Communications in Asset Management Has Changed – Have You?
Globalization meets social media in the asset management world.
The traditional ways of finding an investor or an investor finding a fund manager are rapidly changing in the asset management world. In the past, investor and fund manager introductions were strictly controlled. Managers sought out intermediaries such as capital introduction teams at banks or third party marketers with a prized Rolodex of investors. Or they looked to meet at private, invitation-only events. Online communications via website were muted, if existent at all. The process was opaque and mysterious.
At the start of 2020 that model has imploded. Brand perception is pushing ahead of performance as a reason why investors choose to engage with a particular manager – a massive change from when brand took a backseat in the industry due to regulation.
And where an investor finds a manager has evolved. According to a survey last year by Greenwich Associates, institutional investors are increasingly preferring social media to more traditional media for connecting with individuals, engaging in group discussions and doing firm-specific research on asset managers.
According to the survey, 68% of investors used social media to research asset management firms in 2018, up from 36% in the investment consulting firm’s 2015 study. In addition, 63% of survey respondents said they used social media to connect with their peers, vs. 25% three years ago.
Adding another layer to this insight is how that communication is taking place. In its 2020 State of the Union released this week, Jefferies Capital Introduction teams estimates there are thousands of hedge fund investors across the globe. “Managers are increasingly realizing it can help to put a face with a firm, or a voice to a strategy. Whether videos, podcasts, webcasts, idea days or other differentiated mediums, hedge fund managers are working to more succinctly and compellingly explain their value proposition.”
The report stated that “More than 10% of the Billion Dollar Club (those firms managing more than $1 billion of assets) have content focused marketing efforts, and while it may be easy to say those are precisely the firms with enough resources to do so, Jefferies estimates nearly twice that of emerging managers are exploring various new mediums to connect with stakeholders beyond traditional PDFs and PowerPoints.”
With the rules of the game changing, this is a terrific opportunity for asset managers to deploy new communications mediums to help build brand and communicate their value proposition to investors.