Mercer Buys Fund Manager to Access Private Markets

Mercer is to buy a Swiss fund manager to expand its access to private markets, the company has revealed.

The consultant is to acquire SCM Strategic Capital Management, subject to regulatory approval, to expand its advisory and outsourced investment reach. SCM has invested $11 billion in private markets since its inception in 1996 and advises or manages portfolios with a net asset value of $4 billion.

“Increasingly our investment clients are seeking advice regarding alternatives investment strategy, either through a custom portfolio or a delegated solution,” said Phil de Cristo, president of Mercer Investments, adding that the company already had good reach in the sector.

In January 2012, Mercer announced a structure shake-up that would see it better poised to act as a fund manager on behalf of its clients, rather than just offer them advice.

At that time, de Christo said: “Investments is a high-growth business for Mercer that has grown at a double-digit rate over the past nine quarters.”

This growth has continued with the firm today citing funds under management of $108 billion around the world.

Announcing the acquisition of SCM, de Christo said Mercer clients had been demanding more access to alternatives through its channels. This meant, de Christo said, that it would retain SCM’s investment team, based in Switzerland. SCM is a specialist in private equity, real estate, and infrastructure.

For its part, a note on the Swiss manager’s website said a “new chapter in the history of SCM” was about to start.

“As a result of the merger, SCM will be functionally integrated into the private markets business of Mercer Investments and the number of private markets investment professionals will increase from about 30 to about 50 globally,” the note—penned by the founder and CEO Stefan Hepp, and the CIO Ralph Aerni—said. “Besides staff in Zurich, London, and Frankfurt, the combined entity will have a significant presence in the USA where SCM has no offices to date. The Asian presence will be increased in Hong Kong and extended to Australia.”