'Scale' top factor for US institutional investors selecting asset manager

Written by Adam Cadle

25/07/2024

'Scale' tops the factors US institutional investors consider when selecting an asset manager for an investment mandate (85%), according to new research from Cerulli.

Experience with similar clients was also a factor among 55% of institutional investors, and specialisation in a specific asset class was a factor for 53%.

From a service perspective, investors want access to investment decision makers (portfolio managers and analysts), with 38% stating this as a very important element of client service. Overall, 33% of investors stated they have quarterly meetings and 31% noted that annual meetings occur with portfolio managers.

“These aren't just transactional sales—they are client relationships,” Laura Levesque, director, at Cerulli, said.

“Investors want to be certain that communications about investment progress and any important events related to their investment will be properly communicated to them.”

Cerulli recommends asset managers maintain focus on their existing clients as much as prospective opportunities.

“The longer a firm keeps a client, the more profitable the relationship becomes,” Levesque said.

“Given the abrupt change in the market, asset managers will need to get ahead of any pitfalls to retain clients. In the long run, deviating from stated mandates will be far more likely to get a strategy terminated than short-term poor performance.”

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