Bear Markets Weigh On Manager Searches
Anecdotal evidence indicates that searches – including both defined contribution and defined benefit plans – are down from last year, and this is confirmed by just released data on searches by Callan Associates – data which is, by the way, borne out by less formal reportings from other major consulting firms.
According to preliminary figures, in the six months to June 30, 2002, Callan has done a total of 61 searches for its institutional clients, compared to 92 in the comparable period of 2001 and 88 the year prior to that.
The biggest drop in terms of percentage has been international mandates, where there have been just 7 this year – a fraction of the 22 reported for 2001 or the 19 in 2000.
In the fixed income arena, core-plus searches are up, despite the fact that most core-plus managers have actually been outperformed by their core counterparts. In fact, fixed income searches remain steady, with 15 reported this year compared to 18 last year and 13 in 2000, but domestic equity searches have fallen off with the slumping markets.
Callan notes that while 37 such searches, worth some $5.13 billion in assets, have been conducted this year, a year ago there were 48 searches with some $6.33 billion at stake. In 2000 the number of searches was even higher, 52, but the aggregate value of the mandates was just $3.21 billion.
Large cap value has, unsurprisingly, dropped off the charts – three searches in the last six months compared to 14 in the comparable period in 2001 and 18 searches in 2000.
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