The ongoing, rapid consolidation in asset management is exposing problems around rebranding. “Crucial” is untangling one’s own story from broader sector narratives, in this jumble of mergers and acquisitions.
This is what the Peregrine Communications consultancy wrote in a report analysing the branding, marketing and communications performance of major fund houses. “The problems caused by the integration of Barclays and BlackRock a decade ago should not be forgotten,” wrote the consultancy in the sections that focus on the communication and positioning surrounding mergers and acquisitions.
Anthony Payne (photo) is the founder of the agency. In the past he has done marketing communications campaigns for Wells Fargo AM, JP Morgan Private Equity and Julius Baer, among others. “More large acquisitions such as Wells Fargo Asset Management and Lyxor await us in the coming year,” said Payne, who has also advised on a large number of acquisition transactions.
Some managers will make strategic missteps in the integration, Payne predicted from his experience. “Others will struggle to integrate disparate entities.”
Staying relevant
The consequence may be that a merged entity fails to remain relevant, for example because it fails to communicate a clear and common brand purpose. Something that, according to Payne, makes it difficult to put forward a convincing proposition to customers. The key, according to him, lies in the visibility of CEOs and senior executives within these companies. They will have to be proactive and energetic in articulating how they will deal with these kinds of challenges.
Mergers, after all, present managers with considerable positioning challenges as they try to reconcile different, and sometimes distinctly different, brands and cultures.
That things can also go well, the firm said, is demonstrated by this year’s acquisition of Wells Fargo AM by Allspring Global Investment. “A fantastic roadmap for other fund houses going through a moment of transition under high pressure.”
Both the rebranding of the company and Joe Sullivan’s leadership transition are positive examples, according to Peregrine, with “strong issue management” through proactive contact with journalists. For example, the fund house targeted publications on the websites of prominent media outlets such as Bloomberg and Institutional Investor. “As a result, Wells Fargo Asset Management was able to ensure that the most important exclusive profiles were ranked at the highest position in Google.”
Less successful: Abrdn
Less successful, according to the agency, was the rebranding of Aberdeen Standard into Abrdn this year, something that was trending on Twitter for 24 hours. And controversial, Peregrine said.
As the asset management industry continues to transition, the rebranding of asset managers will also become more of an issue, the firm predicts. Mergers, acquisitions, CEO changes: transitional moments that can be very dangerous from a reputation perspective, Peregrine said. “Because they are then tied to a number of preconceived and potentially damaging stories about acquisition returns, high CEO turnover, declining profitability and compensation compression.”
According to the firm, the five companies with the highest name recognition are Fidelity Investments, T. Rowe Price, Vanguard Asset Management, KKR and BlackRock, respectively. Among the slightly smaller asset managers, Janus Henderson Investors, Vontobel, Lazard Asset Management and M&G Investment Management, for example, scored well in terms of branding, marketing and communication activities.