For sales teams at boutique asset management firms, gathering assets and attracting investor attention presents profound challenges in an increasingly saturated marketplace. While some internal salespeople, third-party marketing firms, and placement agents diligently mine existing networks and relationships, others depend on cold calling and generic email outreach to surface new prospects of uncertain quality.

According to Dan Sondhelm, CEO of Sondhelm Partners, an award-winning firm that helps boutique asset managers build brands and raise capital, equipping sales teams with an integrated strategy across content, digital communications, public relations, and actionable data analytics can significantly empower targeted investor conversations while increasing productivity.

“Forward-thinking firms recognise that relying on sales teams to accrue assets organically is no longer realistic with countless options vying for investor attention,” says Sondhelm. “Enlightened boutiques implement modern frameworks to communicate their value across channels – strengthening sales teams in the process.”

This demands a multifaceted approach tailored to resonate with qualified prospects at scale while working with sales efforts targeting high-potential leads. The results may be profound for ambitious boutique shops – increased credibility, visibility, and measurable conversions driving sustained growth.

The power of timely content

One component is thought leadership content that provides investor value. Sondhelm observes that “too many firms churn out generic, dated materials instead of timely insights and perspectives audiences crave.”

He advocates a content-centric approach tailored to target buyer needs and pain points. “Educational, audience-focused content acts like a magnet, guiding the right prospects to explore firms’ offerings instead of continuing an endless manager search.”

Public relations builds credibility

Sondhelm points to public relations as instrumental for growth. “Earning media coverage, speaking opportunities, and awards build valuable third-party validation. The news media may turn firms’ principals into quoted industry experts and recognised thought leaders.”

Showcasing the content and news media endorsements digitally and with your sales team captures investors’ attention. Sondhelm states, “This credibility flows through all marketing channels, cementing credibility and positioning.”

Optimising digital

Sondhelm stresses that an optimised digital presence is vital for boutiques’ viability and vitality.

This translates into a high-functioning website built to facilitate conversations and generate leads. Integrating email and social campaigns nurtures audience relationships toward conversions.

Importantly, digital marketing can equip firms with and without sales teams. For those with, analytics provide intelligence to initiate warmer prospect conversations and predict the highest sales-ready candidates. For those without, thoughtful content, social media and conversion-focused web design allow fully leveraging online channels to build credibility and gain prospects.

The ultimate goal is guiding high-potential individuals into a firm’s sales process for closes or client servicing.

Empowering growth

Sondhelm states: “Many boutique firms recognise that an integrated framework combines marketing, branding, and sales – along with performance and client service to propel sustainable growth.”

For ambitious boutiques, implementing a cohesive strategy across content, public relations, digital, and data analytics is imperative to empower sales teams, elevate credibility, expand reach, and scale growth.

By following this game plan, boutiques can stand out with compelling positioning and stories that captivate the right investors – leading to sales team support and growth. The modern boutique playbook demands enlightened action. 

Standing in for IAM editor, Gill Wadsworth, Beverly Chandler, managing editor of Chandler Publishing, said that the asset management industry had faced a number of headwinds over 2023, and described the service providers supporting institutional investors as the backbone of the industry, holding the whole thing together.

In a week the Institutional Asset Manager Awards 2023 report will be released, with interviews from some of our winners and pictures from the awards’ event. Many congratulations to all our winners.

The winners in the 2023 Institutional Asset Manager Service Provider Awards, 2023 are:

Some 88 per cent of the professional investors interviewed have, in the last six months, increased their allocation to assets and investment products that aim to provide a hedge against inflation. The survey captured the views of investors who collectively manage in excess of USD300 billion in assets under management.

Almost 85 per cent of those surveyed said they expect the funds they manage to increase allocations to asset classes and funds which help combat the threat of inflation, with 20 per cent stating this allocation will increase dramatically.

In terms of which asset classes they will increase their allocation to, 71 per cent highlighted inflation-linked fixed income ETPs, Tabula says. 

