“Brand equity” doesn't stop at the soft-drink machine. Like Coca-Cola and Pepsi, money managers benefit from having strong brands, bolstered by intangibles such as reputations for “thought leadership,” according to Cogent Research.
A recent Cogent survey of 590 institutional investors found Pacific Investment Management Co. LLC, Vanguard Group Inc. and BlackRock Inc. boasted the strongest “brand equity” among institutional investors. That “equity” is key to gaining assets at a time when a growing number of money managers are fighting over a diminishing pool of defined benefit plan dollars, said Christy White, principal of Cambridge, Mass.-based Cogent Research.
Rounding out the top 10 “brands” among 38 managers included in the study were T. Rowe Price Associates, Goldman Sachs Asset Management, J.P. Morgan Asset Management, Morgan Stanley Investment Management, Janus Capital, Dodge & Cox and Franklin Templeton Investments.
The Cogent analysis of the survey results concluded that while solid investment performance over time gains managers a seat at the table, relatively subjective attributes — such as “thought leadership” and other reputational issues — can factor into institutional investor decisions to hire or retain money managers as well.
It's a stretch to say a strong brand will allow a manager to pick up new customers during a period of rough performance, but brand equity comes into play when it comes to retaining existing clients at such times, Ms. White noted.
At the end of the day, decision-makers with pension funds or other institutional asset pools “are people too,” and having a “brand halo” works in a money manager's favor, she said.