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Asset managers live and breathe their target market – but with so much change happening in pensions, post-Brexit regulation and markets, it can be hard to work out the true challenges investors face as a result and cut through the noise. Can market research help, and what is the point of credible content?
Often, ‘the owls are not what they seem’
Over the last four years, we at mallowstreet Insights have conducted over 20 research projects for the leading asset management firms in the UK. Often, our research unveils the true challenges of UK schemes and insurers. This helps managers understand investor obstacles and objections in a much more profound and actionable way. Consider the following recent examples:
ASSUMPTION: DC schemes avoid illiquids because of fees
Efforts to increase DC schemes investments in private markets go far beyond the most recent Mansion House Compact and have been an ongoing regulatory and industry focus for the last several years. It is easy to assume that DC schemes avoid illiquids because of their high management and performance fees, but charge cap reforms did not unleash flows into the asset class.
FACT: There are doubts about the value-add of illiquids
Our research on DC default funds has instead revealed a perception that illiquid assets do not materially improve value for money or member outcomes, even though they act as good diversifiers. This is why many DC schemes shy away from the added complexity and prefer to invest in illiquids via a multi-asset fund similar to a DGF.
ASSUMPTION: Buy-outs are popular because of improved funding
The mini-budget crisis has, contrary to press coverage at the time, led to substantial improvements in the funding levels of DB schemes – even if this comes at the cost of higher interest rates, whose impact is felt throughout the UK economy. It is tempting to assume that improved funding is the reason why DB schemes are rushing to transact with insurers.
FACT: Buy-outs are the only solution to growing complexity
Our extensive engagement with UK trustees shows instead that buy-ins and buy-outs are rising in popularity because they offer the only terminal solution to growing regulatory complexity and legal responsibilities. Any other approach requires the trustee board to remain in place and continue complying with new requirements as they arise in the future.
ASSUMPTION: Insurers invest extensively in private markets and real assets
As DB schemes de-risk and prepare for their endgame, they are often reluctant to invest in illiquid assets such as private markets and real assets, which has led many managers to refocus on insurance firms instead. Given that insurers are not chasing an endgame, it seems logical they have longer time horizons and are able to handle illiquidity.
FACT: Insurers avoid some illiquid assets due to capital charges
Our Insurance Report 2023 brings to light that two in three insurers do not invest in core real estate or infrastructure. Unfortunately, challenges around complexity, capital efficiency and cashflow structuring make it difficult for insurers to invest in real assets and other illiquid alternatives, which raises questions about financing the green transition in the UK.
Credible content has longevity and improves brand reputation
We capture a targeted but diverse audience and write reports that reflect the true world of pensions, without a hidden agenda, providing a real perspective across technical subjects – and these are not our words but those of our readers. Our research is designed to shape the industry discussion on current topics, allow trustees and insurance professionals to air their concerns and learn from each other.
Credible content leads to engaging stories – and these can help managers not only make UK investors feel heard and understood, but also demonstrate their ability to overcome their biggest obstacles, make all interactions a win-win and gain the trust of the industry.
Credible content also has longevity. While events and face-to-face interactions remain the best way for managers to reach their target audience, they only last an hour or a day – and even then, it might be hard to get the right audience in place. Engaging content on the other hand has long shelf life and can be used time and time again to captivate new audiences and initiate meaningful conversations.
Engaging content drives qualifies leads
Events provide great exposure for asset managers, but big conferences do not always introduce them to the people that are genuinely interested in their solutions. And while smaller events offer a more targeted audience, credible content can help generate dozens of engaged and qualified leads.
This is possible because mallowstreet Insights gather opt-in leads at multiple points in research projects – including the names and emails of investment decision-makers happy to hear from our research sponsors. mallowstreet has been at the heart of the UK pensions industry for over 10 years and has a growing presence in insurance. Thanks to the trust our community places in us, asset managers can focus only on the most relevant contacts.
Contact us if you would like to become a research partner, strengthen your brand and improve your positioning across the UK institutional market.