“Inflation is one of the biggest threats facing investors. It is not surprising to see so many professional investors taking positive steps to tackle the challenge. The issue is that although current inflation is high, long term inflation expectations are still range bound. If investors conclude that inflation is here to stay, then the landscape could change dramatically,” says Michael John Lytle, CEO of Tabula Investment Management.

“There is deep concern that we are entering a new era of persistently higher inflation,” says Tabula CIO Jason Smith. “Trade freedom is in decline, while ‘greenflation’ and the Ukraine conflict are driving energy prices and food input costs higher. Central banks are rising to the challenge, but the question is whether monetary policy can tame inflation caused by stark supply-demand imbalances.” 

FTX Ventures’ writes that its investment will provide SkyBridge with additional working capital to fund growth initiatives and new product launches. Further, SkyBridge will use a portion of the proceeds to purchase USD40 million in cryptocurrencies to hold on its corporate balance sheet as a long-term investment. SkyBridge remains profitable and debt-free, notwithstanding market conditions, the firm writes.

The deal is the latest collaboration between SkyBridge and FTX, following the multi-year partnership to sponsor global SALT conferences in North America, Asia and the Middle East, and co-present Crypto Bahamas, the institutional digital assets conference that launched in April 2022. The firms write that they will expand their collaboration on venture and digital asset investing across current and future product offerings.

“Sam is a visionary who has built incredible businesses that are synergistic with the future of SkyBridge,” says Anthony Scaramucci, Founder and Managing Partner, SkyBridge. “Our business has continued to evolve since we founded the firm in 2005. We will remain a diversified asset management firm, while investing heavily in blockchain.”

“After working with Anthony and his team following our SALT conference partnership, we saw there was an opportunity to work closer together in ways that could complement both our businesses,” says Sam Bankman-Fried. “We look forward to collaborating closely with SkyBridge on its crypto investment activity and also working alongside them on promising non-crypto-related investments.”

Farrell worked in direct private equity investing at 3i, TDR Capital, TPG Capital and Goldman Sachs and has an MBA from Harvard Business School and a BSc from Trinity College Dublin. 

Snowball writes that it is a leading impact investing fund which demonstrates measurable social equity and environmental impact, whilst achieving competitive returns. 

“We are delighted to add Sean’s expertise and he joins Snowball at a key stage, with greater investor demand than ever before. Snowball’s investors are increasing their allocation and our investor base continues to expand as more asset owners realise that values-aligned investment strategies are delivering compelling risk-adjusted returns,” says Daniela Barone Soares, CEO, Snowball. 

“Snowball is an innovator in applying a robust financial risk and return approach and combining this with a best-in-class impact framework to deepen the quality of decision making in selecting and managing investments. I am excited about the opportunity to develop Snowball’s investment approach and portfolio further, and to enhance the risk-adjusted returns and impact for Snowball investors,” says Sean Farrell, Investment Director, Snowball. 

“Investment no longer serves society, but there is a better way. Placing equal emphasis on generating good financial returns and positive impact is the future of all investing,” says Alexander Hoare, Chair, Snowball.

Snowball will shortly publish an independent verification of its impact methodology and impact practices. The firm writes that this is believed to be the first time an asset manager will put the full findings of an impact audit into the public domain.

 The report looks at this burgeoning asset class through the lens of a recent search for ‘impact real estate’ managers on behalf of a UK Local Government Pension Scheme (LGPS) fund.

The firm writes that this pension scheme was introducing a dedicated allocation to ‘impact’ investments—a step that many other pension funds in the UK and internationally have been taking in 2021-22. Their hunt for an external manager partner revealed well over 50 strategies offering impact—particularly social impact—in UK and European real estate, many of which have been launched within the past year. In addition, the report reveals additional managers keen to launch new funds with the appropriate seed capital.

