Demonstrating value to sceptical decision makers. Discounting the discount (or not). Reaching the next generation of investors. Growing investment trusts: slowly but surely. All this, and more, I discussed with Simon Longfellow in the first episode of The Growth Engine.
Simon is the independent director of Electric and General Investment Fund and a non-executive director of Columbia Threadneedle Global Managed Portfolio Trust. He’s also the former Head of Investment Trust Marketing for Janus Henderson Investors, where he focused on reaching retail investors.
Having sat on both sides of the fence – board member and marketer – Simon speaks candidly about the challenges faced by marketing teams in investment trusts. And importantly, how we might get around them.
Listen to this episode or download the full transcript here.
Marketing is a crucial growth driver
We’ve worked with several investment trusts at Hub. So we know that growth looks different, which demands a tailored marketing strategy. In Simon’s experience, investment trusts grow “much more slowly”: “It’s about creating a stable, incremental demand rather than short-term spikes”. That requires long-term investor retention – Simon suggests that should be around 80% of the strategy, supported with new customer acquisition. Younger retail investors are the big growth opportunity. But awareness is low.
What if your trust isn’t pursuing growth? Steady demand, driven by consistent marketing, can influence the premium or discount of a trust. Reaching new customers can also help trusts to shift the nature of their share registers, “Making it more liquid” with “lots of smaller shareholders”, to reduce dependency on fewer, larger investors. Whatever the objective, awareness is key. So marketing is invaluable.
But boards can struggle to see the value
Many boards don’t see it that way. As a marketer, Simon noted that board members rarely seemed to ‘get’ it, and little airtime was dedicated to marketing despite its importance. But as a board member, Simon also understands that marketing is only one of an extensive list of considerations.
Boards have to be part of the journey. By finding common, accessible language and being transparent, we can ensure board members understand the role of marketing and can contribute to its success. We can also involve them in developing essential key messaging. Because the more time, attention and budget afforded to marketing, the better the results.
Efficacy demonstrates value
The board represents investors’ interests. And as Simon says: “If we’re spending shareholders’ money… then we need as board members to be able to justify the spending of that money [on marketing].”
It’s difficult to measure ROI exactly. But we can see how marketing campaigns have performed. Data is crucial. If it’s a webinar, who attended? Were they the right kind of audience? What was the cost per view? While this doesn’t prove conversions, it does prove our tactics are reaching the right people. And awareness is key: “If they’re not aware of it, they’re not going to buy it.”
Effective campaigns depend on robust strategies
What’s the biggest mistake investment trusts make with their marketing strategy? “Not having one. It’s doing things in a piecemeal, ad hoc way, and not thinking about it as a joined-up process.”
Simon recommends “Doing the research first, making sure you understand the people you want to communicate with, making sure you understand where they hang out, what they read, what influences them… spend the time and money getting that right.” Trusts make a lot of assumptions about their investors. Few actually take the time to speak to them. In short: do the research to identify the insights that can inform a strategy that works.
Key Takeaways
- Marketing can support long-term growth: Marketing gets limited airtime in investment trusts, and boards have to see value for money. But if you can shift board members’ perceptions, you could see the steady, long-term growth that can be the difference between a discount and a premium. If that’s what you’re chasing. And if you’re not, marketing can play several other roles, too.
- Keep to a common language with the board: If boards don’t understand what you’re doing, why you’re doing it, and how it’s making an impact, they can’t justify it to investors. So don’t overcomplicate marketing terminology. Set benchmarks for what success looks like and communicate those up front. And make sure your partner agencies do the same. At Hub, we clearly present our strategies, creativity, and results in terms that everyone can follow. Because we know the board has to be on board.
- Have a joined-up marketing strategy: Don’t be guilty of sticking to the same old tricks, regardless of whether they worked. Don’t start with the tactics, either, throwing up Google Ads and booking press advertising because they seem like a good idea. Think it through. Lead with objectives, then strategy, then tactics to execute that strategy. Or ask us to do it for you.
The team at Hub specialises in creating marketing strategies that are uniquely tailored to the specific needs of investment trusts. Feel free to reach out for a friendly, no-obligation conversation about how we can support you.
If you liked this episode, there’s more to come. Subscribe to The Growth Engine, join the conversation, share your insights, and contribute to the evolving narrative of marketing in financial services.
