Named largest global manager-of-managers by Cerull
New report shows Aust/NZ third largest market for manager-of-managers products, Russell global leader
Frank Russell Company named largest global manager-of-managers by Cerulli Associates
a.. Russell holds 26% share of US$260 billion global market and 34% share of non-US manager-of-managers assets. b.. Australia/New Zealand world’s third largest marketplace for multi-manager products. 7 August 2002 - Frank Russell Company, a global leader in multi-manager investment services, has been named the largest global manager-of-managers in Cerulli Associates’ July 2002 report, The International Multimanager Marketplace.
The Cerulli Report™ is based on total assets under management as of 31 December 2001, as gathered from 19 manager-of-managers firms.
According to the report, Russell currently holds a 26% share of the US$260 billion global manager-of-managers market.
The report also states that the combined Australia and New Zealand marketplace is the world’s third largest for multi-manager products.
The Cerulli Report™ states that "multi-manager products [including fund-of-funds] are one of the fastest-growing sub segments of the asset management industry." In addition, it says that multi-manager assets under management globally totalled US$489 billion at year end 2001 and have grown at a compound annual growth rate (CAGR) of 15% since year end 1999. According to the report, "over the same period, mutual fund assets worldwide were nearly flat; and the global asset management industry grew at a stunted 3% CAGR."
"The strong growth in the multi-manager segment in the past three years is not surprising," said Mike Phillips, chairman and CEO of Frank Russell Company. "The market environment has taught some tough lessons about risk and strategic diversification to individual and institutional investors alike. Investors everywhere are realising that having a single investment manager run your money is as strange as having a single stock in your portfolio."
Russell’s global assets under management have grown more than 50% in the last three years, from US$45.6 billion at the end of 1998 to US$70 billion as of March 2002. According to Craig Ueland, COO of Frank Russell Company, the firm’s ongoing success in the multi-manager space is due to three important differentiators: "We have a 30 year history of researching and evaluating money managers which is very difficult for anyone to replicate; we have more resources dedicated to manager research than any other firm in the multi-manager space; and we deploy these resources on the ground, globally," he said.
In recent years, Russell has expanded its global array of multi-manager investment programs by developing business alliances with leading financial services organisations in major markets around the world.
Besides expanding globally, Russell also has broadened its original focus on corporate pension plans to include service to endowments and foundations, investment advisors, banks, brokers and other service organisations. During the past year, this expansion included a US-based separate accounts programme (Russell Managed Portfolios™) with Fidelity Investments Institutional Brokerage Group, and a co-branded individual investor program with Scottish Widows in the UK.
Russell Holds 34% Share of Non-US Manager-of-Managers Market
According to The Cerulli Report™, non-US assets in manager-of-managers vehicles have grown at a four-year CAGR of 43%. The report states that Russell currently has a 34% share of non-US manager-of-managers assets.
Other highlights from the report include:
a.. Australia/New Zealand: "Australia and New Zealand represent the world’s third largest marketplace for multi-manager products….Multi-manager assets represent well over 10% of Australia’s managed fund industry, one of the highest such proportions in the world." According to the report, Russell is Australia’s second largest manager-of-manager after local firm MLC. b.. Japan: Russell manages "the bulk of manager-of-managers products in Japan, leveraging its position as one of the larger consultants to Japanese pensions funds." c.. Continental Europe: "Continental Europe represents the primary engine for growth" in the multi-manager space, with the French, German, Italian and Spanish multi-manager industries each expected to grow by more than 20% per annum through 2007. Russell is credited with being "largely responsible for promoting the manager-of-managers approach in Europe and helping to educate investors." d.. United Kingdom: Russell "leads the manager-of-managers market with a 58% share…" "Our multi-manager investment discipline has been received with open arms in many markets because the need to address risk with careful, objective diversification is universal, regardless of geography, investor type or size," said Len Brennan, managing director of Russell’s international operations. "Our goal has been to develop alliances that allow investors to have both our multi-manager investment approach and a high degree of effective service. It’s that combination that wins market share."
Frank Russell Company, a global investment services firm, provides multi-manager investment products and services in more than 35 countries, and has been researching money managers for more than 30 years. Worldwide, Russell manages over NZ$149 billion in assets and advises clients representing approximately NZ$3.0 trillion worldwide. In New Zealand, In New Zealand, Frank Russell Company (N.Z.) Limited advises on more than NZ$14 billion in assets, and invests around NZ$1.3 billion for New Zealand investors in Russell Funds. Founded in 1936, Russell is a subsidiary of Northwestern Mutual and is headquartered in Tacoma, Washington, USA with additional offices in New York, Toronto, London, Paris, Amsterdam, Singapore, Sydney, Auckland, Tokyo and Johannesburg. For more information go to www.russell.com