Cogent: Bridgewater, Vanguard, PIMCO get highest rating from institutional investors
Others scoring high include Pyramis, Franklin Templeton, Oaktree
By Rick Baert | March 6, 2013 3:53 pm
Bridgewater Associates LP, Vanguard Group Inc. and Pacific Investment Management Co. received the highest overall satisfaction rating among their institutional clients in 2012, according to the results of an annual survey by Cogent Research.
Eighty-five percent of Bridgewater's clients said they were “very to extremely satisfied,” with 81% for Vanguard and 80% for PIMCO, according to a Cogent report on the survey, U.S. Institutional Investor Brandscape. Other parts of the Brandscape survey were released earlier this year.
For 2012, six other managers received “very to extremely satisfied” levels higher than the 60% industry average. They are Pyramis Global Advisors, 67%; Franklin Templeton (BEN) Investments (BEN), 66%; Oaktree Capital Management (OAK) LP (OAK), 65%; MFS Investment Management, 63%; Loomis, Sayles & Co. LP, 62%; and American Funds, 61%.
Vanguard and Franklin Templeton had the highest increases in satisfaction ratings from a year earlier, when their satisfaction levels were at 67% and 42%, respectively, said Linda York, Boston-based practice director for syndicated research at Cogent and an author of the report.
Vanguard showed improvement in satisfaction among clients in performance and organizational stability from 2011, while Franklin Templeton gained in all 15 attributes measured by Cogent, Ms. York said.
Bridgewater and PIMCO were in the top three in 2011; UBS, which was third in 2011, fell just below the 60% industry average in the current survey, Ms. York said; she would not elaborate.
Overall, the 60% industry satisfaction level is up two percentage points from 2011, which Ms. York said shows there's “positive momentum” in investor satisfaction with money managers.
However, not all was rosy. Eight of nine attributes Cogent measured in its three previous annual surveys saw declines in 2012 when compared to 2010, and one — relationship management — had declines in all three surveys since 2010. The category had a 47% satisfaction percentage in 2012, 49% in 2011 and 57% in 2010. Additionally, eight of the 15 overall attributes in 2012 failed to reach an average satisfaction level of 50%.
Attributes with the highest satisfaction levels in 2012 were: organizational stability and financial strength, both at 61%; investment philosophy, 58%; and integrity and transparency, 56%. All were above their percentages from the previous year, although stability and philosophy received higher percentages in 2010.
Investment performance was at 51%, up from 46% in 2011 but down from 58% in 2010.
Attributes with the lowest satisfaction in 2012 were social responsibility, at 26%; product innovation, 36%; and fee/fee structure at 42%. Innovation percentages were 35% in 2011 and 44% in 2010; while fees were at 42% in 2011 and 47% in 2010. Social responsibility was a new category in 2012.
“Institutions utilize an average of 15 asset managers concurrently, thus they have ample opportunity to compare and contrast their experiences,” Ms. York said in an e-mail. “While the leading broad managers are successfully maintaining strong client satisfaction overall, there are substantial gaps in satisfaction levels between the leaders and laggards on many key experience attributes, suggesting the need for many firms to investigate and adopt industry best practices in order to deepen their client relationships.”
The online survey was conducted Sept. 20 to Nov. 8 among those who play a direct role in selecting money managers at 650 institutions each with $20 million or more in assets.
The full report is available on the Cogent website.