Merger Ahead for Pension Consultancy

Terry Flanagan

Global institutional consultancy Mercer expands, this time, through Norway’s prized firm.

With 150 offices in 42 countries, Mercer, an investment consultancy for primarily pensions, has quite a wide net of global clients. On January 27, the firm announced its plans to acquire Pensjon & Finans, a Norwegian-based pension consultancy which has a client base of both public and private institutions. Mercer already has a Nordic division, and the acquisition is aimed at boosting its local presence.

Norwegian pensions, which range from state, occupational, or personal/individual, are required to be fully funded based on their actuarial liabilities at all times, according to Mercer spokesperson Nicoali Berg, head of Mercer’s Nordic investments business.

Anyone familiar with the pension industry knows that in the U.S., a funded status could be farther from the truth for the average fund, as one in five funds are reportedly lacking what they need to fulfill obligations to beneficiaries. According to Mercer’s analysis, pension funding for the U.S. S&P 1500 companies stood at 75% as of December 31 last year.

Terms of the merger were not disclosed, and the closing of the transaction is still undergoing regulatory approval.

The merger is aimed at providing Pensjon & Finans broad exposure to Mercer wide range of clients and services. Espen Klow, the chief executive of Pensjon & Finans, will become head of Mercer investment consulting in Norway once the acquisition is finalized. Caspar Holter, founder of Pensjon & Finans will also continue at Mercer.

The region’s largest public pension, also considered a sovereign wealth fund, the Government Pension of Norway, is Europe’s largest pension and significantly bigger in assets at 573 billion versus the U.S.’ largest pension, the California public employees retirement system (CalPERS), at 226 billion.

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