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United States
New York , 17 September 2009

Investment manager search activity in the US rose during the first half of 2009 versus the same comparable period in 2008, according to data released by Mercer.

Mercer advised clients on 65 searches in the US during the first half of 2009 compared to 61 during the first six months of 2008. Assets placed also showed a modest increase from $7.3 billion to $7.8 billion for the same two periods. The most notable shift in activity was a significant increase in fixed income mandates and a decrease in equity-related activity, a reversal from 2008.

According to Jeff Schutes, who leads Mercer’s investment consulting business in the US, “Fixed income search activity was driven by several factors. First, many sponsors of defined benefit plans focused on improving the alignment between asset and liability growth to minimize their funded status risk by employing long-duration strategies. Secondly, several core fixed income managers dramatically underperformed their benchmarks during 2008 and were replaced by new managers. Lastly, some plans took advantage of opportunities within the credit markets in seeking additional alpha.”

Fixed income searches in the first half of 2009 totaled 26 versus 11 during the same period in 2008, while assets placed rose from $1.1 billion to $4.7 billion. Activity was strong in core investment grade, core opportunistic, credit and long-duration mandates.

Within US equity, search activity declined significantly from 29 searches during the first half of 2008 to 17 during the first half of 2009. Large cap mandates showed the greatest decline while small cap style mandates (growth and value) had modest activity.

International equity (including all global, EAFE and other global ex domestic) remained essentially flat in terms of the number of Mercer-conducted searches but showed a significant rise in assets placed. Emerging markets showed a slight decline from the first half of 2008.

Searches in alternative asset classes were muted during the first half of 2009 as sponsors focused on realigning their risk management policies. The real estate asset class showed a slight rise versus the first half of last year while searches in hedge funds and private equity declined.

Mr. Schutes noted, “While capital market volatility has diminished to some extent from 2008, we believe sponsors will continue to concentrate on asset allocation policies and manager performance/risk issues.”

Notes for Editors

Manager search is the process that takes place when an institutional investor, such as a pension fund, is seeking to hire an investment manager to manage a portfolio of assets on its behalf. This hiring activity can arise as a result of growth in assets under management, a change in investment strategy, a change in investment manager structure, or a decision to replace an incumbent investment manager.

About Mercer

Mercer is a leading global provider of consulting, outsourcing and investment services. Mercer works with clients to solve their most complex benefit and human capital issues, designing and helping manage health, retirement and other benefits. It is a leader in benefit outsourcing. Mercer’s investment services include investment consulting and multi-manager investment management. Mercer’s 18,000 employees are based in more than 40 countries. The company is a wholly owned subsidiary of Marsh & McLennan Companies, Inc., which lists its stock (ticker symbol: MMC) on the New York, Chicago and London stock exchanges.

For more information, visit www.mercer.com.

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