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5 Fascinating Observations on Institutional Marketing Fails

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Michael Maduell

Michael Maduell, President, Sovereign Wealth Fund Institute

I stand at the helm of the Sovereign Wealth Fund Institute, a media and information company on sovereign wealth funds, public pensions, superannuation funds and central banks. Often, I hear frustrations from asset management executives when it relates to raising capital and marketing to asset owners like sovereign funds.

Below are 5 brief observations that I have witnessed in institutional marketing fails.

1. Deficient Marketing Strategy and Capabilities
By peering on the biography page of a fund managers’ website, in some cases a number of professionals have MBAs, yet it seems many skated through marketing class. The reality is that a solid number of asset managers do not have a dedicated marketing professional who has finesse to grasp the institutional landscape. Filling out RFPs is not marketing a strategy. Paying placement agents or third-party marketers can work, but it is expensive (eating the fee) and can bring on a set of legal risks.

Another observation is the posting of white papers on company websites (aka blackhole). Most asset managers have anemic online traffic compared to financial media portals – who is going to read it? Currently, the majority of asset managers are deficient in effective content marketing distribution and tactics. Utilizing a proper financial media distribution channel is paramount to sharing one’s research to the right audience.

2. Lack of Brand Professionalism and Commitment
After hearing a story about an asset manager, the first thing a potential client will do is probably “google” the company. What shall they find?

The year is 2014 and still – a good number of assets managers lack a professional looking website, or even a website presence at all. Some investment consultants believe that maintaining a functional website is a fantastic way to be transparent and forthcoming to one’s client.

How can one expect to raise billions in capital (globally), if one cannot tell their story and proposition to the world?

3. Popular Kid Syndrome
The institutional investment business is a relationship intensive segment compared to other investor classes. Occasionally I encounter meetings where an investment executive tells me, he or she has all the connections in the public investor world. I then ask, “Why are we talking then?”

A short pause…..

Executive resumes speaking, “we want to network with public pensions and sovereign wealth funds.”

Managing global institutional investor relationships is an ongoing, complex process. Usually, public institutional investors are looking for long-term partners, especially in terms of thought leadership.

4. Improper Investor Targeting
The majority of U.S. asset managers heavily rely on U.S. public pensions or defined contribution plans. This is a no brainer as the United States is the country with the most retirement assets. For defined contribution, many plans select the brand name asset managers, popular funds or ETFs as potential choices. From a business standpoint, one of the fastest growing investor segments is sovereign wealth funds compared to U.S. public pensions which possess a slower growth rate.

>> Today sovereign funds stand at over US$ 6.3 trillion in assets.

Investor Assets

2012 Figures Billions USD
Total US Pension Assets 16,851
Total SWF Assets 5,198
Total UK Pension Assets 2,736
Total Australia Pension Assets 1,555
Total Canada Pension Assets 1,483
Total Global Pension Assets 29,754

SWF Highest Growth Rate in Terms of Asset Growth
Source: Towers Watson Global Pension Assets Study 2013, SWF Institute

5. Being Uneducated
Reading a white paper or Financial Times article on Gulf sovereign wealth funds does not make one a guru on sovereign wealth funds. It is imperative to understand one’s future client and consume a variety of sources of information or specialized research to be kept up-to-date.

This article is written by Michael Maduell and his opinions are his own and not officially of the Sovereign Wealth Fund Institute.

MAS Seeks to Commit $5 Billion to Private Equity and Infrastructure Managers

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From U.S. pension funds to asset-heavy sovereign wealth funds, Singapore is calculating that more institutional investor assets globally are being committed to the Asia region. The Monetary Authority of Singapore (MAS), Singapore’s central bank, signaled and planned to commit US$ 5 billion with locally-based fund managers who will invest in private enterprises and infrastructure projects. The beneficiaries of the mandates will be private equity and infrastructure fund managers. MAS is seeking to lure top global asset managers to Singapore and firms that have a significant footprint in Singapore could be eligible for the funds. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Ivanhoe Cambridge Acquires Cap Ampere Campus from Natixis

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In one of the largest transactions in the French office sector, Ivanhoé Cambridge, real estate subsidiary of Caisse de dépôt et placement du Québec (CDPQ), has acquired a 90,000 square meter office-building campus from Natixis, in the Greater Paris area of Saint-Denis Pleyel. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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GIC Supports CapitaLand Shanghai Investment on Haimen Road

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GIC Private Limited, Singapore’s sovereign wealth fund, has entered into a 50:50 joint venture with Raffles City China Investment Partners III (RCCIP III), a fund controlled by CapitaLand. The joint venture is acquiring Shanghai’s tallest twin towers for an aggregate consideration of RMB 12.8 billion (US$ 1.84 billion). The property is located in Shanghai’s core Central Business District.

Development Details

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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