Consolidation within the outsourced chief investment officer continues, with the biggest among them looking to get even bigger. Roughly a year after significantly augmenting its scale by taking over Vanguard’s OCIO business, Mercer is buying the $35 billion investment firm SECOR Asset Management. Terms of the deal — which is expected to close next quarter — were not disclosed.
Founded in 2010 by Tony Kao and Ray Iwanowski, SECOR offers large global institutional investors investment advisory, risk management and customized multi-asset and quantitative investment strategies. SECOR had nearly $14 billion in assets under advisement and $21.5 billion in assets under management as of September 30, 2024. Once the deal closes, SECOR’s more than 40-person team will join Mercer.
Mercer’s Wealth President Michael Dempsey praised SECOR’s team for its “extensive experience working with” big investors’ “in-house investment teams,” adding that the acquisition was part of Mercer’s plan to “continue developing a comprehensive and agile suite of solutions designed for the distinct needs of institutional investors.”
Kao said SECOR’s “clients will benefit from access to Mercer’s extensive global resources,” before adding: “Having served as both an in-house chief investment officer and a partner to clients, I believe that Mercer is the ideal steward for our business’s future.”
Mercer has been aggressively growing its OCIO business, having recently acquired Vanguard’s U.S.-based OCIO shop. Buying SECOR also comes as Mercer takes on more institutional clients.
Mercer’s pursuit of scale is part of an industry-wide search for growth through acquisitions, as demonstrated by such recent deals as Hightower buying into NEPC and Cerity Partners merging with Agility. This consolidation is expected to drive continued growth, with Cerulli Associates forecasting OCIO providers to manage $4.2 trillion in assets by 2028.
Alpha Capital Management’s Brad Alford recently told Institutional Investor that OCIOs are “one of the most profitable and scalable businesses” he’s seen, hence private equity firms “buying OCIOs as fast as they can.”
