‘Mission-oriented’ investors help push Mercer to record fundraise

The firm has nearly doubled the size of its flagship private markets fund, helped by its impact investing sleeve and newly added diversity-focused strategy.

Mercer Investments raised more than $190 million for two impact strategies as part of the firm’s recently closed flagship fund.

Mercer’s Private Investment Partners VI collected $4.8 billion from institutional investors seeking protection from the risk of inflation through an investment strategy offering exposure to an array of private markets strategies, according to a statement from the firm. LPs seeking a “hedge against potential inflation” as well as new “mission-oriented” investors led PIP VI to be nearly double the size of Mercer’s $2.7 billion predecessor vehicle, the statement said.

The fund is structured to invest “across a wide spectrum of private markets opportunities”, allowing investors to “tailor their investment strategies”, the statement said.

“Inflation is at our heels and there’s a real concern that public markets returns are not sustainable,” Raelan Lambert, Mercer’s global head of alternatives, told New Private Markets in an interview. “Because of that, you’re seeing tailwinds from investors seeking to increase allocations to alternatives strategies.”

For the first time, Mercer raised capital for a strategy focused on investing in women and diverse-owned managers. “The Leap strategy was launched in the US to help fill the capital dislocation within private markets for women and diverse-owned or led GPs,” Lambert said.

Mercer’s sustainable investing strategy has been part of the PIP series since Fund IV and backs assets “expected to benefit from long-term secular trends in climate change, energy efficiency, scarcity of natural resources and related environmental factors,” Lambert said.  She added that the firm plans to expand to also include social impact investments.

Mercer, a division of the insurance company Marsh McLennan, manages over $25 billion in alternatives assets and provides advisory services for more than $164 billion committed to alternatives strategies. The firm’s investor base for PIP includes pension funds, endowments and foundations, and insurance companies from Africa, Asia-Pacific, Europe and North America.