How best to communicate to institutional investors - France

Asset managers are considered the most reliable source of information by French institutional investors

Key points:

• Asset managers are considered the most reliable source of information and this sentiment has significantly increased since 2015
• Events are the preferred channel of communication, followed by blogs and newsletters
• Sustainable investing is the investment trend that is most likely to grow, with 83% of respondents planning to increase their ESG investments

French institutional investors consider asset managers the most reliable source of information and this sentiment has significantly increased since 2015, according to a survey by Fundamental Research.

Respondents indicated that they would like asset managers to be more transparent and honest in their communication, and they would also prefer more timely, clearer and more efficient communication. In comparison with other countries, institutional investors in France are the most vocal about asset managers' sales approach. Institutional investors in France have expressed that they feel overwhelmed by an overload of inadequate information from pushy salespeople. Instead, they would only want to be contacted directly with information specifically targeted to their needs. The latter is in line with the feedback from institutional investors across the other researched countries.

Events can also be a good way of engaging with French institutions especially on specific topics such as ESG as more than half of respondents attend asset manager events. Furthermore, events are the preferred channel of communication for the majority of respondents, followed by blogs and newsletters.

Similar to all other European countries surveyed, sustainable investing is the investment trend that is most likely to grow, with 83% of respondents planning to increase their ESG investments over the next year. Overall, climate change is also the most important trend affecting French institutional investors' investment strategy. It is therefore not surprising that ESG is an attribute associated with the asset managers that respondents are planning to increase their exposure to as well as the ones who are perceived to have standout communication.

Manager selection criteria

Between September 2019 and March 2020, Fundamental Research surveyed institutional investors in the Netherlands, the UK, Switzerland, the US, Germany, and France about their views on global trends, asset manager communication, manager selection, their media consumption habits, and their top asset manager brands.

For French institutional investors, performance/track record, investment team, and strategy/investment process are the top three asset manager selection criteria for both stages (i.e. establishing the long list and shortlist), and the attributes strongly associated with the asset managers they are planning to increase their exposure to.

In stage 1 of the selection process (i.e. discarding unsuitable managers), size of the company/AUM is the most important factor for one out of four respondents and is among the top three criteria for almost half of them. As French institutions on average manage a significantly larger AUM than their counterparts in other European countries surveyed, they probably have to discard small asset managers from the outset, which could explain the importance given to this factor.

Other findings from our French Institutional Investor Research include:

• The ongoing low-interest rate environment has prompted French institutions to change their strategic asset allocation and this has resulted in an increased portfolio diversification as well as more investments in illiquid assets to generate returns.
• The perception of sponsored editorial content has improved since 2015 and – even though the vast majority are aware of the potential bias – most respondents would read it as long as it adds value. Asset managers could use this information to sponsor high-quality content rather than articles that are too sales-focused.
• French institutional investors use fund ratings more often than their counterparts in the other countries surveyed even though they use them less than wholesale intermediaries (i.e. discretionary portfolio managers and fund selectors).
• Almost all French respondents (92%) are using social media for professional purposes, especially LinkedIn. Compared to wholesale investors, they tend to access them more via mobile devices.

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