Mercer Investment Consulting, Inc. (Mercer) announced that it has signed a definitive agreement with Milliman, Inc., to acquire portions of its wholly-owned investment consulting subsidiary, Evaluation Associates LLC. In a related transaction, Callan Associates Inc. will acquire from Evaluation Associates its public sector investment consulting business.
Upon completion, this will be Mercer’s second acquisition of an investment consulting firm in 2011, having completed its acquisition of Hammond Associates effective January 3, 2011. The Evaluation Associates acquisition further strengthens Mercer’s investment consulting in the US, and is an indication of Mercer’s commitment to this business.
The acquisition is expected to close on or near the end of the second quarter of 20111. Terms of the agreement were not disclosed.
Callan adds to its broad base of blue chip public sector clients through the acquisition of Evaluation Associates’ public sector business. By cooperating on this transaction, Mercer and Callan are able to pursue their separate, strategic goals in the investment consulting market. The alliance between Mercer and Callan also helps to ensure that Evaluation Associates’ public sector clients will benefit from a seamless and coordinated management transition.
Evaluation Associates, based in Norwalk, CT, with assets under advisement of approximately $200 billion and 115 clients, ranks as the 17th largest investment consulting firm worldwide.2 Ten of Evaluation Associates’ clients are in the public sector. Mercer has assets under advisement of $3.7 trillion.
“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,” said Jeff Schutes, Mercer’s US investment consulting leader. “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.”
Mr. Schutes added, “Evaluation Associates’ work in the wealth management segment complements the capabilities brought to Mercer by Hammond Associates, which was acquired earlier this year. We feel that this latest acquisition will strengthen our US investment consulting capabilities across important and growing client segments and expands our Defined Benefit (DB) and Defined Contribution (DC) consulting position. It will enable us to leverage Mercer’s global expertise by serving Evaluation Associates’ client base.”
“This deal structure also illustrates Mercer’s willingness to look at a wide-variety of US investment consulting acquisition opportunities,” Mr. Schutes noted. “Our relationship with Callan made it possible to announce the acquisition of this portion of Evaluation Associates’ client base in a coordinated way, and to ensure that all Evaluation Associates clients benefit from a seamless ownership transition.”
1 - Subject to customary approvals and conditions
2 - Source: Greenwich Associates
Mercer is a leading global provider of consulting, outsourcing and investment services. Mercer works with clients to solve their most complex benefit and human capital issues, designing and helping manage health, retirement and other benefits. It is a leader in benefit outsourcing. Mercer’s investment services include investment consulting and multi-manager investment management. Mercer’s more than 20,000 employees are based in more than 40 countries. The company is a wholly owned subsidiary of Marsh & McLennan Companies, Inc., which lists its stock (ticker symbol: MMC) on the New York and Chicago stock exchanges. For more information, visit www.mercer.com.
About Callan Associates
Founded in 1973, Callan Associates is one of the largest independently-owned investment consulting firms in the country. Headquartered in San Francisco, Calif., the firm provides research, education, decision support and advice to a broad array of institutional investors collectively responsible for more than $1 trillion in total assets. Independent and employee-owned, Callan employs more than 155 people and maintains four regional offices located in Denver, Chicago, Atlanta and Florham Park, NJ. For more information, visit www.callan.com.
About Evaluation Associates
Evaluation Associates LLC was founded in 1969 as a division of PaineWebber and launched as an independent investment consulting firm in 1976. It was acquired by Milliman, Inc., in 2004 and is today a wholly-owned subsidiary of Milliman. Based in Norwalk, CT, Evaluation Associates has assets under advisement of approximately $200 billion. Its 115 advisory relationships include defined benefit and defined contribution employee benefit plans, endowments, insurance, wealth management firms, and family trusts. Ten of these are public sector clients. For more information, visit www.evaluationassociates.com.