(November 27, 2013) — Mid-sized US-based asset management firms are most likely to win opportunities abroad despite strong home country biases and stiff competition from incumbent providers, according to Cogent Reports.
Their greatest advantage, the report found, was in their ability to be nimble with manager changes.
According to Cogent, 58% of mid-size firms—with between $250 million and $1 billion in assets—in Australia, Canada, and European countries indicated they were likely to add managers next year. Almost a third (32%) said they were planning to add three or more.
By contrast, larger institutions with $1 billion or more in assets were less inclined for change—51% said they do not have plans to add managers and only 49% thought they would add no more than two.
Cogent Reports also identified management firms’ ability to tailor to particular needs and preferences for investors of different countries as another advantage.
“The first step for any product line extension in a new market is to build brand awareness,” said Linda York, a vice president in Cogent’s syndicated division. “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.”
The report stated that many US-based managers were able to secure this trust with foreign investors. Data revealed BlackRock and JP Morgan achieved most success with winning mandates in multiple countries—aided by high awareness and consideration of clients’ particular needs.
On the other hand, OFI Global/Oppenheimer Funds and Pyramis Global Advisors were least popular among foreign investors.
Australia was most receptive of US-based management firms while Germany, France, and Canada showed more propensity for managers from their own countries.