Thought leadership has taken on new importance as institutional investors try to make sense of a vertiginous new world of volatile markets, an unsteady global economy and a proliferation of investment strategies.
“Increasingly, clients are looking not only for products but for ideas about how to use them; they're looking for intellectual capital,” said Benjamin F. Phillips, partner at Casey, Quirk & Associates LLC, Darien, Conn., a consultant to money managers. “That becomes particularly relevant because increasingly, as demand changes among investors, they're looking for innovative products (without established track records). Firms that do this well are able to fill products without track records.”
In addition to helping managers introduce new investment capabilities, thought leadership helps introduce firms to clients in new markets.
“If you're looking to break into new areas, it's a way of showing a) the resources you're devoting to it, and b) your understanding of the opportunity set,” said Divyesh Hindocha, global director of consulting at Mercer in London.
For example, London-based mangers Baring Asset Management Ltd. and Schroder Investment Management Ltd., both known to U.S. institutional investors primarily for their international and global equity capabilities, are trying to build their multiasset businesses in the U.S. And they've kicked off thought leadership marketing programs in the past year to do so.
“You can take your expertise and franchise you have established in one (geographical region) and extend that into another. It's not a short exercise, but you can do that,” said Ian Pascal, director and head of marketing and communications at Baring Asset Management.
Schroders has planned a series of white papers and corresponding round tables with U.S. and Canadian investors over the next 18 months. “They want to see you because you have something interesting to say,” said Nicolaas Marais, head of multiasset and portfolio solutions at Schroders. “At some point, someone is going to say, "So what should I do about it?'” and that's when there might be a commercial payoff for Schroders.