alpha-beta separation and hedging against inflation are evident in some of the mandates that saw increased placements in 2010," observes David Eager, partner at Eager, Davis & Holmes.
"As we have been predicting, there was a continued high demand in a variety of specialty areas. This underscores the need for marketers to focus on consultative selling to meet fund sponsors' changing needs, and not be product pushers," says Eager.
This week's edition of Professional Pensions is out now.
Nearly 60% of UK employers consider defined contribution (DC) master trusts to be the "most suitable" pension fund for their employees, according to research by Buck.
Companies which have tried to dodge their pension duties by changing their identities are being "hunted" by The Pensions Regulator (TPR) in a crackdown on non-compliance with auto-enrolment (AE).
Removing liquidity restrictions would enable DC funds to capitalise on the potentially higher and safer returns that DB schemes have benefitted from, says Patrick Marshall.