Institutional investors are turning to social media to help inform investment decisions and shape conversation around allocations, said a new Greenwich Associates study.
Greenwich Associates said 33% of institutional investors questioned as part of the study initiated discussions with their investment consultant as a result of information obtained on social media.
LinkedIn, Twitter, Facebook and YouTube were used by institutional investors to influence a decision to work with a particular client or company, said 34% of respondents, while 37% said they shared information from these sources with decision-makers at their firms.
Almost half, at 48%, said information from social media had prompted them to look further at an industry issue or topic.
“These results show that social media is influencing decisions that can result in the allocations of billions of investment dollars around the world,” said Dan Connell, head of market structure and technology at Greenwich Associates and author of the study, in a statement accompanying the study.
Overall, foundations and endowments were the biggest consumers of social media, followed by insurance companies, public pension funds and corporate pension funds.
“Corporate pension plans are heavily regulated institutions and, as such, may have more stringent policies related to social media usage,” the study said. “Conversely, endowments — many of which are run by large universities — have taken a leading position in researching and interacting with asset managers via social sites.”
The study, Institutional Investing in the Digital Age: How Social Media Informs and Shapes the Investing Process, questioned 256 corporate and public pension funds, insurance companies, endowments and foundations in the U.S., Europe and Asia. Portfolio size ranged from less than $250 million to more than $10 billion in assets.
