Category: Report

There are several ways firms can begin to define, measure and track their own culture, using existing frameworks such as ACT by City Hive and the Thinking Ahead Institute’s culture assessment. Articulating that to external audiences in a way that truly resonates, however, can be a difficult exercise.

Our 2024 JPES Partners Asset Owner Study found that 97% of those who were surveyed believed that the ability of an asset manager to demonstrate a positive corporate culture was a key part of their selection criteria, yet almost the same proportion felt that asset managers were falling short in being able to do so.

It was clear from the research that choosing which asset manager to work with goes beyond an understanding of how portfolios are constructed and their investment track record. Clients increasingly want to also understand how this is achieved and how the culture of the business contributes to building a sustainable business.

Following the Masterclass, we have collated a report of some of the key discussion points that arose, highlighting learnings and considerations for asset managers when reflecting on their own culture. Some of the key takeaways include:

• Senior leadership must buy into the importance of culture and be active participants.
• An authentic culture must be brought to life with tangible examples.
• Culture is rarely addressed in a beauty parade process; but it can be a true differentiator.

To download a copy of our paper, The Importance of Culture in Asset Management, please complete the form below.

This strategy of upgrading funds over time was one of the key findings of last year’s report when managers cited concerns of being accused of greenwashing as a reason for taking a cautious approach to their initial classifications under the EU’s Sustainable Finance Disclosures Regulation (SFDR), with the aim of reclassifying them over time.

However, this is yet to satisfy regulators as the UK’s Financial Conduct Authority (FCA) and the US Securities and Exchange Commission (SEC) are seeking tighter measures to limit the possibility of greenwashing in investment products. The FCA’s proposed approach is to go further than existing SFDR classifications by ensuring products classify how they are sustainable and restricting the use of terms such as ESG or green if products don’t qualify.

Greenwashing fears and a prudent approach to product development is also being reflected in how asset managers view their expertise on responsible investing, with fewer firms than ever before willing to declare themselves a ‘pioneer’ in the space.

As the table below shows, in 2019 half of the asset management industry believed it was pioneering in its approach to ESG, now only 6% of asset managers we spoke to would describe themselves as a true ‘pioneer’.

This new, more balanced perception, also reflects a shift in attitude around the way that firms communicate their responsible investment approach. While there isn’t the same frantic need to talk about responsible investment that firms felt a few years ago, half of the managers we spoke to said it does still remain their number one communications priority.

That strategic imperative illustrates why the volume of ESG-related content being produced by asset managers has been rising steadily in recent years, and also explains why 80% of asset managers this year told us that they still plan to increase the volume of ESG content even further, despite the fact that so often, much of it simply cannot be used.

This year the Investment Communications Trends Report has been divided into three shorter, standalone reports. The third of these, on Content & Digital, will be made available in the coming weeks.

To read the report on ESG and responsible investment please complete the form below.

This was particularly evident among the larger firms, with 83% of those with assets under management of more than $500bn having private markets solutions, perhaps indicative of many having made targeted acquisitions in recent years.

Among all sizes of asset managers we spoke to who do invest in private markets, almost all (90%) said it remains a strategically important objective for business growth, with 60% saying it had even accelerated as a priority over the last 12-months.

So, who is buying these products if the priority has increased so substantially? Historically the demand has come from institutional investors as the asset class often requires large upfront minimum investments and the capital is often locked away for long periods, yet it now appears that asset managers are turning their attention to other investors.

The Financial Times reported that with many large institutions having up to 50% of their portfolios in alternative assets, managers are now looking at retail investors for the next wave of demand. This was borne out by McKinsey’s research which found the average retail investor has just 2% of their portfolio in alternatives.

Several of the firms we spoke to also echoed this sentiment, noting that they were working on launching more solutions for the retail / wholesale audience, with one firm noting that this shift in approach had come directly from intermediaries asking for them to create new solutions.

While intermediary channels may provide more avenues for capital in the future, this doesn’t come without its own set of challenges. Most participants cited the strict regulation governing the marketing of these products as limiting what they are able to say publicly, particularly around private placements.

There is one storyline, however, that we may begin to see more of in the future. Prequin data published earlier this year showed that 42% of global private market capital is managed in funds that are run with sustainable investment principles, so whilst private markets haven’t traditionally been associated with responsible investing, for those who can demonstrate transparency and genuine impact through their activities, this could be a key differentiator in 2023.

