Q

What are multi-country investment solutions from Mercer?

A

Companies operating across a variety of jurisdictions need a strong governance framework with streamlined processes to remain efficient and consistent while also pursuing value for pension plan participants. They also need help to ensure risks within investment portfolios are carefully managed. Through our multi-country Investment Solutions structure, we help our clients operate efficient and resilient pension arrangements for their employees all around the world.

We developed these capabilities as a complete governance framework to enable multinational companies stay on top of their global pension investment strategy. Our framework helps clients to achieve economies of scale benefits while also managing the inherent complexity within each country. Our on-the-ground teams help clients at a local level while drawing on our global capabilities to design a tailored approach to their specific challenges.

We believe our heritage in investment consulting means companies who entrust their pension arrangements to Mercer know their portfolios are being managed by teams who understand local regulatory themes, global investment trends and our best practice. Our systems streamline investment, portfolio and risk management processes, while our robust governance framework can be applied to any business of any scale by our global clients.

Q

How do Multi-Country Flexible Investment Solutions add value to our multinational clients?

A

Our framework helps enable companies to manage their pension assets and benefits systems with confidence and consistency. It helps them navigate uncertainty and leverage their global scale, all while knowing their portfolio is being overseen by trusted specialists. Although we can offer a complete or end-to-end governance framework, we have developed a flexible model that empowers our clients to use only the services they need to keep their objectives in focus. We believe our modular framework is a critical potential advantage for multinational clients as we can customize our delivery model and level of service to their exact requirements.

Through our collaborative, flexible approach, we work with our clients to set specific objectives, allowing them to collaborate with Mercer for as much of the strategy and processes as they feel comfortable. Some clients want help with operational execution, monitoring and reporting, while others need asset allocation and manager selection guidance. Those who require significant investment support task us with dynamically managing their portfolios, meaning we can automatically adjust strategies and instruments – always within their own tolerances – when we see opportunities or threats arising. Clients can be as “hands on” monitoring their portfolio as they like, and we also produce timely company-wide reports to keep them up to date.

Q

How does the platform work operationally?

A

We have purposely built a globally consistent operational structure that streamlines processes and harnesses the power of our diverse intellectual capital and research. Hundreds of us at Mercer, using specially developed tools and processes, work to help ensure each client remains on track to meet their own target objectives, no matter what happens in global markets. We also help our clients leverage their own scale and global presence, with the aim of cutting costs and streamlining their operations. 

For clients who delegate portfolio management to us, our investment strategists and asset allocation professionals seek to identify where they can add crucial value. They draw on our vast research capability to select highly rated managers to implement the most appropriate approach through a streamlined onboarding process.

To help enable efficient execution of investment decisions and tactical changes, Mercer has a dedicated operational implementation team supporting the delivery of our solutions to multinational clients. Through our platform, this team facilitates day-to-day operational needs, such as assisting with portfolio paperwork, managing liquidity, reporting and rebalancing. We closely monitor every client portfolio – from changes in funding level and shifts in asset allocation, to currency and interest rate hedging – considering their specific regulatory requirements and investment philosophies, while bringing them the global visibility they need.

Q

How would this work for a new multinational client?

A

As a multinational company, we understand the challenges you face – they are our challenges too – and we appreciate how varied your needs can be. We believe our platform enables companies to enhance their global visibility, proactively manage regulatory complexity and oversee risk, return and funding level changes. We collaborate with each client to create a tailored framework, considering their long-term goals and shorter-term pressures. We know things can change quickly, so have drawn on our experience to build a service model that can flex over time.

Q

Can Multi-Country Flexible Investment Solutions reduce overall costs for multinational clients?

A

Over the past 15 years, we have built the largest Investment Solutions business in the world, managing more than $380bn for more than 1,000 clients[WT1] . In 2019 and 2020, CIO magazine’s independent survey confirmed that we managed the most discretionary delegated assets among our peers¹. But it is not all about size – it’s about what we can do for you with it, too.

Thanks to our market position, we negotiate with fund managers and other providers from a position of strength, passing on potential savings we secure directly and transparently to our clients. Furthermore, depending on asset class, given our global influence, we can often secure access to highly-rated managers with capacity constraints.

_{¹ Source: Chief Investment Officer (ai-cio.com), full discretionary delegated assets under management (AUM) ranked by worldwide assets under advisement [WT2] as of 09/30/2020 as reported by each firm to CIO. Mercer did not pay a fee to participate in this survey. This survey is not indicative of the advisor’s future performance. Please see Important Notices for important information about assets under management.}

Q

Is this service suitable for all multinational companies?

A

It is important to look closely at your company’s circumstances before engaging an investment solution, as not every offering will be suitable for your unique business model and structure.

If your company sponsors multiple defined benefit pension plans in different countries with at least $1.0bn in total assets under management between them, you may be suited to a multi-country investment solution. If you have just completed a merger or acquisition resulting in new retirement plans to monitor and cater for, Mercer’s investment solutions can help you gain a full understanding of the asset and liability profiles of each plan and how it affects your global pension and benefit packages and responsibilities. Collaborating with a pension and investment professional such as Mercer can also help you identify risks posed by the newly acquired plans and opportunities for efficiencies and potential cost savings – and help achieve consistency across global retirement benefit operations.