Mercer Investment Consulting (Mercer IC)has reached a deal with the HFR group of companies, by which Mercer IC and its clients will have access to research on single-strategy transparent hedge funds provided by Hedge Fund Research, Inc. (HFR).
HFR’s proprietary database includes information on more than 5,500 funds. A team of 11 HFR researchers performs formal qualitative due diligence on several hundred of these funds.
“Mercer Investment Consulting’s leading presence in institutional investment consulting, both in the US and globally, makes this alignment attractive to us,” says Joseph G. Nicholas, founder and chairman of HFR. “This will help us expand our approach to transparent hedge fund investing among pension plan sponsors, foundations, and endowments.”
According to Tim Gardener, global business leader for Mercer IC, the deal enables Mercer to get to identify opportunities more quickly than doing the due diligence itself. “Our agreement with HFR will help us identify opportunities more quickly based on a combination of our proprietary research complemented by HFR’s analysis, which includes position-level transparency and daily risk management on a large number of individual hedge funds,” he says. “Access to HFR’s research is a good complement to the in-house efforts of our own 44 full-time manager researchers.”
According to Divyesh Hindocha, global director of consulting for Mercer IC, the trend towards increased investment by institutions in single-strategy hedge funds rather than funds of funds is accelerating. It is, he says, “a function of their desire to capture returns from active management. They also recognize the difficulty of capturing value added through traditional long-only investment management. Leading hedge fund managers are exhibiting greater willingness to accept guidelines aimed at ensuring appropriate transparency and risk control. Gaining access to HFR’s research will substantially enhance our ability to meet our clients’ needs.”
THe Chicago-based HFR group of companies, founded in 1993, includes Hedge Fund Research, Inc. and HFR Asset Management LLC. Hedge Fund Research produces the HFR Database, a source of hedge fund performance and information. HFR also distributes the HFRI Monthly Performance Indices – benchmarks for the hedge fund industry. HFR Asset Management is an SEC Registered Investment Adviser that offers active, index and custom hedge fund of funds products.