Intense institutional interest in all things alternative — from commodities to portable alpha to real assets and everything in between — has prompted investment management consulting firms to beef up their capabilities this year and to plan for more of the same in 2007 and beyond.
While long-established consulting firms have for decades provided clients with real estate and private equity advice, increasing institutional acceptance of hedge funds and related portable alpha strategies is fueling growth at established firms and the rise of new specialty alternative consultant practices, sources said.
• Mercer Investment Consulting, New York, reassigned five senior manager researchers to alternative from traditional asset classes, said Bill Muysken, global head of research. Mercer is searching for two senior alternatives researchers to be based in North America and Europe. The refocus and additional hires will double the number of alternatives specialists at the consulting firm to 12 by the end of the year, Mr. Muysken said.
• Callan Associates Inc., San Francisco, established a new alternative investment group, said Gregory C. Allen, executive vice president and director of research. About 10 alternative investment specialists will move into the new group. Callan also is stepping up its hedge fund manager research, reviewing about 125 "institutionally viable" funds, to meet demand for direct investment, said Mr. Allen. Callan might add another researcher to support the direct hedge fund investment program.
• The alternatives unit at CRA RogersCasey, Darien, Conn., likely will add two investment specialists to its team of six next year and will budget significant dollars for new alternative investment risk management technology.
• Segal Advisors Inc., New York, is looking to add more staff and technology in alternatives and, after a review, might reassign existing staff to specialist alternatives positions.
• Marco Consulting Group, Chicago, added five employees in the past three years with alternatives responsibilities and installed a new web-based reporting system to enhance manager monitoring. More automation and the addition of experienced, dedicated alternatives specialists are planned.
Firms that have added research staff to their talent pools this year or plan to next year for hedge funds and funds of funds, real estate and private equity research and consulting include Chicago-based Ennis Knupp + Associates and Clark Strategic Advisors Inc.. In 2007, Clark likely will reassign an analyst now focused on traditional asset classes to be the fifth hedge fund specialist on its research team, and Evaluation Associates LLC, Norwalk, Conn., also may add staff to its hedge fund and fund-of-fund efforts.