Marsh Company Takes Larger Step into Investment Consulting

Mercer, a wholly owned subsidiary of Marsh & McLennan Cos. Inc., has signed a definitive agreement to merge its investment consulting business with Callan Associates, the company reports. The acquisition will create one of the largest investment consulting businesses in the United States, analysts say.

The transaction is expected to close near the end of the first quarter of 2009. Terms of the agreement were not disclosed. Marsh is known for its insurance brokerage, and Mercer already owns Celent, an analyst firm that focuses on financial services and insurance.

“Clearly, this combination will position Mercer as one of the top U.S. leaders in investment consulting,” says M. Michele Burns, chairman and CEO of Mercer. “Callan’s solid U.S. presence complements our U.S. investment consulting strength, along with our strong positions in Canada, Europe and Asia Pacific. This transaction demonstrates Mercer’s commitment to invest in businesses that provide long-term strategic growth and in high-quality investment consulting services that benefit clients.”

While Mercer’s investment consulting business will be well positioned for future growth, providing top-tier service to clients remains first and foremost the objective of the merged business, said the company said in a statement.

“Callan has been a leader in the investment consulting industry for over 35 years in the United States and by combining forces with Mercer, a global leader, we can offer clients a wider range of tools and resources, top-notch professional advice and enhanced research, educational and quantitative services,” says Ronald Peyton, chairman and CEO of Callan Associates.

“With approximately 1,100 investment consulting employees in 41 offices around the world, Mercer will have the resources to offer clients customized guidance at every stage of the investment decision, risk management and investment monitoring process,” says Andrew Kirton, global head of Mercer's investment consulting business. “Our clients will have access to leading intellectual capital, deep and broad-based manager research, and the most committed and experienced consultants in the industry.”

Callan Associates currently has U.S. offices in San Francisco, Atlanta, Denver, Chicago and Florham Park, N.J., and the combined business will continue to have a presence in those cities in conjunction with Mercer’s U.S. investment consulting offices in New York, Atlanta, Boston, Chicago, Dallas, Los Angeles, Philadelphia, Princeton, Richmond, San Francisco, Seattle and Washington, D.C.

“Both Callan and Mercer have similar business models, cultures and values, and share a commitment to excellence,” says Jeff Schutes, Mercer’s U.S. investment consulting leader. “In the current challenging investment environment, we believe combining our resources will significantly improve our ability to help clients make informed, sound and strategic investment decisions.”