Chestnut Advisory Group Reveals How to Attract and Retain Investors

NEW YORK, Oct. 8, 2014 /PRNewswire/ -- Chestnut Advisory Group, an investor relations consulting firm serving the asset management industry, today released a whitepaper titled, "Your Performance Doesn't Really Matter:  What Successful Asset Managers Do Differently" which finds that contrary to popular belief, performance is not the primary driver of asset flows. Reporting on the results of a survey of institutional investors, conducted in partnership with Rivel Research Group, the whitepaper also analyzes investment performance and asset flow data for 931 asset managers over the past seven years.

Key Findings:   

• Investment performance is not the primary driver of asset flows: It may be an industry assumption that positive capital flows follow strong investment performance, but Chestnut's analysis shows that asset managers who delivered the best investment performance did not raise the most capital. In fact, the best investment performers raised less than a quarter of the capital received by the best capital raisers. The correlation between investment performance and capital flows is surprisingly low: between 0.04 and 0.24 for the asset classes examined.
• Asset managers with a strong focus on educating investors about exactly what they are doing with their client's money see a substantial return on their investment in IR: Asset managers that "got investor relations right" brought in an additional $133 billion AUM over the seven-year period studied. Chestnut found that investor education breeds trust, and trusted asset managers are hired 3-12 months more quickly and fired 3-12 months more slowly.
• Ninety-two percent of investors in Chestnut's survey view IR as integral to an asset manager's mission: The top five factors cited by investors as driving their decision to hire an asset manager all come from the new educational approach to IR. 

1.	Strong understanding of the asset manager's investment process (important  to 95% of respondents)
2.	Asset manager credibility (89%)
3.	Strong understand of the firm's risk management (82%)
4.	Clear and consistent communications (77%)
5.	Confidence in the firm's business structure and incentives (77%)

"The asset management space is experiencing consolidation while the competition for and cost of acquiring loyal investors increases," said Amanda Tepper, CEO and Founder of Chestnut Advisory Group. "For middle market asset managers, the best way to even the playing field against larger firms is to ensure they have a strong IR program to build and foster investor trust, which ultimately helps drive and retain assets."

Your Performance Doesn't Really Matter: What Successful Asset Managers Do Differently is available for download here.

About Chestnut Advisory Group
Chestnut Advisory Group was founded in 2014 by CEO Amanda Tepper, formally Global Director of the Senior Portfolio Management team at AllianceBernstein. Chestnut Advisory Group specializes in creating and implementing comprehensive investor relations programs for asset management companies. Chestnut Advisory Group provides all four key components of IR for asset managers: deep capital markets expertise, effective investor communications, real world understanding of the institutional investor marketplace, and sound counsel.

SOURCE Chestnut Advisory Group

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