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Mercer wins sovereign wealth fund mandate

Mercer is the recipient of a sovereign wealth fund's first implemented consulting mandate.

The Tuvalu Trust Fund has appointed Mercer for asset consulting, portfolio implementation services and investment implementation services.

Mercer will provide portfolio implementation services and serve as asset consultant for the fund's $200 million portfolio, while it the investment implementation component relates to three additional funds overseen by the board of the Tuvalu Trust Fund. These are the Consolidated Investment Fund, Climate Change and Disaster Survival Fund, and the Felakaupule Trust Fund.

The aim of the mandates is to strengthen the fund's long-term viability and capacity as a reliable source of revenue for the island nation. They also reflect the growing maturity of the fund which has grown significantly in the last decade, Tuvalu Trust Fund board and minister of finance Seve Paeniu said.

"Mercer's multi-manager approach allows us access to best-in-class managers, as well as a broad range of investment styles and asset classes, while ensuring alignment with our investment beliefs. Diversification in these factors allows us to take full advantage of the long-term nature of the fund to improve returns without the cost of additional risk," he said.

The integration of ESG factors is particularly important given Tuvalu is especially susceptible to the adverse impacts of climate change, he noted.

"By outsourcing our investment implementation to Mercer, we can stay true to our investment purpose, beliefs and objectives, leaving resource intensive tasks to those that have specialist capabilities," Paeniu said.

"We look forward to working with the Mercer team to take the fund from strength to strength, ensuring its sustainability for future generations."

Also commenting, Mercer Pacific head of investment solutions Craig Hughes said this is just the latest in an increasing number of asset owners turning to implemented consulting.

Managing a portfolio in the current economic climate is becoming increasingly complex and requires a certain level of knowledge and scale to be successful and sustainable, he said.

"More and more, we are seeing clients come to us to outsource their investment needs for this access and expertise. It is contributing to a reduction in their overall costs and allowing them to focus on the many other challenges facing their organisations," Hughes said.

"We're delighted to be partnering with the Tuvalu Trust Fund to strengthen the sustainability of the Fund and support the prosperity of the people of Tuvalu."

Read more: MercerTuvalu Trust FundConsolidated Investment FundCraig HughesSeve PaeniuFelakaupule Trust FundMercer Pacific