Bfinance writes that many of these ‘impact’ real estate strategies claim to provide investors with financial returns that are commensurate with conventional real estate strategies while also tackling issues such as poverty, regional deprivation, social housing shortages and insufficient social care provision. For pension funds, the appeal is enhanced by long-term contracted cashflows, government backing on many of the relevant contracts, and a considerable degree of inflation sensitivity.

bfinance’s report lists six varieties of impact real estate strategy: three with a focus on housing and three with a non-housing or broader remit. The housing strategies include (discounted/affordable private rental sector housing, ‘multi-tenure’ social/affordable housing, and supported housing. The ‘non-housing’ strategies include community regeneration, social infrastructure and healthcare. Over time, the report notes that there has been a shift from social housing strategies (which dominated launches in 2016-17) to more varied strategies (more popular among the launches in 2021-22). This shift coincides with a change in the investor base: more financially-oriented institutions (such as pension funds) have entered a space formerly dominated by entities that were prepared to accept lower returns (such as certain charitable foundations).

Core and core-plus ‘impact real estate strategies’ are targeting overall returns of 5-10 per cent p.a. net of fees and yields from 2-6 per cent. These expectations are broadly in line with conventional real estate strategies. However, returns can be affected by factors such as forward funding, specialisation and the level of leverage used. In comparison against the broader real estate market, the MSCI UK Property Index has delivered a 6.4 per cent p.a. net total return over the past five years, while the ODCE PanEuropean Core Index has delivered a 5.7 per cent return. Investors can also expect fees for impact real estate strategies to be slightly higher.

The report also lists five key risks that investors will face in core/core+ ‘impact real estate’ strategies that they are unlikely to encounter—or, at least, not to the same degree—in conventional real estate strategies seeking similar levels of return. These include: development risk, regulatory/policy risk, partner/counterparty risk, capital raising risk and ‘impact delivery’ risk. Investors that may tend to avoid or minimise development risk in their mainstream direct real estate equity investments, for example, will be far more likely to take on development risk in impact strategies in order to demonstrate ‘additionality’ (a positive impact that would not have happened without that investment)

The report also considers the subject of inflation, which is proving increasingly crucial to analysis of investment opportunities in 2022. The firm writes that in an inflationary environment, investors can find some comfort in the inflation-linked characteristics of many of the income streams in the housing and healthcare sectors, once yields are in place.

“Yet, while managers can try to bolster the inflation-sensitivity of returns, those shifts should be weighed against the impact being generated. For example, managers can move towards more traditional PRS-style housing (where rent rises are more likely to be linked to CPI), but this can arguably dent the social benefits of their investments. High levels of inflation may also exacerbate tensions with regulators: while rents may be linked to inflation, housing benefits (in the case of ‘social’) and wages (in the case of ‘affordable’) may well fail to keep pace. Rising interest rates can also create challenges for strategies that employ a greater degree of leverage, and inflation can exacerbate development risks as raw materials and labour become more expensive.”

Nikki Howard, Associate at bfinance and the report’s co-author, says: “We are excited to be able to share this analysis, which really showcases the dramatic growth in the number and variety of real estate strategies that deliver impact alongside credible financial returns. We see more and more financially-oriented investors across different parts of the world, such as pension funds and endowments, that are entering dedicated ‘impact’ strategies in 2022 – not just in real estate of course but in private equity, listed equities and more. The roster of managers is far deeper and more credible than it was even three years ago, which is a great thing. But it is extremely important to apply sharp scrutiny during manager selection in order to manage the risks involved. We’ve dedicated the second half of this report to a discussion of some of the distinct risks in this sector: these risks have already tripped up a number of asset managers and their investors, as shown in some instructive anecdotal examples.”

Russia’s invasion of Ukraine sparked a seemingly unprecedented, united response from the West, consisting of a barrage of economic sanctions on Russia. Never shy to offer predictions, commentators quickly sounded the death knell for globalisation and the reserve currency reign of the U.S. dollar.

While many financial commentators are prone to hyperbole, history provides a more sober perspective.

An examination of the history of sanctions reveals that nothing unleashed in response to the Ukraine assault is new and that the long-term efficacy of sanctions remains mixed at best.

