ISP 25 Years – How does research on institutional investing help investors?
For 25 years, SFR's Institutional Investment Research has examined in depth the activities of Finland's most significant investors. At the same time, we have been able to influence the development of the entire industry by helping asset managers to better understand the needs of their clients. In this way, the study has supported the development of the quality of services for the entire investor community.
The text is part of a blog series where we present our study from different perspectives. In this blog, we look at how research serves the investor community. In addition, Juho Sulkanen, who has been a part of the studyfor a long time, opens up about his own experiences from the perspective of the author of the study. The first part of the blog series can be found here and the second part here.
SFR Research is an independent research company founded in the early 1990s, and we offer high-quality institutional investment and capital market research for the benefit of the entire wealth management and investor community. Our esteemed research is based on long-term trust and cooperation with the investors we interview. Check out all our studies here!
What is Institutional Investment Services -research?
The Institutional Investment Services Programme, or ISP survey, is an in-depth interview survey conducted regularly since 2000, in which approximately one hundred of Finland's key institutional investors participate annually. The study provides a unique perspective on the Finnish institutional market and analyses, for example, investor allocations, the use of investment instruments and future trends. In addition, we investigate investors' experiences of the operations of different service providers and the reasons behind asset manager choices.
Our goal is to strengthen and streamline the market to make it easier for investors to find the most suitable partner and to enable asset managers to meet investors' needs with increasingly high-quality services. You can read more about the study here.
What kind of investors are interviewed for the study?
Every year, we personally interview approximately 100 of the most significant Finnish institutional investors. The population of the study includes a wide range of investors, such as pension funds, insurance companies, cities, universities, trade unions and foundations. The combined investment assets of all interviewees amount to nearly EUR 300 billion.
The investors responding to the study have extensive experience in the use of asset managers and different asset classes. In addition, they must have several asset managers at their disposal and the ability to evaluate the activities of asset managers in relation to each other. In this way, we ensure the high quality of the results of our research. We look at the population of investors interviewed each year and listen to asset managers' suggestions for adding or removing investors. Most of the respondents remain the same year after year, increasing the comparability of the survey between years.
The interviews we conduct are strictly confidential and the interviewees are our committed partners. All information provided by survey participants is processed statistically in such a way that it is not possible to identify individual respondents.
Why do investors want to participate in research?
Annual review of their own operations – The interview provides investors with an excellent opportunity to assess the current state and future of their investments, which helps them clarify their goals and check the performance of asset managers. Our interviewers are experienced professionals in the field of wealth management, with whom conversations can offer new ideas.
Anonymous feedback to asset managers – Interviews provide investors with an opportunity to provide collective and honest feedback on asset managers' activities anonymously. Our asset manager clients actively utilise these results in developing their own operations.
Comparison with other investors' views – The market report provided to respondents provides valuable information on the activities of other institutional investors and helps investors develop their own operations and understand market trends. We also offer interviewees an in-depth review of the report if they so wish. You can read more about the market report in our previous blog post here.
Why is ISP research important for the entire Finnish investor community?
The study is a valuable tool for investment service providers operating in Finland. Asset managers closely monitor their annual results and use them continuously to improve their services. Regular evaluations encourage them to be customer-oriented and improve the quality of their operations to meet the changing needs of investors. Thus, the study affects the quality of customer service received by all Finnish investors, the level of asset management and the variety of products used.
Thoughts of a long term interviewer
Juho Sulkanen has been part of SFR's team since 2008, and conducting in-depth interviews with institutional investment experts is at the core of his work. Juho conducts dozens of interviews every year in our ISP research, so he has a broad understanding of investors' thoughts and needs. Next, Juho shares his own experiences of conducting institutional asset management research.
What has changed in investor operations during Juho's career?
When Juho started working at SFR, the financial crisis was at its height and Lehman Brothers had just collapsed. " It was really interesting to see how the industry reacted to this unprecedented situation. You could see how us juniors at the time started to tighten their ties a little, while the more experienced players were able to take the situation more slowly."
"One of the biggest changes in institutional investing during my career has been the strong growth of alternative investing," Juho says. "When I started researching institutional investing about fifteen years ago, alternative investments played a very different role in investors' portfolios than they do today. The weighting of alternative investments was generally smaller and consisted mainly of real estate investments. With the prolonged period of zero interest rates, the situation changed first due to increased private equity and infrastructure investments, and later due to strong growth in private debt investments."
Another issue raised by Juho is the increasing importance of sustainability. "When the themes of sustainable investment were first included in the study in 2007, the attitude was still hesitant. At first, the terms varied and there was talk of ethical investing. Today, sustainability is the industry standard – it is an essential part of asset management that is taken into account by all actors. It has been interesting to observe how the significance of responsibility has become more concrete in investors' operations year by year."
Why is research on institutional investment important?
"It is important to use an annual high-quality survey to study institutional investors' thoughts on investment trends and experiences of the asset managers used. Based on the feedback received in the study, it will be possible to convey cross-cutting, asset manager-independent information from the institutional investment field to asset managers, who will be able to use it to serve their most important investor customers even better in the future," Juho says and continues: "It is also important to study institutional investing in order to produce information collected for investors themselves on the views of other institutional investors. The survey provides investors with valuable, up-to-date information on market conditions and trends."
"Without research-based information, we are left to guesswork," Juho sums up.
Why are face-to-face interviews important?
Juho emphasizes the importance of personal interviews and says that they enable in-depth exploration of the topic and mutual dialogue. Discussions provide more and higher quality data compared to, for example, an online survey. In personal interviews, the respondents have the opportunity to reflect on their answers in depth, and with the help of the interviewer's professionalism, the conversation remains interesting until the end. The most important conclusion is that thanks to personal interviews, the quality of survey results is at a completely different level than in online surveys.
What's the best thing about your job?
Juho says that the best part of his job is conducting research interviews. Juho appreciates working with people and having conversations with smart and nice interviewees. Long-term cooperation with investors is also particularly great, as he has collaborated with some of the interviewees for more than 10 years. "It's rewarding to see how their thinking and insights have evolved over time. Someone may have sworn by a particular investment strategy and later changed direction – it's interesting to understand where these changes come from.
Interested in our research?
Our research provides unique and in-depth information on the investment activities and market development of Finland's most significant institutional investors. Our customers use our reports in a variety of ways, for example, to develop their product portfolio, improve the quality of services and understand the market. Our service helps them stay one step ahead of the competition and make decisions based on both trends and investor needs.
