Mercer to Acquire Hammond Associates, Significantly Strengthening Its US Investment Consulting Position for Endowments and Foundations

• Acquisition creates a new leader in investment consulting for endowments, foundations and the private wealth and health care markets
• Transaction expands Mercer’s capabilities in alternatives investment
• Mercer’s international research capabilities complement Hammond’s US expertise

NEW YORK--(BUSINESS WIRE)-- Mercer announced today that it has signed a definitive agreement to acquire Hammond Associates, creating a new leader in investment consulting for endowments, foundations and the private wealth and health care markets. Upon completion of the transaction, Mercer will build upon Hammond’s position as the third largest investment consulting firm serving endowments and foundations in the US. The acquisition further enhances Mercer’s alternative research and investment capabilities and provides additional consulting opportunities in the private wealth and health care markets.

The acquisition of Hammond strengthens Mercer’s position in one of the fastest-growing segments of investment consulting in the US. In the period 2005 to 2009, endowment and foundation funds using investment consulting services grew at a compound rate of 10% annually, compared to a 5% annual rate of growth for both corporate and public funds in the US¹.

The transaction is expected to close at the end of 2010². Terms of the agreement were not disclosed.

“Our announcement is tangible evidence of Mercer’s commitment to our investment business and our determination to increase our US market share,” said M. Michele Burns, Chairman and Chief Executive Officer of Mercer. “Hammond is one of the three leading investment consulting firms serving endowments and foundations in the United States, and this acquisition clearly strengthens Mercer’s ability to serve this attractive client base. Mercer’s international research capabilities complement Hammond’s domestic expertise, which we believe provides additional growth opportunities. We foresee many global opportunities for cross-fertilization of expertise that will be beneficial to our clients and consultants.”

“Hammond has been a leader in investment consulting for endowments and foundations for 25 years, and more recently has invested in its hedge fund and alternatives research capabilities, complementing the investment Mercer has made in this area,” said Jeff Schutes, Mercer’s US Investment Consulting Leader. “In the current challenging investment market, we believe combining our resources will significantly improve our ability to help clients make informed, sound and strategic investment decisions.”

“We believe that Hammond’s US endowment and foundation clients will benefit from Mercer’s work not only with endowments and foundations worldwide, but also with the insights we have developed in working with a range of institutional investors worldwide,” said Mr. Schutes. “Many of these investors share the characteristics of long-term investment objectives and limited short-term obligations, allowing them to consider investments in alternatives and other opportunities that offer less liquidity but potentially higher returns. Other advantages that will benefit clients include a deeper capital pool to fund initiatives such as technology and reporting improvements, and risk management analysis expertise to augment Hammond’s knowledge in this area and make additional risk management tools available.”

“We sincerely believe our clients will benefit from the experience, resources and global reach that result from this combination, which will result in a substantial increase in manager search and due diligence capabilities, including both traditional and alternative managers,” said Dennis Hammond, CEO and Founder of Hammond Associates. “Hammond’s client commitment and insights into the needs of endowments, foundations, and the private wealth and health care markets will be supplemented by the global reach, professionalism and resources of Mercer. Both Mercer and Hammond have similar values and share a commitment to excellence.”

¹Source: Greenwich Associates
²Subject to customary approvals and conditions

About Hammond Associates

Hammond Associates, founded in 1985 and based in St. Louis, Mo., is one of the nation’s foremost institutional fund consultants. With more than 200 clients, it is the third largest investment consulting firm in the US focused on endowment and foundation clients. Its more than 120 investment professionals include former chief investment officers, academicians, researchers, management consultants and corporate financial executives.

About Mercer

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, Chicago and London stock exchanges. For more information, visit www.mercer.com.

MercerCharles Salmans, 212-345-4512
[email protected]

Source: Mercer