This year the Investment Communications Trends Report has been divided into three shorter, standalone reports – Private Markets; ESG; and Content & Digital, all of which will be made available over the coming weeks.

To read the first report on private markets please complete the form below.

This is according to JPES Partners’ latest study, the Asset Management Trends Report 2021, which is based on in-depth interviews with senior in-house communications professionals at asset managers who collectively manage €12-trillion in assets.

Alongside this expected surge in green products by many industry players, 76% of these same firms surveyed said they still had serious misgivings about greenwashing by the wider investment industry.

Yet even with a complex, multi-layered topic such as ESG, there is still one theme that appears to have cross-industry support. When asked what subset of the ESG debate they were most focused on, climate was overwhelmingly the top response given by over 40% of asset managers, with other popular themes including broader environmental issues, impact investing and diversity.

If climate, or decarbonisation, is linked to the new product development plans, then caution may need to be exercised in some cases though. Recent analysis by InfluenceMap found that 71% of funds specifically marketed using ESG and climate-related key words, had a negative Portfolio Paris Alignment score.

Whether it is climate, broader environment or impact-focused, all of this may provide some indication of the topics that we can expect to see content on from asset managers in the next 12 months, for there is near-unanimous certainty that we will be seeing far more ESG material on the horizon, as 82% of firms expect to produce more ESG content in the next year.

For those who are planning to do so, it is worth keeping in mind that a recent JPES Media Audit found that the amount of ESG content journalists are receiving has soared by over 150% in the last 24 months from an average of 32 pieces of content per month to now over 90, the majority of which will never be used in a published piece.

As more and more questions are being raised about what impact or benefit all of these ESG products are truly having on the issues they purport to be tackling, further scrutiny can be expected of even the brightest green stars, particularly those with brightest, loftiest, claims.

Other notable findings:

• Two thirds of asset managers expect to use some form of virtual event post-pandemic
• Nearly 60% believe there is a greater need for digital expertise in a communications role
• Over a quarter are actively recruiting to fill this digital communications gap
• 41% of firms think they are an early adopter of ESG, with 23% citing their pioneer status
• Most managers are now producing less content overall than they were two-to-three years ago

With the media continuing to play a vital role in making end-customer audiences aware of event, shaping their thinking and requirements as a result, investment industry businesses must be more aware of media agendas then every before. Only by understanding what is coming up on the horizon can these businesses plan for the future and position themselves at the forefront of those topics of most importance to underlying clients.

It is this premise that forms the basis of JPES Partners’ seventh Asset Management Report – The Asset Management Agenda 2021 – where we have conducted comprehensive research across global English-speaking media titles (including national and international press, specialist trade publications and newswires) to identify those themes trending upwards in the media and therefore likely to drive agendas in 2021. In parallel, we have also sought the views of leading journalists to gain a clear sense of what topics they expect to be most prominent in the year ahead.

KEY FINDINGS

• Increased scrutiny, arising from greater socio-political pressures, will push the asset management industry to up its game on diversity and inclusion, both within asset managers’ own businesses as well as those they invest in
• The influence of millennials, an increasingly prominent part of the asset management industry’s client base, will continue to grow, with generational change causing asset managers to adapt their investment focuses and ways of working
• The continuing proliferation of ESG products will intensify scrutiny of potential greenwashing, particularly as issues such as climate change increase in emphasis due to changing geopolitical agendas
• Responses to and recovery from recession conditions caused by the coronavirus pandemic will have a substantial impact on end-investor priorities and needs, with asset managers having to adapt accordingly
• Asset managers will have to demonstrate their social responsibility credentials, with greater scrutiny of how they engage with both their own workforces and their underlying investments to positively contribute to the wider world

Watch a 3-minute film about the report’s findings and predictions

It is this premise that forms the basis of JPES Partners’ sixth Asset Management Report – The Asset Management Agenda 2020 – where we have conducted comprehensive research across global English-speaking media titles (including national and international press, specialist trade publications and newswires) to identify those themes trending upwards in the media and therefore likely to drive agendas in 2020. In parallel, we have also sought the views of leading journalists to gain a clear sense of what topics they expect to be most prominent in the year ahead.

