While many in the pensions industry took a well-deserved break at the start of an exceptionally sunny April, Moore Squared Communications continued talking and posting!
We published two more blogs addressing the challenges faced by asset managers – the first looked at the implications for consolidation in the LGPS and workplace schemes while the second asked whether run-on would revivify asset managers’ closed DB fortunes.
Our ‘client connection’ series also grew with two posts explaining why sustainable investment remains an important trend for institutional investors and how in-person events can cement client relationships.
I was delighted to come runner-up in the Pensions category for the 2024 State Street UK Institutional Press Awards!
April wasn’t all work; we made it to Paris for a few days after Easter. We admired a rebuilt Notre Dame and revisited Monet’s water lilies – which were gifted by the artist to the state after World War One to celebrate peace. We also managed to eat lots of delicious French food!
May is a busy month with our next sustainable networking event on Tuesday, 6th May when we will be discussing the implications of the Nest/IFM Investors partnership for other asset managers. On Tuesday, 20th May we will be running a gifted workshop when we will be discussing how to be a credible sustainable investor. Get in touch if you would like to attend either event.
Consolidation challenges
The Labour government’s push for consolidation is helping to re-shape the UK pension scheme landscape. In this post in Moore Squared Communications’ ‘asset management challenges’ series, we look at the implications this has for asset managers.
The pensions minister, Torsten Bell, said he expected all LGPS assets to be managed within pooled, FCA-authorised fund structures by March 2023. The government has also said the minimum size for auto-enrolled workplace schemes should be £25bn.
As these pools consolidate and grow their assets, it will become more economical for these schemes to use in-house teams potentially reducing the opportunities for external asset managers.
Will run-on revivify defined benefit opportunities for asset managers?
Let’s not beat about the bush − there are clear incentives for the industry to run-on pension schemes. It keeps investment consultants in work and provides opportunities for asset managers.
The government has also realised run-on is a way to encourage legacy pension schemes to invest part of the £2 trillion they manage in UK productive finance.
The latest post in Moore Squared Communications’ ‘Asset management challenges’ series examines whether run-on will revivify defined benefit opportunities for asset managers.
Run-on is not for every scheme. It’s better suited to a well-funded scheme with a strong sponsor. And it’s hard for a scheme smaller than £100m to consider this option.
But the financial incentives are motivating some to go down this path. Schemes are starting to think how surpluses can be divided up between employers as well as DB and DC scheme members.
Could run-on could be a way back into DB schemes for asset managers? Many feel locked out after the LDI crisis.
Be a credible sustainable investor
According to the headlines, sustainable investing is dead. Here’s just one example – the Net Zero Asset Managers initiative ceased activity on the back of an exodus of US companies.
This post explores how, among UK pension schemes, sustainable investment remains an important trend. The People’s Pension recently appointed Amundi and Invesco as asset managers saying both share the master trust’s commitment to responsible investment.
Global asset managers now have the growing headache of keeping two different audiences happy. But where there are challenges, there are also opportunities. There is a mega-manager void begging to be filled by a sustainably-focused asset managers.
But to exploit this opportunity, it’s not enough to do sustainability well – you have to talk about it well too. Otherwise you risk losing market share to investors who do it badly but talk about it well.
Design in-person events
Remember those crazy days during the pandemic when conventional wisdom said events were dead and everything would be online? Scroll forward five years and the pensions calendar bulges with conferences, round-tables and panel discussions.
The piece explains how relationships are at the heart of the investment industry and cannot be built by digital marketing alone. You need to spend face-to-face time with your clients.
While events have roared back to life, they are all too often organised by committee rather than by design. How many morning meetings in bland office spaces with a panel of internal experts have you recently attended?
The lack of thought and hospitality gives the subliminal message: “We want to sell to you without any effort to make a meaningful connection nor any demonstration of our generosity.”
Done well, events play an important role in building deep client connection and elevating you above your competitors. It’s also often a more cost-effective way to build those deep relationships than sponsorship and advertising!
What are the implications of the Nest/IFM Investors partnership for other asset managers?
The next networking event will take place at 6pm on Tuesday, 6th May when we will be discussing the implications of the Nest pensions/IFM Investors partnership for other asset managers and if greater collaboration is the future of DC allocation.
Auto-enrolled pensions schemes are the largest institutional growth opportunity for asset managers with assets expected to reach £1trn by 2030. With a reliance on passive equity, the UK government’s focus on productive finance represents an opportunity for private asset managers to get a piece of this growing pie. But will partnerships like Nest/IFM limit the opportunities for third-party managers? We also discuss the best way to make workplace schemes sustainable.
Joining me to debate these questions are, Mark Fawcett, OBE – CEO of Nest Invest, Maria Nazarova-Doyle, CFA – global head of sustainability at IFM Investors, Jesal Mistry – head of DC investments, L&G – Asset Management and Anthony Ellis – head of DC investment strategy at Hymans Robertson.
Get in touch if you would like to attend!
Gifted workshop – be a credible sustainable investor
Don’t believe the media noise. Institutional investors – pension schemes and insurers – are not turning away from sustainable investing; they are looking for asset managers who can match their philosophy and needs.
It’s never been more important to not only be a credible sustainable investor but also to be perceived as one. It’s no longer enough to do sustainability well – you need to talk about it well too.
If you don’t, you risk losing business to those who do it badly but talk about it well.
We know this from two decades of talking to everyone involved in the investment chain – managers, advisors and asset owners. We understand your sustainability ethos needs to run through your business the same way the word ‘Blackpool’ runs through a stick of rock.
That’s why we have created a gifted workshop on how to be a credible sustainable on Tuesday, 20th May at 4pm.
Click here if you would like to attend!
