Upon completion of the transaction, Mercer will build upon Hammond’s position as the third largest investment consulting firm serving endowments and foundations in the U.S., according to a news release. Mercer said the acquisition further enhances its alternative research and investment capabilities and provides additional consulting opportunities in the private wealth and health care markets.
The announcement noted that in the period 2005 to 2009, endowment and foundation funds using investment consulting services grew at a compound rate of 10% annually, compared to a 5% annual rate of growth for both corporate and public funds in the U.S., according to data from Greenwich Associates.
The transaction is expected to close at the end of 2010. Terms of the agreement were not disclosed.“We believe that Hammond’s US endowment and foundation clients will benefit from Mercer’s work not only with endowments and foundations worldwide, but also with the insights we have developed in working with a range of institutional investors worldwide,” said Jeff Schutes, Mercer’s US Investment Consulting Leader, in the announcement. “Many of these investors share the characteristics of long-term investment objectives and limited short-term obligations, allowing them to consider investments in alternatives and other opportunities that offer less liquidity but potentially higher returns. Other advantages that will benefit clients include a deeper capital pool to fund initiatives such as technology and reporting improvements, and risk management analysis expertise to augment Hammond’s knowledge in this area and make additional risk management tools available.”