KEY FINDINGS

• The investment industry remains behind the curve on diversity and inclusion, with increased focus and scrutiny expected to ensure it is meeting best practice principles
• A continued emphasis on Environmental, Social and Governance (ESG), but with a greater focus on tangible solutions that address specific issues, particularly challenges resulting from climate change
• Substantial evolutions in asset management business, investment and communication practices in response to generational change and the requirements of a new client base of millennials
• The impact of upcoming elections in shaping the geopolitical ecosystem and ensuring either a continuation or rejection of the isolationism that has shaped markets, the global economy and international engagement over recent years
• Changing requirements and pressures on asset managers as a result of concerns over liquidity in markets, exacerbated by recent controversies, fund suspensions and closures

In fact, today it can be argued to be the single most influential theme currently driving the investment industry.

In light of this, we conducted the 2019 JPES Partners ESG Media Audit, with a view to assessing journalist’s perceptions of how asset managers are communicating to them around ESG to see if lessons could be learned.

The following report analyses the growth in ESG as a theme for asset managers and how the media are perceiving this new trend, looking at both the quantity of material being produced, but also critically the quality of that material.

KEY FINDINGS

• 92% of journalists expressed concern about greenwashing by the asset management industry
• Only 25% of media are positive about the quality of ESG content they receive
• Only 33% strongly trust the content they receive

We estimated then that journalists were receiving as much as 250 different pieces of content (unsolicited material from managers such reactive macro comment, white paper, blog post, research etc) from asset managers every single day.

Since then I have had many conversations about this research, and almost all of them have centred around this theme: that there is too much content being produced, and much of it is ineffective in delivering the results needed.

So, with most people in agreement that there is too much content being generated, has this seen the tide begin to recede? Not a chance.

Our research this year shows that while most of us agree that simply having more content in and of itself is not helpful, the wall of content does continue to grow. In fact we estimate that the media now receive significantly more than 300 pieces every single day, up 35% on last year.

The culprits this year, however, are the medium sized managers (classified in this case as between $100 – $500 billion) who have ramped up content volumes over the last 12 months as they play catch-up to their larger counterparts. Interestingly, the super-size managers, who tend to be the most prolific in generating content, seem to have taken heed of these concerns and are becoming increasingly circumspect, albeit still prolific.

What is clear from the conversations we have had this year is that the wall of content is turning a very particular shade of green. Almost all respondents (85%) said they will generate more ESG-focused content in the next 12 months – and of those who aren’t looking to do more this is largely because they are ESG specialists so everything they do is written through that lens.

For those who are considering producing more on ESG, it would be prudent to take on board a comment from one journalist we spoke to recently, who said of the ESG content they receive, most of it is “relatively poor, has the same angle and is self-serving”.

We said it last year but it is not about producing more content; it is about producing the right kind – and then using that material in a targeted way for journalists that really adds value. However, the wall of content appears to still be standing firm, for now.

For more information about the Asset Management Trends Report 2019 or to receive a copy of the white paper please contact Miles Donohoe at miles.donohoe@jpespartners.com or on +44 (0) 7520 7625.

It is this premise that forms the basis of JPES Partners’ fifth Asset Management Report – The Asset Management Agenda 2019 – where we have conducted comprehensive research across global English-speaking media titles (including national and international press, specialist trade publications and newswires) to identify those themes trending upwards in the media and therefore likely to drive agendas in 2019. In parallel, we have also sought the views of leading journalists to gain a clear sense of what topics they expect to be most prominent in the year ahead.

KEY FINDINGS

• Active quant strategies have become increasingly popular and have recorded strong inflows over the last year, but will face further scrutiny over their ability to deliver in different, and more challenging, market environments
• Demand for Environmental, Social and Governance (ESG) solutions continues apace, but asset managers will have to clearly demonstrate their ability to meet such criteria in the face of more sophisticated ways of measuring ESG impact and greater scrutiny from a more socially-conscious audience
• Technology is creating new opportunities and efficiencies for asset managers but could also leave the industry open to disruption as new entrants seek to gain market share
• Recent sell-offs have heightened concerns over growing market risk, with it becoming increasingly likely that asset managers will have to deal with new and more volatile paradigms as questions arise about when the longest running bull market in history will come to an end
• Populist sentiments and nationalism have made for a highly uncertain geopolitical environment, with asset managers have to plan at both investment and business levels for the fallout arising from events, most notably Brexit

Through a series of interviews conducted with senior communications professionals at global and European asset management firms, it is clear that while overall the landscape appears to be positive, the communications function is rapidly changing.

