Mercer Acquisition Highlights Continued Industry Consolidation

(May 26, 2011) — Mercer Investment Consulting has announced that it has signed a definitive agreement with Milliman to acquire portions of its investment consulting subsidiary, Evaluation Associates.

Upon completion, this will be Mercer’s second acquisition of an investment consulting firm in 2011 after having completed its acquisition of Hammond Associates effective January 3, 2011, Mercer said. In a related transaction, Callan Associates will acquire from Evaluation Associates its public sector investment consulting business.

Specifically, according to Jeff Schutes, Mercer’s US investment consulting leader, the acquisition with Evaluation Associates provides Mercer with a stronger roster of clients in the Northeast. “Evaluation Associates also has some endowments and foundations that tie in well with the Hammond Acquisition,” Schutes told aiCIO. “We feel comfortable growing the business equally across all our segments — endowments and foundations, corporate defined contribution and defined benefit plans, as well as within the wealth management marketplace.”

“This acquisition, along with our acquisition of Hammond Associates earlier this year, underscores Mercer’s commitment to our investment business and our determination to increase our US market share,” he stated. “Mercer is growing at a time when clients are demanding greater resources and depth of expertise from their investment consultants. Not only does this provide Mercer with additional opportunity to build out our US capabilities, but it also makes available to Evaluation Associates clients the full global resources that Mercer can offer.”

When asked whether the deal reflects a continued drive toward further consolidation within the industry and the potential downfall of the boutique model, Schutes noted that he believes there will be continued consolidation in the investing consulting industry. “It’s hard for boutiques to provide global resources and specialist consulting. Consultant firms need to have scale to serve those needs.”