Combining Mercer’s scale and expertise to manage complexity, deliver on opportunities and keep your objectives in focus.
Dan Melley | 06-Aug-2020
Our heritage is investment consulting and we have been advising and creating plans for investors for 42 years. But as we have seen investment strategies – and even asset classes – becoming increasingly complex, we realised we could do more to help our clients reach their goals. We still help our fiduciary management clients identify their objectives and plan an investment strategy, but crucially, they benefit from our implementation and monitoring, too.
Over the past 15 years, we have built up operational capabilities and portfolio management systems to rival any in the asset management industry. We have appointed strategists to make calls on how to shift our clients’ portfolios either towards an opportunity or away from danger, and decision-makers to implement their ideas at the right time.
Our expertise lies in building intellectual capital, understanding markets and generating investment ideas, and we carefully select the managers we think are the best at executing them. Using this process and drawing on our world-class investment research team, we have grown to be the largest fiduciary manager by assets in the world*, managing more than GBP 234bn.**
There is more to fiduciary management than just assigning the implementation of an investment strategy and checking back every quarter. At Mercer, hundreds of people and thousands of systems are working to help keep each of our clients’ portfolios on track to meet their wide range of objectives. From building and implementing a flight path towards full funding or selecting and regularly monitoring an asset manager, we design what our clients want and give them full oversight and control of how we execute it.
We also enable our clients to quickly adapt and adjust when they need to. Our capital markets experience and forward-looking research help us prepare for and respond to changes within client portfolios, while our in-house operational platform allows us to nimbly move money between managers, strategies or even asset classes in line with agreed parameters.
Each investor must decide how many of the day-to-day tasks they want us to undertake, knowing that some decisions they cannot assign to us. For example, each investor must determine their long-term objective and decide on their strategy and how much risk they are willing to take to get there.
However, we realise the importance of listening to our clients and working with them to reach their investment goals. The heritage and the trust we have earned from so many investors around the world have allowed us to grow to the largest provider of fiduciary management and investment solutions globally*.
It all starts with our flexible and consultative approach. Our dedicated client team will partner with you to provide access to the best thinking in the market. We encourage you think critically about the challenges you might face and provide you with the knowledge & confidence to make effective decisions based on our advice. We have the flexibility to phase in new ideas and asset classes at a pace that suits your needs. Our global fiduciary model ensures that all clients receive the same access to highly rated investment managers at the same low underlying management costs, irrespective of their size, by leveraging our collective buying power of £234.5bn**.
We tailor our clients’ return-seeking portfolios to their individual investment beliefs and build sophisticated liability-matching portfolios based on their specific profile. We manage bespoke full-fiduciary arrangements for 146 clients in the UK**.
We have a strong track record of introducing new asset classes, ideas and concepts that add value, ensuring our clients remain at the forefront of investment innovation. We have built an in-house, operational infrastructure that allows us to take advantage of new ideas and opportunities.
We have 218-strong investment research team dedicated to sourcing the best ideas. Our specialist portfolio managers blend the best managers and aim to target optimal risk adjusted returns within each asset class.
We do not manage securities in-house, but allocate to independently selected, highly rated, third-party investment managers, typically via segregated accounts, which allows us to control and monitor investment guidelines.
Our clients have experienced significantly improved funding positions with lower risk than the average UK pension fund. This chart demonstrates the significant outperformance of Mercer clients’ portfolios with materially less volatility than the average UK pension fund.
Source: Mercer, StateStreet. Mercer claims compliance with the Global Investment Performance Standard (GIPS) for Fiduciary Management Providers, a list of all composite descriptions is available upon request.***
Dan leads on commercial relationships and the implementation of Mercer’s fiduciary management distribution strategy in the UK, while also developing bespoke solutions for a wide range of clients. With more than 25 years’ experience across investment consulting, institutional asset management and business development, Dan is a key figure on both Mercer’s UK Growth Leadership and Investment Solutions European Leadership Committees. Dan started his Mercer career in New York in 1997 before transferring to London in 2000, where he worked until the end of 2014. During this time, he led the launch and development of Mercer’s UK fiduciary management business from inception to overseeing more than GBP 16,8bn in client assets. Dan then moved to Winton Capital Management and Putnam Investments before re-joining Mercer in February 2020.
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*Source: CIO Magazine, 2020 ranking.
**Source: Mercer, 31 December 2019.
*** Full methodology and CMA FMPS Performance composite available on request by email to firstname.lastname@example.org
Source: Mercer estimates, State Street Fund Services (Ireland) Limited and Pension Protection Fund (PPF) 7800 published data.
The blue line in the chart shows the average funding level improvement of Mercer’s fiduciary clients based on aggregated assets and liability values from unconstrained delegated clients with inception dates before 31 May 2019. These funding levels are net of fees and include deficit contributions up to 31 May 2020. Clients included have a de-risking journey plan based on funding level triggers, where Mercer has full discretion for the composition of both the growth and matching portfolios. The start date reflects the point at which a statistically significant number of clients fell into the data set (n = 30).
The yellow line in the chart shows the PPF 7800 aggregated funding level improvement, which includes both schemes with a funding level deficit and schemes with a funding level surplus. The PPF 7800 data is based on aggregate asset and liability values. Please note that the restated liabilities have been used for the PPF data so there will be jumps in the PPF funding level at these dates: 30 May 2014, 30 Nov 2016 and 30 Nov 2018.