European Plan Sponsors Embrace Outsourcing

October 12, 2001 ( - Plan sponsors in continental Europe are increasingly outsourcing the money management function, a recent study by Greenwich Associates finds.

The number of outside managers hired for segregated accounts rose to 5.7 this year, up from 5.2 in 2000, with increases particularly high in:

  • Switzerland, where the number increased from 6.3 to 7.4, 
  • Spain, where it went up from 3.0 to 5.1, and 
  • Italy, where it increased from 2.8 to 3.8

And some 42% of all plan sponsors on the continent have plans to hire more external money managers next year. Specialty mandates are becoming increasingly popular, with demand rising from 33% in 2000 to 38% in 2001

Contributing to the increase, are the marketing efforts of international asset management firms. European plan sponsors report that they received an average of 12 new solicitations from investment managers this year. Marketing activity was particularly high in Nordic countries, where 16 solicitations per institution per year were reported.

Pay Scales

Meanwhile the survey also showed Continental institutional professionals earn $106,000 on average, up from $100,000 a year ago. Base salaries average $92,000, while bonuses average $14,000. According to the research:

  • Swiss professionals are the highest paid – earning $133,000 in total compensation, up from $101,000 in 2000
  • Swedish and Dutch professionals follow, with the average compensation package being $126,000 in Sweden, and $119,000 in the Netherlands
  • Spanish professionals earn the least, bringing home a total of $79,000, down slightly from $80,000 last year.

The data is based on interviews with professionals from 280 large funds and other institutional investors in continental Europe.

– Camilla Klein