Alternative investment managers appear to be rapidly catching up with the marketing expertise of traditional firms.
A year after Peregrine Communications’ inaugural Alts 50 report, which rates the marketing performance of the world’s 50 largest alternative managers, the firm found that private equity firms in particular were gaining traction in brand awareness and brand momentum. They scored 7 out of 10 on Peregrine’s average brand score, the equivalent score of the world’s top 20 asset managers. Citadel, CVC Capital Partners and Fortress Investment Group are among the top performers in this assessment, according to Peregrine.
The second annual report expected to be released on Thursday found that the overall Integrated Marketing Communications (IMC) score for all managers improved from a year ago. In addition to brand awareness and brand momentum, the average BMI score also includes metrics such as website effectiveness, paid media, and media sentiment. The report examined 20 private equity firms, 20 hedge funds and ten credit shops.
Blackstone remained at No. 1 on the list, followed by Millennium Management, up six spots from last year to No. 2. Apollo Global Management, which climbed seven spots, tied with Vista Equity Partners at No. 3. The 2021, Vista was No. 3. tied with Bridgewater Associates for sixth.
This year, Advent and Bridgewater tied for fifth place, followed by Ardian, Ares Management, Brookfield and General Atlantic.
Citing a McKinsey 2022 ReportPeregrine attributed the increased marketing savvy of alternatives managers to the growth of private markets over the past decade, as well as a new push to go after retail investors.
“The biggest alternative companies are already building dedicated marketing teams to go to war to win the ‘retail battle,'” the company wrote in the report.
Due to overall growth in private markets, the report also found that 74 percent of listing managers increased their brand awareness, Peregrine’s key metric, amid a three-year decline in broader asset management industry.
“You can’t ignore the macro context,” said Josh Cole, co-CEO of Peregrine. “The gap between Blackstone and the rest of this year is not as wide, indicating that several companies are doing better in their marketing.”
Even hedge funds, which have had a relatively rough decade, are poised for a resurgence due to the dislocations and opportunities of today’s inflationary environment. “What kills hedge funds is ‘business as usual,'” Cole said.
Some of the best-performing companies this year scored a high level of website effectiveness, Google page 1 and search engine optimization – a manager’s “property channels”, which measure content third-party positive that appears on the first page of Google. This is an indicator of the managers ability to drive traffic to their sites. Only eight companies scored 8 out of 10 or higher in this category, while almost half of the companies surveyed fell short (6 out of 10).
Millennium, for example, leveraged its website to attract top talent with a focus on culture, an effort that Cole highlighted as one of the most important areas for companies to clarify and highlight. “When you think about their website, it’s almost talent-first and customer-second.”
Another reason why most alternative companies fell short with their website presence is because they didn’t have a clear brand strategy yet. Part of the problem, Peregrine noted, was due to the diversity of investment strategies, asset classes and funds of alternative managers and the clients they serve, which can vary widely in language, region and regulatory requirements.
“But what is clear is that a website that draws people to the right content and helps people find what they need as quickly as possible can be an incredible asset for managers,” the report states. “Senior managers will sometimes claim that their online footprint is irrelevant, but it shouldn’t be forgotten that Fidelity is the subject of more global searches each month than Beyonce.”
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