From tennis players’ sleeves to book sleeves, fund management company logos adorn a range of products and sports stars. Not all exposure gained from sponsorship is welcome though — as shown by Man Group’s decision to end its relationship with the Booker Prize.
Man put more than £25m into the Booker literary awards over 17 years but last month said it would sever its ties. The UK-listed hedge fund said the money would go instead to charities and initiatives to improve diversity in the investment industry.
The Man Booker arrangement was not without controversy. Author Sebastian Faulks last year described Man as “the enemy” on a popular podcast, saying: “The Man Group are not the sort of people who should be sponsoring literary prizes. They’re the kind of people literary prizes ought to be criticising. I wouldn’t feel happy about accepting money from them.” Man did not comment for this article.
Sponsorship deals can help fund managers build their brand and align them with successful individuals or worthy endeavours. Such deals are under close scrutiny, though. They are costly when budgets are tight and can carry reputational risk. Marketing heads are now asking if the benefits are worth it.
“Many asset managers wrestle with how finely sponsorships can be measured, if at all, in terms of marketing efficacy and return on investment,” said Gabriel Altbach, founder of Asset Management Insights, a consultancy.Sport is the traditional area used for fund manager promotion. Not only are logos prominent but events give executives a chance to entertain clients and rub shoulders with their sporting heroes.
The 2017 Standard Life and Aberdeen Asset Management merger brought together two of the UK’s biggest sporting sponsors in investment management. Standard Life’s 2014 deal with tennis player Andy Murray was worth £4.5m while Aberdeen had just begun a three-year deal with Britain’s America’s Cup yacht team.
The combined group still has a range of sport sponsorships, including golf’s Ryder Cup, Scottish Open and Ladies Scottish Open; rugby’s London Scottish team and the Melrose Sevens tournament; 27 skiing schools, and Gordon Reid, the wheelchair tennis player.
Standard Life Aberdeen also has several cultural deals, including the Edinburgh International Festival. The company gives four reasons for its deals: to build the brand in new markets, contribute to the local economy, promote staff engagement through offering tickets and run partner initiatives. One example of the latter is SLA’s gender summit, which coincides with the Ladies Scottish Open.
Putnam Investments, the Boston fund company, concentrates its marketing dollars on sport in Massachusetts. Its deals include New England Patriots, winners of last week’s Super Bowl, Boston Celtics basketball team, New England Revolution football team and the US Ski and Snowboard Association. It also backs golfer Keegan Bradley and ski racer Ted Ligety.
On its website, Putnam places these sponsorships under its Performance in Motion brand and says: “In business and sports, success is fuelled by a commitment to teamwork, focus on performance and dedication to winning.”Another finance group to spend heavily on sport is Investec, the South African-UK lender. Its logo has been seen in rugby, hockey, golf and horseracing. It also backed Tottenham Hotspur football club. Now, however, its asset management business is set to be spun off from the wider group and it has shunned sport deals in favour of a tie-up with Tusk, a conservation charity.
Investec Asset Management began its relationship with Tusk, whose patron is the Duke of Cambridge, six years ago. The company recently committed to the partnership for 10 more years. “As a long-term asset manager, our purpose is to invest for a better tomorrow. Our support for conservation and for these awards is central to that purpose,” said David Aird, managing director of Investec AM’s UK client group.
The Tusk deal highlights how marketing heads are looking for more diverse initiatives. While sport allows fund managers to align themselves with successful teams and individuals, cultural, social and environmental tie-ups offer the chance to be affiliated with intellectual or worthy causes.
“Many asset management executives will privately admit that sport sponsorships can turn into boondoggles of epic proportions,” said Mr Altbach. “The tickets for sporting events usually end up getting used by family and friends of employees and sometimes can’t even be given away internally, as for compliance reasons many clients can’t accept the invitations.”
When Old Mutual Global Investors rebranded as Merian last year, it announced a partnership with Shakespeare’s Globe, the re-created theatre that is a London tourist attraction.
Marcus Bolitho, head of marketing at Merian, said sport sponsorships did not appeal as they tend to be expensive, with other companies competing on deals. He said regulators have clamped down on corporate hospitality and this has made certain events less attractive. “The rationale for going into sports was that you could take financial advisers to events — but regulations have changed that,” he said.
He said the Globe is popular not only in the UK, the core Merian market, but also in the US, Singapore and Hong Kong, where the company hopes to win business.
Mr Bolitho said the decision to choose a cultural rather than a sporting partner was not about attracting different types of customers. “The people who go to the Globe are not that dissimilar to those who go to the cricket or the rugby but we are talking to them in a different environment,” he said. “It’s more contemplative, which suits us.”
This spring will mark the 10th anniversary of the sponsorship of London’s Chelsea Flower Show by M&G, the UK investment business. The event attracts more than 150,000 people each May and is a premium event for champagne-fuelled networking.
The company said that those at the show are a close match to its customer base and the analogy of years spent tending a garden is a good fit with its image as a long-term investor.
Even Chelsea has suffered from the crackdown on lavish corporate entertainment. The number of show gardens has halved because of sponsors pulling out, while financial services companies find it harder to invite clients because of anti-corruption rules.
“Even with the changes to the hospitality rules, our sponsorship of the Flower Show remains a valuable means of engaging with a wide range of people who are important to our business, including customers who choose to invest their savings directly with us,” the company said.
Despite Man Group ending its association with Booker, at least one fund manager still has its name on a literary prize. Baillie Gifford, the Edinburgh group, has sponsored an award for non-fiction writing since 2015.The Baillie Gifford Prize was the result of the fund manager’s long association with Edinburgh International Book Festival. Nick Thomas, a partner, said the group always aims its spending at philanthropic causes and if they provide a marketing benefit, that is a bonus.
“We have never been interested in elite sports sponsorship and doubt we ever will,” he said. Baillie Gifford also partners Scottish Ballet and grassroots sport teams, among other projects.
Mr Thomas said Baillie Gifford invites authors to discuss their books with its staff. He gives the example of Ian Morris, author of Why the West Rules — For Now, who has influenced fund managers’ views on global trade.
Mr Thomas said the risk of commercial deals has been discussed but he added: “If there is a little bit of flak you occasionally get, then it’s probably worth it.”
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