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Building resilience to protect your portfolio


Investors face a complex challenge, beset with unexpected events. Investors also need to understand their responsibility around managing and mitigating risk, as every decision they make can have consequences. But aside from markets, which investors cannot control, there is much that you can – and by doing so, you can be better prepared to allocate with confidence, no matter what.

Mercer Sentinel is a dedicated specialist team within Mercer Investments focused on advising on operational efficiency; that is, all the non-investment risks associated with investment operations and execution.

Our clients know they can depend on our experience, resources and global reach to help keep their portfolio running securely and cost-effectively.

We know that in uncertain times, investors need to be ready for whatever the future may bring and having an operationally resilient portfolio is a key part of this preparation.

Explore how we can help you be future-ready.

How we can support your organisation

Do your research


Custody is a vital part of an investor’s governance framework. It is much more than just a service to safeguard assets – it underpins everything that happens within a portfolio.

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Asset transitions can expose clients to disruption, inconvenience and significant financial losses if not planned properly due to their time-critical nature, heavy reliance on third parties and sensitivity to many unpredictable factors such as cash payment and trade failures.

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Explore solutions

Operational due diligence

While designing the right strategy is an essential part of meeting investment objectives, ensuring the underlying managers are implementing it correctly is also a vital step of an investor’s journey.

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Meet our experts 

Mitchee Chung

Mitchee Chung

European Director, Mercer Sentinel


Mitchee leads the team at Mercer Sentinel, a specialist global group focused on investment operations including investment manager operational risk assessments, transition coordination/transition manager selection and custodian reviews. Mitchee is a subject matter expert on helping clients assess and improve investment operations across a range of asset classes.



  • Custody

    Our trustees and corporate headquarters require us to review our custodian bank relationship on a periodic basis, usually every 3 years. Do you have a solution that can help us with this?

    Our annual Custodian Capabilities report for each of the global Custodian Banks, provides a review of all the major services used by asset owners. The report makes a comparison across the peer group and ranks each of the service offerings. The Capabilities report along with the Rate Card/Fee review service usually meets the governance needs of asset owners who need to ensure the custody relationship is fit for purpose and competitively priced.

    Securities Lending is something we are considering to generate additional revenue within our fund. Our Custodian Bank has provided us with a proposal however, we are unsure how this compares to the market. Are you able to provide guidance?

    We have been providing views on Securities Lending programs for many years and are able to compare against what we have seen across the providers to ensure you receive an appropriate revenue arrangement.  We are also able to review proposed collateral arrangements, approved borrower lists and an indemnity arrangement to ensure they are reasonable and are in line with your risk appetite.


  • Transitions

    • Transition Coordination

      What are the reasons for managing out of market exposure during transitions? Will our pension scheme be worse off if this risk is not managed?

      Out of market exposure relates to the period of time that assets are not exposed to the markets during transitions and arises primarily due to settlement periods when disinvesting from holdings. Markets could go up or down during the period assets are uninvested, and if markets go up, the pension scheme loses out on the potential ‘gain’ and would also obtain fewer units if investing in a pooled fund. 

      We need to transfer cash from the trustee bank account to an investment manager, this is seemingly a straight-forward transfer but from the team’s experience, what are the operational risks?

      These types of ‘simple’ transfers also require a high level of attention. We have experienced cash proceeds not arriving with the recipient as instructed or incorrect amounts being transferred – these situations require swift action to avoid trade cancellation which would result in out of market exposure. Another example is a trade being placed for an incorrect trade date or value, again which requires action to help correct the trade.

      We are looking to reduce transaction costs during a transition, is that possible?

      Some examples of the ways in which our team look to reduce costs for clients are: undertaking in-specie (stock) transfers or re-registrations, planning transfers around manager rebalancing dates, and phasing transfers for large trades.


    • Transition Management

      We’re about to appoint a transition manager for a complex asset transition, and though we have used transition managers in the past, we find their reports complicated and we are never really sure what questions to ask, or what we should be looking for. Can you help?

      Our team have been advising on transition manager appointments and events for over 20 years. We understand the reporting, and having been involved in hundreds of transitions we know the key issues, and where transition managers are sometimes tempted to take short cuts. We can also assist with the selection of a transition manager if a client is unsure who to appoint. 



  • Operational due diligence

    Given the increased allocations to non-traditional asset classes, can you provide details of your experience in conducting Operational Due Diligence projects on these type of investments?

    45% of the projects we do for investors are in the non-traditional space with around 30% for Private Markets investments and 13% for Hedge Funds. All of our 40 operational risk analysts globally are generalists and are skilled in reviewing all types of managers regardless of asset class, size or complexity.  This is essential to ensure that the operational risks identified are relatively consistent across different regions and investment managers.

    How quickly are you able to provide a report identifying the potential operational risks for an investment we are considering?

    Using our Operational Risk Assessment (ORA) process, we can usually provide a Preliminary report within four weeks of being instructed and the final report to you after five weeks of the Preliminary report being issued. Alternatively, if you are making a Private Markets allocation and have an imminent funding close, we can use our Operational Review process, a desk based high level approach, to provide you with a “red flags” report within three weeks of being instructed.


About us

Mercer Sentinel is the specialist operational risk consulting unit of Mercer Wealth. We help our clients improve operational risk management by meeting challenges across investment processes and controls, asset transitions and custodian relationships.




  • Co-ordination
  • Manager Search
  • Independent Oversight
    3,000 Transitions completedwith average of 250/year over the last 3 years

Operational risk


  • Operational risk assessments (ORA)
  • Operational risk review (ORR)
    1,500+ Operational Risk Reports
    1000+ Manager Reviews 2
    100+ Consulting Projects



  • Monitoring & Health Checks
  • Custodian Searches
  • Proprietary Database
    265 client consulting projects including advising on $750bn in custody assets 3
    1000+ clients

1 Since 2004;  2 Since 2009;  3Since 2014