For an idea of where a business is going, it is always worth looking at new hires. In the past few weeks, Towers Watson took on Peter Lewis as head of its US real estate investment manager research team, while Mercer hired Matthew Abbott as a senior researcher in the UK.

Consultancies seem to be trying to take on multi-managers at their own game. In fact, some have already come out and done it. Russell Investments operates both investment consultancy and multi-manager businesses, for example. Towers Watson has not ruled it out.

The move has less to do with the inherent appeal of the multi-manager model than with investment consultants justifying their fees. "Investment consultants are under pressure to prove they add value," says Jenny Buck, former head of multi-manager at Schroders, who was recently appointed head of property at the Tesco pension scheme.

"There's an element of investment consultants questioning whether fund managers have generated any alpha - and why they don't have a go themselves."

For Buck, the question is whether it can do so without a major conflict of interest. Few investment consultants deny there is one - at least in theory, if they have a product to sell. Adam Calman, head of Europe at The Townsend Group, recently majority-acquired by private equity subsidiary Aligned Asset Management, points out that his firm only invests in third-party vehicles. "We don't have direct property funds," he says. "We never have had, we don't have and we never will have."

Russell Investments has constructed Chinese walls between the multi-manager and consultancy businesses, according to senior investment consultant Lloyd Raynor. If there is an indication that the consultancy client is interested in a multi-manager product, it goes immediately to the sales team, and the adviser withdraws.

"Clients are grown-ups," he says. "There's always a potential conflict of interest. If the adviser is paid on a time-cost basis for manager selection, there will be a built-in bias toward active funds."

Given a clear encroaching trend, the question is whether investment consultants will be any good at it.

According to Paul Jayasingha, senior investment consultant at Towers Watson, there are three significant differentiators - although he stops short of describing them as competitive advantages. The first is that it is easier for consultants to have a negative view of real estate. Whereas multi-managers depend on a positive view, consultants can direct investors toward other strategies.

Second, consultants can look at different forms of real estate exposure. Back in 2009,
for instance, Towers Watson took the listed opportunity to its clients. "Valuations were very attractive, and you didn't need to take the illiquidity risk in unlisted real estate," says Jayasingha. "I don't know of many multi-managers who did the same."

Of course, for multi-managers this is their core business. Graeme Rutter, head of multi-manager at Schroders, says both investment consultants and multi-managers can handle the core fund universe equally well. When it comes to niche or more esoteric products, this is not the case. "We're property experts. This is what we do," he says.