U.S. institutional investment manager hires rebounded in 2010 compared with the previous year, according to a report released Monday by manager consultant Eager, Davis & Holmes.
While placements with alternatives managers continued to grow, the year also held some good news for active U.S. equities managers, the report found.
The report shows new mandates won by managers in 2010 increased 16% in number and 37% in dollar terms.
The report is based on news reports, including from Pensions & Investments, as well as public disclosures by plan sponsors. David Holmes, a partner with Eager, Davis & Holmes, estimates that the report reflects about a third of new mandates in 2010.
The report tracked 2,352 placements in 2010 compared with 2,033 in 2009. Mandates totaled $163.9 billion last year compared with $119.5 billion in 2009.
But Mr. Holmes said the dollar value of mandates was low relative to the years before the credit crisis.
The report shows the median mandate was $25 million in 2010 compared with $42 million in 2007. The median in 2009 was $24 million.
“It's encouraging to see the rebound in 2010; the question is what's going to happen in 2011,” Mr. Holmes said in an interview.
The uncertainty about the economy is still clouding the picture, he said.
Mr. Holmes said the analysis showed increased hires from 2009 in several asset classes, including U.S. active equity, international active equity, alternative investments and real estate.
He said while new U.S. active equity mandates increased by only five, to 412, the dollar amount placed was way up; new mandates grew 65% to $21 billion in 2010, compared with $12.7 billion in 2009.
“Increased hiring opportunities for U.S. active equity managers was a bright spot for an asset class that experienced net outflows for much of 2010,” Mr. Holmes said referring to new mandates. “Fund flows don't always correspond with hiring opportunities because investment style and investment manager changes or terminations can drive hiring activity.”
He said there was particularly strong demand in 2010 for more specialized mandates, such as alternatives, as institutional investors looked to diversify.
For example, placements for single manager hedge funds increased to 135 in 2010, from 65 in 2009 while the dollar amount of new mandates increased to $4.237 billion last year from $1.491 billion in 2009.