And while it’s difficult to gauge the implications of the latest round of sanctions in real-time, interesting historical parallels could help provide much-needed context.

From Herodotus to Hussein: Economic sanctions have a long history. Economic coercion has long been a key tool for warring states. For example, in the Peloponnesian War, Thucydides’ account of rival city-states in Greece includes a story of Athens’s commercial ban against the Greek port city of Megara’s merchants in 432 BC – perhaps the first recorded case of economic warfare.

In more modern but no less barbarian times, the nightmare of the First World War inspired hope for “economic sanctions” as an alternative to military aggression. U.S. President Woodrow Wilson described economic sanctions as “something more tremendous than war.” Sanctions could create “an absolute isolation… that brings a nation to its senses just as suffocation removes from the individual all inclinations to fight.”

However, this “alternative to military aggression” would not be possible without the interconnectedness of the global economy.

The First World Economic War

The reason economic sanctions were possible in 1914 was globalization itself. In fact, the decades leading up to the First World War marked the first golden age of globalisation. Trade’s share of global economic output increased from about 5 per cent in 1850 to 14 per cent in 1913.

However, trade statistics don’t do the story justice. Instead, let’s examine one example of a critical material: steel.

On the eve of the First World War, Germany was a world leader in steel-making. But there was a catch: Germany remained utterly dependent on manganese imports (a key input in steel production), consuming 25 per cent of the annual world production of manganese.

Getting manganese was no simple task. Consider the example of Krupp, a German steel company.  Acquiring more manganese involved a complex chain of transactions.

First Krupp used a London agent to place orders from one of the many global mining companies clustered there.

Itabira, a mine in the state of Minas Gerais in Brazil, was owned by the British Itabira Iron Ore Company. Once Itabira Iron Ore’s sales desk in Rio received a “bill of exchange” on behalf of Krupp from the Banco Alemán Transatlántico, Deutsche Bank’s subsidiary in Brazil, the miners got to work.

Manganese was extracted, loaded on a railroad car, and sent along a railway to converge with bigger cargo trains that carried the manganese 300 hundred miles (500 kilometres) southeast to Rio de Janeiro on the coast.

From Rio, it took three weeks to reach Rotterdam by steamboat, where the cargo transitioned to another railcar, onto a boat, and then another 130 miles to Krupp’s plant in Essen.

Steelworkers in Germany could then finally fire up the blast furnaces to smelt manganese and iron ore into the final stainless-steel product.

Phew! Simple enough? There’s more.

The British Financial Insurance Nexus

Any cargo loaded onto steamships out of Rio and hauled across the ocean had to be insured. Lloyd’s, the world’s foremost marine insurer, covered most of the steamboats that transported products. Those steamers also needed fuel.

So British coal traders bought and sold coal to steamers worldwide. Like gas (petrol) stations that dot (some say, scar) our landscape, on the eve of the First World War, about 25 million tons of coal was stored in British- controlled depots from the Falkland Islands to Gibraltar and beyond to make sure fuel was ready and available for vast sea voyages.

Finally, there was payment.

The delivery process took an average of six weeks. The “bill of exchange” issued by Deutsche Bank’s subsidiary was effectively a “promise to pay” once the shipment was received. With a large bank like Deutsche Bank as the underwriter, though, the bill of exchange was as good as cash and could be sold or borrowed against in the London money markets. Moreover, Britain was in a unique position as the centre of the global economy leading up to World War I with 60 per cent of the world’s trade flowing through its discount market.

Put another way, a large share of global savings was entrusted to Britain, its money markets, and the pound sterling to invest capital and earn a return, effectively financing the entire global economy. The US and its currency play a similar role today.

Swift 1.0?

So why are we retelling a story about a dizzying array of steps required to make the world work?

Armed with our German steel story, aspiring financial blockaders of 1916 used mining company officials and bankers in London to thwart enemy activity. Britain effectively leveraged its limited personnel by transferring enforcement responsibility to financial institutions themselves!