The findings show that on average asset managers are putting out a new piece of content (i.e. white paper, research, blog, opinion piece or proactive comment) at least every two days, with some putting out as much as two different pieces of content every day.

As a result, we have estimated that journalists are likely receiving at least 250 different pieces of content every single day simply from top asset managers – and that is before one considers invitations to events, introductory meetings with spokespeople, among other requests.

The report shows that with the majority of respondents wanting more strategic coverage, there may be some discrepancy between these highly proactive content strategies, and whether they are achieving the desired goal.

Asset managers may feel that they have a new perspective on a current issue to convey to the market; but with so much content available, it is all too easy for it to be lost in the maelstrom of content.

It is not necessarily about producing more content; but rather about producing the right kind – information that is relevant and topical to the evolving news agenda, constructed in a succinct way that actually provides a new perspective.

Other notable findings of the report include:

• 35% of in-house communications professionals believe the biggest challenge in securing the media coverage they want is a shrinking media pool
• 60% want more strategic coverage, even if that means lower volumes
• Yet, 45% are hoping to produce more content

In response to this, we have written a report on how institutional investors can drive the message home to incumbent boards, co-shareholders and stakeholders:

KEY TAKEAWAYS

• For a successful campaign, activist investors need audience-specific messaging and media access to communicate their investment thesis, as well as detailed media plans that anticipate target company responses
• Fellow stakeholder agreement is now critical in most activist campaigns. Without it, an activist has little or no leverage with the board of the targeted company; winning the narrative battle is therefore essential to an activist’s campaign
• Financial, operational and commercial understanding of what an investment thesis is based on needs to be accurate and precise in order to maintain credibility with investor bases
• Activists need to use more subtle methods than they have previously, sculpting and honing their messaging rather than aggressive stake-building; the move from unilateralism to building strategic consensus among other shareholders should provide more legitimate leverage in promoting their agenda for change

It is this premise that forms the basis of JPES Partners’ fourth Asset Management Report – The Asset Management Agenda 2018 – where we have conducted comprehensive research across global English-speaking media titles (including national and international press, specialist trade publications and newswires) to identify those themes trending upwards in the media and therefore likely to drive agendas in 2018. In parallel, we have also sought the views of leading journalists to gain a clear sense of what topics they expect to be most prominent in the year ahead.

KEY FINDINGS

• Active management will face severe scrutiny, including questions over fees and the implication of new regulations that will substantially impact industry practices
• Demand for investment solutions incorporating Environmental, Social and Governance (ESG) criteria will continue to increase absolutely and in terms of their complexity
• The rising popularity of fiduciary management is likely to be matched by questions as to the role providers play and the potential for conflicts of interest, particularly among the investment consultant community
• Disruption of longstanding asset management industry practices is likely owing to the development of new technologies and the potential for the entry of new players into this market
• New dynamics resulting from generational changes will necessitate evolution within the wealth management space

Some experts welcomed the report and its goals, whilst others criticised the City regulator for not going far enough. With this mixed reaction in mind, JPES Partners has undertaken a detailed analysis of the core findings of the report and how the media has responded, plus an insight into how the press expects the story to play out.

Download our analysis of the FCA Final Report

It is this premise that forms the basis of JPES Partners’ third asset management industry report. We have conducted comprehensive research across English-speaking national titles, specialist trade publications and newswires to identify those topics that have trended upwards in the media in the last year and will likely continue to drive agendas in 2017. In parallel, we have also sought the views of leading journalists to gain a clear sense of what topics they expect to be most prominent in the year ahead.

Key findings:

• Geopolitical risk is the single most important issue likely to drive news agendas
• The longstanding debate between active / passive management styles has evolved, with a greater focus on how active can justify itself in comparison to smart beta
• Scrutiny of asset management practices is increasing, with much greater attention being placed on regulation and fees
• Accountability remains a key issue for the industry, with managers having to do more to explain their place in the world
• ESG has now fully entered the investment mainstream and is a key consideration practitioners, investors and even governments
• Technology continues to be an important area of focus and disrupter for the investment industry

For more information contact Matt Rogers.

CLICK HERE to download our industry report on coping with a reputational crisis.

For more information contact Miles Donohoe.