Cogent Reports: Winning Bids in an Institutional Mandate Takes More Than Performance

January 6, 2019

Even given multiple opportunities to influence the search and selection process when bidding on an institutional mandate, many asset managers still aren’t winning. New research from Cogent Reports finds that despite the strength and fit of a particular investment strategy, the efforts of marketing and sales teams can make or break an asset manager’s success. These and other findings are included in Beyond Consideration™, a Cogent Reports™ study by Market Strategies International-Morpace.

A series of one-on-one telephone interviews with institutional investors and consultants overseeing collective assets of nearly $150 billion identified four distinct purchase journeys, each with its own nuance and areas of influence. The research also uncovered common mistakes asset managers make in the process of bidding on an institutional mandate, many of which lie largely within the control of sales and marketing teams. One sure way to get disqualified is to present as just another salesperson who is “pitching product with every other sentence.” In addition, poor-quality RFI/RFP responses or inconsistencies between the RFI/RFP response and the finals presentation are red flags for institutional decision-makers.

“Once an asset manager makes it to the point of being considered for a particular mandate, there are opportunities to gain the competitive edge. Personalizing the story so that it feels less like a product pitch and more like a desire to best serve the client’s business need is one of those opportunities,” says Linda York, senior vice president of Market Strategies International-Morpace and co-author of the report.

Asset managers should also not underestimate the importance of skilled presenters who develop a strong connection with the investment committee during the finals presentation. According to the report, an asset manager’s presentation team is being judged on many aspects beyond the quantitative numbers, such as the believability and trustworthiness conveyed by their bearing and articulation, the investment philosophy that they verbalize matching the investments they recommend, and the diversity of the presentation team at-a-glance.

“While performance and price along with familiarity and strength of the brand are integral in the evaluation of asset managers, a variety of more subjective factors weigh heavily in the final selection decision,” explains York. “Our research confirmed that sharing knowledge through thought leadership, gaining knowledge by seeking to understand clients, and building personal relationships are key to a successful institutional asset management business model.”

About Beyond Consideration™

Cogent Reports conducted individual telephone interviews with 26 institutional investors and investment consultants from November 26 through December 10, 2018. Survey participants were required to be senior-level investment decision-makers managing defined contribution, defined benefit or non-profit institutional assets of at least $100 million. Due to the qualitative nature of the research methodology, qualitative base sizes are intentionally of an elite size; findings are for directional guidance by nature and not quantifiable. Market Strategies International-Morpace will supply the exact wording of any survey question upon request.