Bridgewater Associates may be the world’s largest hedge fund firm, but at $150 billion in assets, it's dwarfed by many traditional investment companies.
Yet Ray Dalio, the founder, is mentioned more often in the media than State Street Global Advisors and Natixis Investment Managers combined, according to new research from Peregrine Communications. The firm studied the 100 largest global asset managers’ brand power and marketing efficacy, including via mentions on social media and Google search.
The report, released Wednesday, gave Bridgewater high scores in almost every marketing category that Peregrine measured — except media sentiment.
“The firm arguably suffers by an excessive weighting of reactive commentary and the very large presence and quotability of founder Ray Dalio,” wrote the authors of the report, who examined 12,000 data points as part of the study. This “illustrates the challenge of maintaining the quality of media coverage when a firm has a superstar spokesperson,” the authors continued.
In the study, Peregrine explained that firms with top media sentiment scores generally use a “restrained” approach to press or generate higher quality content than peers.
“As it becomes harder for investors to differentiate between managers, negative news flow only makes it easier for investors not to choose a firm that has been in the news for the wrong reasons. Peregrine’s research shows a clear connection between those firms which have very high volumes of media coverage and resulting low media sentiment scores. This is an area where even firms that perform outstandingly across the board can fall down and these cases can be instructive,” according to the 2019 report.
“There is a balance between prioritizing positive sentiment and increasing share of voice. That said, I would argue that Dalio is still a phenomenal performer based on the disparity between Bridgewater’s AUM and its first rate brand awareness,” said Josh Cole, head of analytics at Peregrine, in an interview Tuesday. “However, obviously as we say in the report, being a superstar spokesperson also comes with its own challenges.”
According to the communications firm, Natixis had 27.2 percent of Tier 1 media mentions between August 2018 and August 2019; State Street Global Advisors represented 28.5 percent of the mentions, and Ray Dalio represented a whopping 44.3 percent of the total.
Overall, the Peregrine study found that the top 10 asset managers based on marketing are also among the largest managers. BlackRock tops this list, followed closely by T. Rowe Price, Fidelity Investments, and J.P. Morgan Asset Management. But after the top 10, the best marketed firms are not necessarily the largest. The study ranked each firm against peers on 10 measures that include brand awareness, media sentiment, first-page Google results, and paid search.
“Outside the top 10, and into the top 20, you start to see sophisticated strategies from firms that are at the bottom end of the 100 [in terms of assets under management], like Bridgewater. Look again at Ray Dalio’s personal brand,” said Cole.
Others in the second group include Scottish firm Baillie Gifford, Brookfield Asset Management, MFS Investment Management, and Putnam Investments. The report noted that Putnam is one of only four firms in the study to develop the ability to reach investors through Alexa, the smart speaker.
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Max Hilton, managing director at Peregrine who was involved in the research, highlighted the success of a campaign called Actual Investing from Baillie Gifford, a traditionally quiet and conservative Scottish firm.
“What definitively separates the wheat from the chaff is the intuitive understanding of ‘pattern interrupt’ moments — those campaigns that redefine a firm’s corporate story,” said Hilton.
“I always thought of them as a fairly dour, fairly uninteresting long-only Scottish based firm,” Hilton said. “But the firm is one of Tesla’s biggest outside investors and one of the biggest institutional managers in the tech space. People didn’t know that. The Actual Investing campaign is cheeky, riffing on the very boring active-passive debate,” he said.
“There’s a clear connection between those firms that outperformed the most and being much more likely to grow assets,” said Cole. “When looking at the group as a whole, you can toss a coin to determine if they did or did not increase AUM last year. But 80 percent of the outperformers grew AUM last year.”
Still, almost two-thirds of asset managers are suffering from investors’ declining interest in their brands, according to the report.
According to the report, 61 percent of asset managers had no increase in search volume or saw a declined in organic Google search between August 2018 to August 2019.