Marketing Intelligence – Distribution

Written by Jemma Tilbrook on 25/01/2017

In the post-Brexit landscape, Distribution functions have continued to be a focus for corporate hiring, despite being a typically slower quarter. The access to and retention of investor capital has been the major challenge of the past few months; with the onus very much remaining on transparent and clear communication between business and investor. The fundamental focus for Investor Relations (IR) functions has been to continue proactively educating the market regarding changes impacting the business as they occur. Whether positively or negatively implicated, the principles remain the same; quickly communicate new developments regardless of their connotation. In the context of the current backdrop, managers with UK centric portfolios have been experiencing withdrawals across equities and fixed income where investors have reduced their exposures to these product.

 

This uncertainty has in some cases resulted in the suspension of funds, for example UK property funds, and thus the emphasis of the IR function has become less focused on asset raising and more towards maintaining an amiable relationship. For the larger institutional houses this has required IR / Client Services functions to upskill their teams. Rather than hiring new talent, generally firms have instead provided additional training on how best to be clear and deal with, at times, these more negative queries whilst being transparent and consistent.

 

The priority, therefore, leaving Q3 for many IR functions continues to be maintaining and managing the relationships with investors, forging strong connections between both existing and prospective clients rather than having an aggressive focus on cross selling or increasing capital.

 

Whilst the maintenance of relationships with current investors is a key goal, it is followed closely by diversification of the investor base, both internationally and more generally. Rather than being solely UK / US centric in outlook, diversifying into other geographies such as Europe and Asia works not only to mitigate risk but also opens up less saturated markets and provides ample investment opportunities. Consequently in practise, ensuring that functions aren’t solely focused on one or two markets works to protect business from country specific incidents, which would otherwise be highly detrimental financially.

 

Twinned with geographical diversification, we have also seen candidates lean towards opportunities in IR at the funds who have a diversified or multi-strategy investment offering. The appetite for said candidates being two fold; firstly having more exposure to diverse investor queries across different strategies, and secondly to join funds that are more stable and gaining more inflow. As this directly impacts the variety of duties performed once in that position and the trajectory that such a position can offer.  Variety of role and pace of progression being two of the most important drivers to consider when making a career move in the IR space.

 

As aforementioned, this focus on delivering excellent levels of client service has resulted in hires across the buy-side largely focusing on investor relations and relationship management functions; in turn ensuring positive brand awareness and happy investors through transparent communication.

 

Marketing has also been a particular focus for businesses, with company success resting on storytelling capabilities and ability to deliver high quality, innovative campaigns. Digital is now more important than ever and creating online content which amplifies key messages is crucial.

 

Skillsets in Demand:

 

As mentioned earlier where a concerted effort to diversify has ensued, languages continue to be a key hiring requirement for many buy-side functions; larger institutional houses through to more boutique outfits tending to make this a pre-requisite for new roles. A particular focus has been on French, Italian, Spanish and German, subject to the nuances of the firm’s marketing efforts. From a recruitment perspective, this has emphasised the need further to proactively source candidates through headhunting and referrals rather than relying upon the immediately available, active pool.

 

Emphasis has shifted from not only charismatic and engaging IR candidates but also requiring in-depth technical and product focused knowledge to deal with increasingly complex investor queries. Account managers are now not only expected to be strong communicators but know the nuances of performance numbers, how these are implicated by macro topics, the intricacies of complex product structures and the risk each investment holds etc. The requirement to first build credibility with transparency and then through consistent timely delivery remain; but credibility comes with fostering a deep knowledge of the business, the industry and other sector constituents within it. In this vein, multi-asset and fixed income knowledge has continued to be a sought after area of expertise.

 

The merging of traditional & digital skillsets in marketing has acted as a catalyst for more nimble and diverse candidates in this space. At the junior end, being wholly comfortable with software such as the Adobe Suite and the ability to switch between working on social media to more traditional campaigns, is a must. At the senior end of the spectrum, unlike this time last year, the focus has been on institutional experience rather than wholesale or discretionary. This in turn has led to a competitive landscape for individuals with this skill set and as a result are being paid a premium to stay or move. Furthermore, this has created continued pressure to deliver innovative strategies to attract and land the investment from these big players.

 

Pay:

 

Across the various facets of Distribution, salaries have remained constant with a typical 10-15% increase on base for an external move. For the Investor Relations / Client Services space bonus potential has typically remained within the 20-25% quartile for 1-3 years, 25-40% in the 3-7 year range and at the top end reaching 100%+. On the marketing side, for 1-3 years’ typically looking at 10-20%, 3-7 years up to 40% and once again at the upper echelons reaching 100%. That said, with any fund there are variables that impact every candidate regardless of the area they cover; performance of fund, AUM, HC and the actual money in the pot for bonuses being the main one.

 

Outlook:

 

Having spoken with Heads of Distribution and HR alike, it appears that there is very much a BAU approach, with hiring not looking likely to decrease in the coming months despite initial Brexit fears. This links to above, that there remains a significant need to maintain an open and transparent dialogue with investors and as such hiring requirements will remain steady.

 

From a recruitment perspective, where upskilling has been the case it has resulted in a largely positive reception where speculative introductions have been made. In the competitive candidate landscape within which we find ourselves, it is no longer sufficient to work reactively when roles come through but need to be proactive with excellent candidates. This, twinned with a good understanding of individual clients has resulted in plugging gaps in teams where internal upskilling hasn’t sufficed, or indeed have required headcount due to growth.

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