Wilshire Associates will open an office in London later this year - its first outside the United States - to service Europe and South Africa, said Stephen Nesbitt, senior vice president.
The move represents the latest effort to penetrate the growing market for investing consulting services in Europe. Frank Russell Co., William M. Mercer Inc., Towers Perrin, Watson Wyatt Worldwide and Cambridge Associates Inc. all have been seeking to build greater presences in Europe.
U.S.-based consultants are pushing into Europe as their home market has become mature and somewhat stagnant, said Koen de Ryck, managing director of Pragma Consulting NV, Brussels.
Mr. Nesbitt said the Santa Monica, Calif., consulting firm is "looking to compete globally." The firm also has sought opportunities in Asia "but we haven't been as successful there," he said.
He added Wilshire may open another U.S. office this year, in addition to a new office in Minneapolis and existing satellite offices in New York and Pittsburgh.
Mr. Nesbitt said Wilshire already has some clients in Great Britain and South Africa, but he feels the London presence will help it to expand in those markets and in continental Europe.
The London office will provide traditional consulting services as well as market Wilshire's investment technology software. Julia Bonafede, currently a vice president in Santa Monica, will head up the new office.
Mr. Nesbitt said Wilshire already had adapted most of its software, particularly its global equity and global fixed-income portfolio attribution analysis programs, to local needs. The firm has reconfigured its software for Windows and for multicurrency use during the past couple of years.
Wilshire also will market its asset allocation software and Compass performance measurement product for plan sponsors. But it will not offer any manager-of-managers investment products.
The new office will not affect Wilshire's joint venture with Amsterdam-based Triple-A Consulting. Triple-A will remain responsible for providing consulting services in the Netherlands and Belgium.
Other leading consulting firms also see great potential in Europe, as the demand for investment consulting services is just beginning to take off on the continent.
"That market's developing," explained Susan Douse, senior consultant at Watson Wyatt Worldwide, Reigate, England. "It hasn't got a ready-made consulting industry."
While prospects are encouraging, consultants still might have a tough road to hoe, since European institutions are not used to paying for consulting advice. "It's very difficult to put a bill in front of them. And the concept of consulting is new to them," Ms. Douse said.
But numerous consultants believe multinational corporations are leading the trend toward hiring investment consultants for their overseas subsidiaries, and others will follow.
Frank Russell's growth is spurred in part "to help multinationals to have a single supplier for all their (investing consulting) needs worldwide," said Len Brennan, managing director for Europe, the Middle East and Africa.
In the past two years, Frank Russell has added more than 20 staff members to its London operation, increasing the total to more than 65 people.
In particular, the firm has shifted its global manager research operation to London. The firm now has eight analysts there and expects to add two more this year. Russell's manager research function is at the core of Russell's consulting and manager-of-manager products. Russell also offers performance analytics and measurement products.
Russell, based in Tacoma, Wash., also has offices in Zurich and Paris, each staffed by five employees.
Watson Wyatt, meanwhile, is still adjusting to the strategic alliance formed last year between Reigate-based R. Watson & Sons and Washington-based The Wyatt Co. Roger Urwin, head of Watson's investment consulting practice, has been named global investments practice coordinator for the combined firm, while Alastair Sutherland will coordinate the firm's research operations in Europe, the United States and Asia.
While Watson Wyatt already is a major player in Britain, it will support its continental European consultants from its Reigate operation.
Watson Wyatt lost a few key investment consultants on the continent since the alliance was formed, particularly Hans-Ruedi Mosberger in its Geneva office. Eventually, Watson Wyatt would like to have more consultants dedicated to investment consulting in Europe, she added.
Mercer Investment Consulting, after closing its investment consulting operation in Brussels a few years ago, has gone down the acquisition trail and recruited new consultants aggressively.
In June, it merged with Klein Haneveld and Associates B.V. in The Hague to from William M. Mercer Klein Haneveld Investment Consulting B.V.
Mr. Klein Haneveld is a former executive of the Shell Pension Fund, J.P. Morgan and Swiss Bank Corp.
In addition, the firm last year named Vivienne Carnt, formerly manager of Vauxhall Motors Ltd.'s pension fund, to co-lead its push into continental Europe.
Mercer is believed to be searching for other acquisitions or ways to expand, particularly in Belgium and Switzerland, both of which have well-funded pension systems.
"We anticipate further growth throughout the continent," said Andrew Dyson, senior investment consultant in Mercer's London office.