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May 2024
AAM Magazine
May 2024
Back to 2021 Best of the Best Awards Supplement

Service plus solutions through crisis and beyond

By Paul Mackintosh   

Mercer is a repeat winner of Asia Asset Management’s (AAM) Best of the Best Awards in multiple categories, recognising its work as a leading global investment and retirement solutions firm. Hong Kong-based Janet Li, Wealth Business Leader, Asia, for Mercer, herself a recipient of a previous Best of the Best Award for Pensions Woman of the Year, explains the company’s service ethic and its devotion to the interests of its clients. The firm was awarded Asian Asset Consultant of the Year (4th consecutive year) and ASEAN Asset Consultant of the Year (3rd consecutive year) in AAM’s 2021 awards.

Continuing service through the crisis

During the Covid-19 pandemic, Mercer dealt with a flood of inquiries from its clients. “In times of crisis or uncertainty clients always need to be able to reach out for support, advice and help,” Li notes.

The specific solution offered during the current global crisis has varied from client to client. As Li explains: “It’s very much bespoke, because one-size-fits-all would never work across our diverse range of clients,” she tells AAM.

Mercer avoids simply pressing various products or cookie-cutter solutions on clients. Rather, she adds: “We look at clients’ investment objectives, risk tolerance, the constraints they face – especially during Covid, their need for heightened governance – so that we can tailor our solution for them.” In her view, this level of personal attention is integral to the level of trust between Mercer and its clients.

According to Li, over the course of the pandemic, many of Mercer’s clients have continued with their existing investment plan for the year ahead. The rest either sought to change their plan, or delayed action, waiting on clearer visibility before moving ahead.

“Our clients rely on the powerful manager research capabilities of Mercer, with more than 220 full-time professionals located around the world whose day job is to research managers and feed data into our Global Investment Manager Database, which features close to 35,000 investment strategies.” With widespread travel bans during the pandemic, she notes, Mercer has helped many clients to undertake due diligence of fund managers and investment prospects, leveraging the Mercer database and teleconferences.

Asset allocation

Asset allocation strategy and behaviour during the Covid-19 pandemic, in Li’s experience of Mercer clients and others, have confirmed that “those who have a good governance structure, with a disciplined framework for asset allocation to rebalance their strategies, proved to be the winners generally.” Some investors, she says, decided to switch into cash during the crisis. Of course, some of these might have been simply responding to liquidity needs, but, “from an investment strategy standpoint, those who stuck to their principles, and continued with their existing rebalancing strategies, generally turned out to have better returns on their portfolio relative to cashing out,” Li reports, “and, in many cases, much better.”

In this context, Li spotlights investors’ ability to stay calm towards market sentiment and momentum, “and, rather, to focus on the principles and the governance set-up of the fund.”

“The key point is still around the governance structure,” she concludes.

Sustainability and corporate culture

Mercer has a strong pedigree in sustainability – a pedigree which reflects other aspects of the company’s culture, according to Li. In any case, this is no longer optional for investment managers. “ESG or sustainability is no longer something that a fund can decide whether they will do or not,” she affirms. “The investors, the beneficiaries, even the regulators, all see it as something of a requisite.”

In Asia, Mercer has found itself taking a leading role in this area, for both clients and regulators. Li points to the proprietary Analytics for Climate Transition (ACT) framework devised by the firm’s Responsible Investment team to look at climate change and its impact on a client’s portfolio. “ACT is a powerful tool that helps clients to incorporate climate change elements within their portfolios.” Meanwhile, she adds, across Asian markets, “we are also helping regulators, industry associations and key asset owners to set the standards and principles.”

This thought leadership echoes Mercer’s overall commitment to provide its clients, many of them of long standing, with leading-edge advice and solutions. “Because clients look to us to for advice; we are constantly embracing new ideas and new opportunities to keep challenging ourselves, so that we can continue to deliver for our clients,” she says.