Mercer has finalized an agreement to acquire Vanguard Group's outsourced chief investment officer (OCIO) division.
This move brings Vanguard's Institutional Advisory Services under Mercer's wing, expanding their footprint in the U.S. institutional investment market. Vanguard's OCIO, with $60 billion in assets under advisement, primarily caters to non-profit organizations and other institutional entities.
Details of the acquisition have not been released, as confirmed by a Mercer spokesperson. However, the transaction's significance is underscored by the transition of Vanguard's OCIO team—around 120 professionals—to Mercer as full-time employees. This changeover is slated for completion in the first quarter of 2024.
Vanguard's update highlights that over 1,000 clients, predominantly from the non-profit and pension sectors, will migrate to Mercer as a result of this acquisition. Vanguard's decision reflects a strategic move, acknowledging the evolving complexity of the OCIO landscape and Mercer's strong positioning within this domain. This transition is seen as a step towards enhanced support for Vanguard's OCIO clients and team in the long term.
Marc Cordover, Mercer's U.S. investments and retirement leader, remarked on the synergies this acquisition brings. He emphasized that Vanguard's unique investment approach, its stronghold in the non-profit sector, and client-focused strategy are highly complementary to Mercer's extensive global capabilities in OCIO management and alternative asset classes.
With this acquisition, Mercer, which already advises on $16.45 trillion in global assets, further cements its position as a leader in the investment advisory sector. Meanwhile, Vanguard, managing approximately $7.6 trillion in assets, has yet to comment further on this development.
