Institutional investors continue to search for yield in multiasset strategies and alternatives away from traditional, single-strategy asset allocations such as equity and fixed income, according to Mercer.
The consultant's 2013 Global Manager Search Trends report found that overall search activity was similar to that in 2012, with 760 total searches last year compared with 776 in 2012. Search activity across Asia, Europe ex-U.K. and the U.K. increased, while the number of searches in Australia and North America declined. Mercer's report said there was a continued decline in manager searches from both defined benefit and defined contribution plans. However, the value of assets placed increased across all regions.The total value of assets placed in 2013 was $60.6 billion, up 14% compared with 2012.
Emerging markets equity was the most popular search in the U.S. and searches for multiasset strategies were also particularly popular, increasing by one-third over the year to 53 searches, with the U.S. and the U.K. leading the way. Multiasset searches increased 25% in the U.K. “Surprisingly,” Mercer said in its report, the most popular search in Europe ex-U.K. was for infrastructure and timber.
Searches in Asia increased 288% to 66 over the year, while assets placed jumped 75% to $3.5 billion. Global equity was the most popular search, while international multiasset gained the most assets. Australia dropped slightly in terms of the number of searches, although assets placed increased 101% to $13.7 billion in 2013. Equity and global equity were the most popular searches.
“The trend away from traditional asset classes observed in recent years continues, driven mainly by investors seeking to diversify their growth portfolios and ensure they incorporate multiple return drivers,” said Deb Clarke, global head of investment research at Mercer, in a news release accompanying the report. “Investors have continued to increase allocations to global strategies and more diverse mandates, including investment in alternative assets and diversified growth funds.”