Mercer has signed a definitive agreement to acquire Hammond Associates, the third largest investment consulting firm in the US focused on endowment and foundation clients.

The acquisition strengthens Mercer’s position in one of the fastest-growing segments of investment consulting in the US. In the period 2005 to 2009, endowment and foundation funds using investment consulting services grew at a compound rate of 10 per cent annually, the company said.

“Hammond is one of the three leading investment consulting firms serving endowments and foundations in the United States, and this acquisition clearly strengthens Mercer’s ability to serve this attractive client base,” M. Michele Burns, chairman and chief executive officer of Mercer said.

“Hammond’s client commitment and insights into the needs of endowments, foundations, and the private wealth and health care markets will be supplemented by the global reach, professionalism and resources of Mercer," said Dennis Hammond, chief executive and founder of Hammond.

The transaction is expected to close at the end of 2010. Terms of the agreement were not disclosed.