Filed Under:Life Insurance, Life Planning Strategies

Asset managers are staffing up to support alternatives

Forty-seven percent of asset managers intend to dedicate more personnel to marketing alternatives within the next year.
Forty-seven percent of asset managers intend to dedicate more personnel to marketing alternatives within the next year.

With alternative asset classes outpacing traditional vehicles in popularity among investors, it’s no surprise that asset managers are increasingly directing their energies at alternatives. Indeed, nearly half of asset managers now expect to hire additional marketing personnel to support alternatives, according to new research.

Cerulli Associates discloses this finding in the November 2013 edition of “The Cerulli Edge: U.S. Asset Management.” The report examines trends among product management teams, alternative investments and third-party intermediaries.

The report indicates that 47 percent of asset managers intend to dedicate more personnel to marketing alternatives within the next year. Smaller but still substantial percentages plan to hire staffers for these areas:

  • Alternative investment sales (41 percent);
  • Alternative analysts, investment management (41 percent);
  • Alternative product management (24 percent);
  • Alternative portfolio specialists (24 percent);
  • Head of alternatives, product management and development (12 percent).

“During the past year, firms have hired more dedicated sales professionals than any other alternatives-related position,” the report states. “According to Cerulli data, the number of sales staff dedicated to alternative products increased 54 percent from 2012 to 2013 among managers that distributed alternatives to both retail and institutional clients.”

The research adds that small asset management firms tend to have more employees dedicated to alternative investments than do large firms. This is true, for example, of the following positions:

  • Head alternatives and investment management (89 percent among small firms vs. 57 percent among large firms);
  • Dedicated personnel for selling alternatives (100 percent vs. 14 percent); and
  • Head of alternatives, product management/development (78 percent vs. 14 percent).

Almost nine in 10 (88 percent) asset management firms surveyed say they expect to create four or more alternative products for the U.S. retail third-party market. Whether these firms succeed in the alternatives space, the report cautions, will depend as much on execution of strategy as on their investments in support of alternatives.

“To excel in the alternatives realm, firms need to ensure that all organization resources involved in their alternatives platform collaborate to support the business,” the report states. “The inherently complex nature of these products requires a consolidated effort from product developers, marketers, analysts, specialists and sales teams — regardless of whether these individual team members are housed in a centralized group.”

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