How Can US Asset Management Firms Find Opportunities Abroad?

Cogent: Mid-Sized Institutions Best Bet

November 26, 2013- CAMBRIDGE, Mass.–(BUSINESS WIRE)–While US-based asset management firms face a number of uphill challenges when seeking opportunities abroad, including home country investment bias and high overall satisfaction with incumbent providers, many are on the radar screen and thus poised to win more business outside the familiar territory of the United States.

This is the case particularly among mid-sized institutions that show a greater propensity for making changes to their current manager lineup. These and other findings are included in the inaugural edition of International Institutional Investor Brandscape®, a Cogent Reports study from Market Strategies International.

When asked how likely they are to add managers in the next year, 58% of institutions with $250 million to just under $1 billion in assets across Australia, Canada and 10 European countries indicated they are likely to do so, with one-third (32%) planning to add three or more. In contrast, more than half (51%) of institutions with $1 billion or more in assets in those same countries do not plan to add any new managers next year and 49% will add just one or two. A similar dynamic emerges among institutions planning to drop managers. Thirty-eight percent (38%) of mid-sized institutions expect to drop one or two managers over the next year, while very few, only 2%, of larger institutions expect to terminate any existing relationships.

According to the report, manager selection criteria and preferences for non-domestic equities and fixed income can vary significantly by country, thus requiring a tailored approach by firms planning to enter specific markets. However, a significant number of US-based asset managers have achieved a broad level of both awareness and consideration, placing them in contention for winning new mandates in multiple countries abroad. “The first step for any product line extension in a new market is to build brand awareness,” says Linda York, a vice president in the syndicated division and author of the study. “Once that has been achieved, managers need to build a credible and compelling story, emphasizing the capabilities and characteristics considered most critical to their chosen markets.”

...manager selection criteria and preferences for non-domestic equities and fixed income can vary significantly by country, thus requiring a tailored approach by firms planning to enter specific markets

About the International Investor Brandscape® Study
Cogent Reports interviewed a sample of 687 institutional investors, which were recruited from a variety of business telephone lists in each country. Respondents were required to be senior-level investment professionals managing the equivalent of $20M+ in institutional defined benefit pension assets. Due to the nature of sample availability in each country, this research does not yield a random probability sample of the target population. As such, it is not possible to compute a margin of error or to statistically quantify the accuracy of projections. Market Strategies will supply the exact wording of any survey questions upon request.

About Market Strategies International
Market Strategies International is a market research consultancy with deep expertise in communications, consumer/retail, energy, financial services, healthcare and technology. The firm is ISO 20252 certified, reflecting its commitment to providing intelligent research, designed to the highest levels of accuracy, with meaningful results that help companies make confident business decisions.

Market Strategies conducts qualitative and quantitative research in 75 countries, and its specialties include brand, communications, customer experience, product development, segmentation and syndicated. Its syndicated products, known as Cogent Reports, help clients understand the market environment, explore industry trends and evaluate and monitor their brand and products within the competitive landscape. Founded in 1989, Market Strategies is one of the largest market research firms in the world, with offices in the US, Canada and China. Read Market Strategies’ blog at FreshMR.