Money manager Mercator Asset Management is returning all its client assets effective April 30, approximately $740 million, said a memo from its general partners obtained by Pensions & Investments.
“The current cycle favoring growth, which started in 2007, has been unprecedented in duration and magnitude, calling into question the efficacy of value investing by many market participants,” the memo said. “As a result of these adverse market conditions, sentiment and other factors, Mercator has experienced a significant loss in assets under management. The related decline in revenues has made it difficult for us to maintain our current organizational structure.”
The memo also noted the international equity manager will go through an organizational restructuring and use its own capital to manage an international value equity portfolio following the return of all client assets, “confident that our disciplined value approach will return to favor.”
As of Dec. 31, 2014, Mercator had $2.4 billion in U.S. institutional tax-exempt assets under management, all in international equities, according to Pensions & Investments data. That was down from $5.6 billion at the end of 2010 and $9.1 billion at the end of 2007, according to P&I data.
Mercator spokeswoman Bianca Pileggi did not return a phone call seeking further information by press time.