Cogent Reports: Institutional Investors Reveal Clues for Future Mandates

April 17, 2019

Demand for active fixed income is on the rise in the institutional market, and PIMCO is not the only firm that’s poised to benefit. Although the fixed income powerhouse leads in consideration for fixed income among pensions, American Century and Franklin Templeton Investments are most likely to be considered for active fixed income by non-profit investors. These and other findings are included in US Institutional Investor Brandscape®, a Cogent Reports™ study by Market Strategies International-Morpace.

US fixed income, both actively and passively managed, continues to be in demand among pension investors, who are primarily focused on de-risking their portfolios. Yet interestingly, non-profits express substantial interest in actively managed US fixed income this year in their effort to achieve higher yield and capture tactical opportunities. In addition to fixed income, alternatives are attracting more interest from pensions this year than in the past, while non-profits report increasing interest in private equity.

“At a high level, institutional investors are drawn to asset managers with a history of strong investment performance, a roster of experienced investment team members and a perception of trustworthiness,” says Linda York, senior vice president of Market Strategies International-Morpace and author of the report. “When the opportunity to bid on a new institutional mandate arises, asset managers can effectively differentiate by highlighting their unique capabilities, touting successful aspects of their business, respectfully acknowledging their competitors and articulating how their own research and investment offerings are different and a better fit for their clients’ portfolio.”

Firms Most Likely to Be Considered for Specific Asset Classes

Among Pension Investors

 Active US Fixed Income

 Passive US Fixed Income

 Alternatives

 1. PIMCO  1. BlackRock  1. Oaktree Capital
 2. BlackRock  2. iShares  2. Wellington Management Company
 3. Goldman Sachs Asset Management  3. Vanguard  3 (tie). BMO Global Asset Management
 3 (tie). AQR Capital Management

Among Non-Profit Investors

 Private Equity  Alternatives  Active US Fixed Income
 1. Commonfund  1. Blackstone  1. American Century
 2. Blackstone  2. Commonfund  2. Franklin Templeton Investments
 3. Morgan Stanley Investment Management  3. Goldman Sachs Asset Management  3. PIMCO
Source: Market Strategies International. Cogent ReportsTM. US Institutional Investor Brandscape®. February 2019.

About US Institutional Investor Brandscape®

Cogent Reports conducted an online survey from October 12 to November 30, 2018 among a representative cross section of 409 investors managing an aggregate total of $777 billion. In order to qualify for this study, survey participants were required to be managing institutional assets of at least $100 million and playing a direct role in the evaluation and selection of investments or asset managers within their organization. In determining the sampling frame for this study, Cogent Reports relied upon the Standard & Poor’s Money Market Directories (MMD) database of institutional investors. To ensure the population for this research was representative of the universe of institutional investors, strict quotas were established based on a nested classification of institutional investor category and size of assets. Minimal weighting was applied to adjust for purposeful deviations from the actual marketplace distribution. The data have a margin of error of ±4.85% at the 95% confidence level. Market Strategies-Morpace will supply the exact wording of any survey questions upon request.

 

Click below for more information on the report.

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