From May 1916, banks in Allied countries were made to sign guarantees that their accounts would not be used “for any business which will in any way, either directly or indirectly, assist or be for the benefit of an enemy of Great Britain or her Allies.”

Furthermore, blacklisting, prosecution, and forced closure were held over the heads of London’s private bankers. The Finance Section of the UK government created its intelligence-gathering network by tapping select banks to report their weekly flows to and from neutral countries.

From May 1916, banks in Allied countries were made to sign guarantees that their accounts would not be used “for any business which will in any way, either directly or indirectly, assist or be for the benefit of an enemy of Great Britain or her Allies.”

Furthermore, blacklisting, prosecution, and forced closure were held over the heads of London’s private bankers. The Finance Section of the UK government created its intelligence-gathering network by tapping select banks to report their weekly flows to and from neutral countries.

Moreover, because orders to transfer money and securities were sent by post or by telegram, a financial blockade was in effect a communications blockade: whoever controlled postal routes and undersea telegraph cables controlled payment flows.  Communications interruptions effectively severed enemy banks from the global financial system— and, conveniently, Britain operated 70 percent of the global telegraph cable network!

Far from ending globalisation, the World War I era economic warfare “worked” only because the world was globalised.

The Thought that Counts?

Sadly, the economic sanctions track record is not a good one. The “economic war” went on long after the physical fighting of the First World War ended. The League of Nations mobilised 52 out of 58 member states to punish Italy’s 1935 invasion of Ethiopia. Undeterred, Mussolini won that war and realised acquiring more territory was needed to offset future sanctions!

Germany and Japan were also inspired to conquer in order to counteract sanctions or pre-empt them altogether. Later, when the US abruptly cut off oil supplies to Japan and redirected them to Russia in July 1941, the stage was set for Pearl Harbor, and America joined the war shortly after.

Moreover, sanctions have since been used frequently—in some cases, levelled on countries for decades—but with limited effectiveness.

Despite their limited historical success, we cannot escape the fact that sanctions have a certain appeal. Wouldn’t it be nice if instead of bullets and bombs, blockades and blacklists sufficed?

The Death of Globalisation?

So, what does history mean for the present conflict? Does de-globalisation loom? Will the US dollar be supplanted? Instead of predictions, we offer historical parallels.

First, while 1840 to 1914 marked the first heyday of globalization, the two world wars did not mark an end to globalisation. Instead, a new global regime fostered trade and cross-border investment like never before. The new regime, though, was based on the dollar system and the U.S. military serving as “global police.”

The period from 1950 to 1973 featured rapid economic growth in almost every country on Earth, with the average annual global growth rate and per capita gains nearly 2.5 times the much-vaunted 1850 to 1913 era. The value of export goods as a share of the global economy rebounded from a post-World War II low of 4 per cent to 14 per cent by 1974, similar to the 1913 number as a share of GDP but on much higher trade volumes.

Globalisation took another leap after 1973. International trade as a share of GDP rose from 30 per cent in 1973 to 61 per cent in 2008 on a six-fold increase in international trade. Most of that increase happened since 1999 and with the rise of China as a major global economy.

For a less abstract perspective, consider that the post-1973 globalisation wave meant tripling the weight of goods shipped. In 1975, China had no container traffic, and U.S. and Japanese ports accounted for half of the global activity. By 2018, China accounted for one-third of international shipping, with the combined U.S. and Japanese shares falling to 10 per cent.

If indeed there is another globalisation wave, it could be an unbundling of China as the global shipping source and the use of a wider array of countries for production and input, which could lead to more cross-border flows, not less.

While we’ll stop short of calling globalisation a relentless force, it is similar to the force that stops you, dear reader, from reshoring all production within the bounds of your household.

Why don’t you? Well, put simply, you’d be vastly poorer if you did, not just due to the limited resources in your garden or know-how of production, but the scarcity of time—there are only 24 hours in a day. Instead, you specialise, and when everyone does so on a global scale with a truly global market, we call it globalization because it spans political borders.

