As institutional investors grow more interested in emerging market and alternative asset classes, they are looking for managers to hire around the world.
In Mercer’s 2010 Global Manager Search Trends report, the employee benefits and search consultant announced today an increase in investors searching for managers of emerging market stock and debt, real estate, commodities, infrastructure and multi-strategy hedge funds. The 2010 searches where Mercer provided advice represented 361 institutional investors. Global/international equity remains the most popular search category.
“The trend away from traditional investment began some time ago,” says Andy Barber, Global Director of Manager Research at Mercer. While the global financial crisis slowed the pace, he expects the trend to continue.
Among U.S. defined benefit plan sponsors, the emphasis was on increasing holdings in international stocks—both in developed and emerging markets. Sponsors of 401(k) plans were also interested in real estate investment trusts and inflation-linked Treasuries.
The strongest trend in the United Kingdom was a shift towards emerging market debt.
“Looking forward we expect to see limited interest in domestic equities or in the traditional markets’ regional blocs,” Barber said. “Exposure to alternative investments in aggregate is rising and we expect to see increasing activity in this area.” German investors were also interested in emerging markets, seeking both stock and bond managers. Some Asian investors are increasingly worried about increases in inflation, which led them to seek managers of global inflation-linked bonds.