The coronavirus pandemic-related challenges facing institutional investors this year have put some wind in the sails of Mercer Investments' outsourced CIO business, the company reported Thursday.
Mercer's global OCIO assets under management rose to $321.4 billion as of Sept. 30, up just more than 10% from $291 billion at the end of 2019, according to company announcements.
"We are seeing a direct correlation between the challenges of the pandemic and investors' interest in our investment solutions," Rich Nuzum, Mercer's New York-based president, investments and retirement, said in a news release.
Equity markets have recovered from sharp declines early this year but interest rates remain near all-time lows, forcing many institutional investors to move out of their comfort zones as they position their portfolios to meet their long-term goals, Mr. Nuzum noted.
Janet Li, the firm's Hong Kong-based wealth business leader for Asia, in an interview Thursday, agreed. Clients have had to diversify their portfolios "much more than before (to) achieve certain risk-adjusted returns," expanding the capabilities required to manage that broader array of asset classes, she said.
Many asset owners recognize that their governance capabilities have been stretched thin this year, Mr. Nuzum said.
Ms. Li, in Mercer's news release, said growing demand for OCIO investment solutions this year has been particularly evident in Asia. She declined, in Thursday's interview, to provide specific numbers.
Together with the increase in OCIO demand, Ms. Li said the challenges institutional investors face in conducting manager due diligence has likewise seen a sharp increase this year in demand for Mercer's services.
