Co-creating the future
As the world becomes increasingly complex, the number of different elements that need to be factored into investment decisions are growing exponentially, demanding an ever-higher degree of specialisation.
With few organisations able to achieve this level of expertise on their own, Mercer prides itself on reshaping retirement and investment outcomes through working with its clients and partners to co-create the future, enabling them to leverage its research capabilities, proprietary tools, and specialist knowledge to achieve their goals.
Wealth Business Leader for Asia, Janet Li says: “We are dedicated to helping our clients make and implement better decisions for their retirement plans, long-term savings and investment strategies.”
Mercer has been providing customised advice and implementation, supported by forward-looking research, in Asia for more than 40 years. During the past year, the company has continued to expand its business in the region with clients across 10+ markets, advising on sovereigns, pension schemes, endowments and foundations, insurance, family offices, and wealth management platforms. It has also further increased its research and investment management capabilities across public and private markets asset classes in Asia. These significant achievements have resulted in Mercer winning Asian Asset Consultant of the Year consecutively for five years and ASEAN Asset Consultant of the Year consecutively for four years in Asia Asset Management’s Best of the Best Awards 2022.
ESG boom
Looking ahead, Mercer is predicting a sustainable investment boom in the region, as the Covid-19 pandemic accelerates the focus among investors towards environmental, social and governance issues, transforming it from a side-fund to a main-fund issue.
The growing interest in the area of ESG, with investors putting particular emphasis on the social aspect, coincides with many countries in the region increasing their Green, Social and Sustainability Debt (GSS) or Green Bond issuance, offering both institutional and retail investors a broader market in which to participate.
To support clients, Mercer has not only integrated sustainable investment products, services, and activities into its advisory and delegated solutions, but also works with them to help them develop their sustainable investment approaches.
Wealth Business Leader for Hong Kong, Adeline Tan explains: “Our approach has been rooted in research, giving clients a multi-dimensional view of possible actions so they are assured that their assessment stands up to scrutiny.”
Mercer also manages ESG strategy for asset owners, with its Sustainable Investment team rating more than 5,000 strategies and producing thought leadership to help improve the credibility of sustainability through a strategy-integration framework.
The newly launched Analytics for Climate Transition (ACT) tool enables clients to assess and rank emission intensity, transition capacity and green revenues in their portfolio. Central to this assessment is a portfolio-wide consideration of the transition capacity to align to a 1.5°C global warming/net zero target. In addition, Mercer helps clients identify next steps and where investments could be allocated in the future in the design of robust and sustainable portfolios.
Alternatives growth
An increased emphasis on ESG is not the only trend Mercer has identified in Asia Pacific for the year ahead. It is also predicting strong growth in private markets, as investors in the region shift more of their allocation to alternatives, attracted by the compelling returns this sector offers.
Mercer has considerable expertise in this area, with its alternatives team in the region consistently deploying capital across private equity and private debt, making it a valuable partner to institutional investors and general partners.
To help investors access this space, it not only offers advisory services, but also provides customised and pooled investment solutions.
“It is critical for clients to be advised on a total portfolio approach in order to not lose sight of opportunities and be able to deploy capital dynamically. That’s how Mercer is positioned,” says Wealth Business Leader for Singapore, Chong Chee Loong.
Customised solutions
Meanwhile, there is also set to be a growing demand for private wealth management solutions, as Asia’s ultra-high-net-worth individuals transfer wealth to the younger generation.
Family offices have boomed in the region, as wealthy individuals grapple with challenges ranging from an ongoing search for yield, to multi-jurisdictional living, through to impact investing.
Working with clients to help create custom solutions that align with their priorities, Mercer helps grow their investments, mitigate risk and reduce costs.
Mercer’s free online FundWatch platform is a key tool that provides investors and their advisors access to forward-looking institutional quality research and ratings based on five key factors, namely idea generation, portfolio construction, implementation, business management and fees.
The group has more than 200 researchers to evaluate these factors to score funds’ prospects using a simple star rating system. They also rate funds on how well they integrate ESG into their investment process.
“We are very grateful for the trust from our clients which keeps us going every day. Mercer is committed to our business in Asia and we look to co-create a better future with our clients and partners across the region,” Li adds.