Alternative investment managers seem to be catching up quickly with the marketing expertise of traditional companies.
A year after Peregrine Communications released its first Alts 50 report, which evaluated the marketing performance of the world’s 50 largest alternative managers, the firm found that private equity firms in particular were gaining traction in terms of brand awareness and brand momentum. They scored 7 out of 10 on Peregrine’s average brand value, which is in line with the top 20 money managers in the world. Citadel, CVC Capital Partners and Fortress Investment Group were among the outperformers on this rating, according to Peregrine.
The second annual report, expected to be released Thursday, found that all managers’ overall Integrated Marketing Communications (IMC) scores improved over the previous year. In addition to brand awareness and brand dynamics, the average IMC score also includes metrics such as website effectiveness, paid media, and media sentiment. The report examined 20 private equity firms, 20 hedge funds and 10 lending businesses.
Blackstone remained at #1 on the list, followed by Millennium Management, which rose six spots from last year to #2. Apollo Global Management, up seven spots, ties with Vista Equity Partners at No. 3. In 2021, Vista tied with Bridgewater Associates at sixth place.
This year, Advent and Bridgewater took fifth place, followed by Ardian, Ares Management, Brookfield, and General Atlantic.
Citing a 2022 McKinsey report, Peregrine attributed alternative managers’ growth in marketing savvy to the growth of private markets over the past decade, as well as a renewed drive for retail investors.
“The largest alternative companies are already building dedicated marketing teams to go to war to win the ‘retail battle,'” the company wrote in the report.
Due to overall growth in private markets, the report also found that 74 percent of alts managers increased their brand awareness – Peregrine’s key metric – amid a three-year decline in the broader wealth management industry.
“You can’t ignore the macro context,” said Josh Cole, co-CEO at Peregrine. “The gap between Blackstone and the others isn’t that big this year, suggesting a number of companies are doing their marketing better.”
Even hedge funds that have had a relatively difficult decade are poised for a resurgence due to the dislocations and opportunities in the current inflationary environment. “What kills hedge funds is ‘business as usual,'” said Cole.
Some of the top-performing companies this year achieved high scores in Website Effectiveness, Google Page 1, and Search Engine Optimization — a manager’s “own channels” that measure positive third-party content appearing on Google’s first page. This is a measure of how well managers are able to drive traffic to their websites. Only eight companies scored 8 out of 10 or higher in this category, while almost half of the companies surveyed came up short (6 out of 10).
Millennium, for example, used its website to attract top talent with a focus on culture, an effort Cole highlighted as one of the most important areas for companies to clarify and shine a spotlight on. “When you think about their website, it’s focused on talent first and clients second.”
Another reason most alternative businesses fell short on their website presence was that they still lacked a clear branding strategy. Part of the problem, Peregrine says, lies in the diversity of investment strategies, asset classes and funds among alternative managers and the clients they serve, which can vary widely in language, region and regulatory requirements.
“But it’s clear that a website that directs people to the right content and helps them find what they’re looking for as quickly as possible can be an incredible asset for managers,” the report says. “Sometimes alternative managers claim that their online footprint is irrelevant, but it should be remembered that Fidelity is searched more globally than Beyonce every month.”