EUROPE - Institutional investors in Europe regained their confidence in 2009, as global investment manager search activity increased by almost a quarter over 2008 levels, according to Mercer.

The consultancy's 2009 Global Manager Search Trends report shows that European pension funds' appetite for fixed income increased last year, as manager searches in the asset class increased from two in 2008 to 45 in 2009.

Real estate also became an attractive option at a time when many markets were low, with searches for property increasing fourfold.

Worldwide, almost 830 investment manager searches were conducted by over 400 companies, according to Mercer's 2009 Global Manager Search Trends survey, with the total number of searches in the European region exceeding even 2007 levels.

Andy Barber, Mercer's global head of manager research, said he expected increasing interest in higher yield products as a way of maximising returns, adding this would lead investors away from the mainstream markets.

Barber also predicted that some pension schemes would focus on one type of investment vehicle. "Looking forward, we expect a growing interest in liability driven investment (LDI) as defined benefit pension clients seek to manage their assets with closer reference to their liabilities," he said.

European institutional investors launched 245 searches last year worth $41.9bn (€29.2bn), accounting for only 30% of all searches but 43% of total assets.

The UK's trend away from domestic equity was also reflected globally, as companies aimed to diversify. Barber said this highlighted "a continuing trend towards a more global approach to equity management".

The European interest in real estate was also reflected internationally. Barber said: "For both corporate bonds and real estate, an element of pent-up demand was realised in 2009, as many investors had been waiting for more realistic prices before committing new money."
 

Topics