So, what has history taught us about this latest act of physical and economic aggression?

First, all warfare is economical. Without interconnected supply chains, countries cannot access the materials they need to wage war nor can they inflict as much economic pain.

Second, the latest round of sanctions is not unprecedented. The names and details are different, and trade is more complex today, but the dawn of economic sanctions in the First World War mirrors much of what has been implemented in 2022, right down to the SWIFT messaging network cutoff used against Russia.

Third, the reimplementation of sanctions will not end globalisation. Geopolitical tensions may slow the growth of international trade, but they rarely stop it for long.

And lastly, unless the USD money markets find a new rival (as the mighty dollar rivalled sterling in the 1920s and onward), the end is not nigh for the dollar’s reign.

A 27-year SEI veteran, Ewing will continue to report to CEO Ryan Hicke and brings more than 40 years of financial services experience, spanning the wealth management, trust, custody, and securities servicing industries.

SEI Family Office Services delivers technology and outsourced services, including the Archway PlatformSM, that support the accounting, investment management, and reporting functions of family offices, private banks, private wealth advisors and alternative asset managers. SEI Regulatory Services helps investment managers and institutions meet reporting and compliance requirements for pooled vehicles, alternative vehicles, separate accounts, sovereign wealth funds, family offices, and more—benefiting from a unique data warehouse approach, team of industry experts, and a single comprehensive platform.

Ewing says: “The demand for digital transformation, transparency, and compliance continues to place pressure on financial intermediaries to keep up while scaling their businesses. The industry is ripe with opportunities to help our clients embrace change, stay ahead, and make confident decisions for their futures—and their investors’ futures. I’m excited to leverage my four decades of experience in this new role and contribute to the next chapter of SEI’s growth story.”

Commenting on Ewing’s appointment, Hicke says: “As technology and asset management increasingly become inextricably linked, we’re focused on solving our clients’ most complex challenges, meeting their emerging and converging needs, and helping them transform their businesses. Sandy’s perspective and experience navigating the ever-evolving financial services landscape will be critical in identifying opportunities and maximising our capabilities to help them meet the demands of today and tomorrow. I’m confident that her leadership, paired with the deep expertise of our workforce, will continue to help drive growth in the markets we serve and beyond.”

Ewing previously served as Head of TRUST 3000 for SEI’s Private Banking business, leading business development, relationship management, service delivery, and project and solution management. She also serves as a board member for the SEI Private Trust Company. Prior to joining SEI, Ewing built her career through management positions at two large regional banks.

Among strategies, long/short equity recorded the highest return of 2.2 per cent, supported by the improvement in risk sentiment due to the strong rebound of the global equity market.

Relative value (1.6 per cent) and multi-strategy (1.6 per cent) also rebounded in July, following three consecutive months of decline, totalling 4.0 per cent and 3.4 per cent, respectively, in Q2.

CTA/managed futures (6.5 per cent) is the only top-level strategy with a positive return YTD. By contrast, long/short equities (-7.3 per cent), fixed income (-4.1 per cent) and event-driven (-5.1 per cent) remain firmly in the red as risk aversion remains high amid continued macroeconomic uncertainty.

Returns were varied across sub-strategies in July, with long-bias (4.2 per cent), AI (1.3 per cent) and FX (0.1 per cent) recording positive returns while the remaining strategies declined. Trend-following recorded the steepest decline of 4.2 per cent in July but remains the top-performing sub-strategy YTD.

Positive returns were reported across most investment regions in July, with Asia the only exception as it declined 0.5 per cent. North America was the best-performing region with gains of 2.5 per cent in July.

Funds focused on North America (2.5 per cent) and Europe (1.3 per cent) recovered in July following declines of 5.9 per cent and 4.5 per cent, respectively, in Q2. North American and European hedge funds have pared YTD losses to 5.1 per cent and 7.0 per cent, respectively.