Press Release: Lifting the Lid on the Mysterious World of Third Party Marketing

London/ Dubai, Tuesday 15 June 2021

Key take-aways from the report, entitled ‘Lifting the lid on the mysterious world of third party marketing’, include:

  • More than two-thirds (70%) of Third Party Marketing (TPM) firms work with between three and nine investment  management companies – with 46% of them working with three to five clients
  • 14% of TPM firms raise over $500m in investor capital in a typical year
  • Equity managers represent by far the largest percentage of investment managers for TPM firms, followed by alternative managers and then fixed income managers
  • Half of TPM firms include some sort of retainer as part of their fee model
  • Just over two-thirds (69%) of TPM firms are regulated in at least some of the markets where they promote the investment strategies of their clients
  • 69% of TPM firms have been set up since the financial crisis in 2008, with 15% launched since the start of the pandemic
  • Nearly a quarter (24%) of TPM firms have more than five employees working in their business

Insight Discovery is behind a first-of-its-kind survey on the Third Party Marketing (TPM) landscape, their new report has revealed key trends and dispelled common myths to show this model as a viable solution to the acute fund-raising challenges facing many investment management companies. This ground breaking study was supported by Royal Bank of Canada, Pinsent Masons and GemCap

The input from market practitioners across the UK, Continental Europe, South Africa and the Middle East, shows TPM businesses are growing in number and size, are increasingly focused on being regulated and are more diverse in their asset expertise.

“The TPM model is really making inroads to show why it has the capability and professionalism to match the expertise of an investment manager to interested investors,” said Stuart Alexander, CEO of Gemcap.

These findings shed new light on previous misperceptions that TPM firms are mostly unregulated, transactionally-minded, single-person firms.

“Third Party Marketers are focused on raising capital from target institutions on behalf of their investment management clients. They also enable brand building to help foster longer term relationships,” explained Pat Sanderson, Head of UK and Ireland, Client Coverage at Royal Bank of Canada.

Bright outlook for the TPM model

Recent growth in the TPM segment combined with market dynamics present a promising future for this model to play an increasingly important role for the investment management sector.

For example, outsourcing is ever-more appealing for small to mid-sized investment management companies due to fee pressure and rising costs of doing business, especially in Europe. The costs of setting up on-the-ground operations in new markets are also getting higher. Plus, Brexit has created restrictions that require UK and EU asset managers to look for new ways to market their products in each other’s territories.

“Increasing costs and mounting fee pressure brought about by Brexit and regulatory developments are just some of the challenges facing the investment  management industry at the moment. Finding a new, and potentially, more cost-efficient way to raise assets from different investors is essential, especially for boutique investment firms or anyone wanting to enter new markets,” added Gayle Bowen, Partner and Head of Pinsent Masons Ireland.

The research included a survey conducted by the leading consultancy Insight Discovery, in which 54 Third Party Marketing firms participated. The research also identified 172 TPM companies active in the target markets. The report was initiated and produced in collaboration with Steven de Vries, former Head of European Sales at Janus Henderson Investors.

About Insight Discovery

Insight Discovery is a multiple award-winning consultancy that specialises in market intelligence and strategic communications. We provide solutions and support to major conglomerates, government agencies and many of the world’s largest and best-known financial institutions in all of these areas

For seven years running Insight Discovery has been voted ‘Best Consultancy Firm in the Middle East’ by Global Investor, part of Euromoney