Pictet’s Wendy Appleton on thematic investing, sales and Mega

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Wendy-Appleton-headshotWendy Appleton is Pictet’s Head of Sales – UK and Ireland. Kurtosys spoke with her recently about the accelerated interest in thematic investing, the power of less overt branding at reaching a new, wider, audience and how a VR headset can show clients where their money is being invested, in situ, regardless of where you are in the world.

How are you responding to the explosion in interest in thematic investing, having been a pioneer in that space for so long?

I guess we’ve got the fortunate element of being a pioneer; when something is your pedigree, and you’ve built up a franchise over 20 years, it is very difficult for any competitor coming to market to simply jump on board and replicate that. We now manage just under £32bn within the thematic space and, as a business, we dedicate a huge amount of resource, specifically, just to that area.
We aim to do things a little bit differently to some of our competitors. We work very closely alongside scientific institutions and have dedicated advisory boards, which we believe allow us to remain leaders in the field.

We are constantly looking to evolve and develop the themes that we manage; we have 10 single strategies but are always looking at whether they’re still relevant, need evolving, or where there are new opportunities.

For example, last August we launched a strategy called SmartCity, which I understand to be the only specific fund focusing on the evolution of smart cities, so we are constantly looking to remain innovative and forward thinking in this space.
As far as the competition goes, I think that as an organisation, Pictet tends to be known as being a bit a little bit different to our peers. For instance, I remember when the Water fund was launched in January 2000. I wasn’t at Pictet at the time but they received a huge amount of scepticism around launching such a specific product and it now stands at nearly £4bn in size.
We actually welcome greater competition. It has helped us move from being an organisation that is very well-known for our expertise in this space to be able to raise broader awareness of thematics, because so many more competitors are coming to market. Yet I feel that we still have, and will always have, a reputation as being one of the pioneers in this space, with the privilege of all our pedigree and history. New products and entrants coming out are just raising awareness of what we already do, and are opening up new conversations for us as well.

As thematic investing is a huge opportunity for you, and for the wider industry, what about the flipside – what do you see as the major current threats; either those you face as a business, or that the asset management sector faces in general?

At the moment the industry faces a lot of potential threats and challenges. The obvious areas are market volatility and ongoing regulation. But beyond that, we’re faced with the age of digital disruption, which is one area that is threatening asset management by continuing to contribute to fee pressures. Then of course, we are all faced with the uncertainty of the UK, and its relationship with the European Union.

How do you tackle those, in practical terms?

You clearly need to have a strategy in place, but I don’t think a knee-jerk reaction is necessarily the way to go. As a business, you need to take time to stand back, look at the threats and the challenges and decide what will be the right course of action for your clients.
For example, how could we take a knee-jerk reaction on Brexit? We don’t fully understand the implications that that is going to have on our funds, our company, our market or our products. Therefore we don’t really know right now what will be best for our clients, so ultimately, I think the best way to respond to a lot of these threats is to take some time, stand back and while I wouldn’t say we necessarily want to learn from other people’s mistakes, but would prefer to take our time to make sure that we get it right the first time. That is true of the threats or the challenges around Brexit, and also around those factors applying pressure on fees.

You’ve mentioned digital disruption. Let’s talk about how technology is increasingly used across asset management businesses, and how that disruption can be both a threat and an opportunity.

It obviously plays a huge part in the industry. I think one of the key benefits of technology makes it far easier to access data than it ever has been before and operationally, technological advancements allow all of us to provide a better, quicker service as we move from faxing orders in a manual fashion as opposed to now, just processing a contract confirmation within seconds.

I’m probably more qualified to talk about how it’s helped the sales and marketing side of the business. Clearly, one big area is social media, which plays a massive role. We are able to get reactions to market movements, macro views on political changes and announcements, or details on certain stocks out to market via the internet extremely quickly, which means clients are getting relevant, timely information.

It allows awareness of certain topics such as, the environment, which we talked about earlier, which really helps to raise awareness of sectors, which perhaps just didn’t get the airtime previously.

And as things change so quickly, if you have to consider the shelf life of a piece of communication, that has to be factored into the message, doesn’t it? Ensuring it’s got a degree of ‘evergreen’ status to avoid it becoming less relevant by the time it is physically printed and distributed.

People don’t expect everything in paper format anymore. If you take into account the cost of producing a nice printed brochure, as soon as you’ve produced it, anything to do with performance figures or data is probably out of date before it’s even printed. The beauty of hosting all of this information online is that if something changes, it can be updated instantaneously. Not only is moving away from paper better for the environment, but it allows that information to be updated in a much timelier manner, which has to be good for all concerned.
The growing use of platforms such as YouTube for producing short videos updates to get messages out to market very quickly has been interesting.
One thing we did fairly recently was create these 360° virtual reality films, which, by using a VR headset, allows you to walk the journey of where we invest; the companies we invest in, so you can stand on the factory floor and see first-hand the organisation in which we invest. Or you can walk down a street and see all the technology, such as the CCTV cameras or the smart traffic infrastructure.

Do you see these being used alongside more traditional marketing approaches, or is this now becoming the way things are and people expect something that’s a bit fresher, a bit different?

We like to pride ourselves on being innovative, because so much has already been done before and people get a little bit tired and bored of the same old traditional approaches. I believe certain elements of the whole sales and marketing process, such as going to conferences and having face-to-face contact, looking into the ‘whites of the eyes’ of the fund managers and hear things for themselves. But I think in terms of how we distribute our information, I think it’s important to keep looking for new ideas. Gone are the days where you are sending out huge amounts of mailers, every Wednesday, for example.

Tell me about Mega. This is not a big branded push, is it?

Being a leader in the thematic space, we wanted to create something with a brand of its own, to reach the broader market, highlighting those technological, sustainable and environmental issues that humanity faces, and to do it through an independent platform.
The idea was to appeal more broadly than just our industry. The subject matter are big topical concerns, there’s no product push, but rather very theme- or industry-driven. We wanted to capitalise on all of our knowledge and contacts, such as the academics and scientists I mentioned that work alongside us; they all contribute to the content that is on Mega.

How do you measure the success of something that isn’t linked directly to product sales?

You can’t correlate it directly with new business, no, but you could look at the number of new subscribers, for instance. There are about 20,000 followers to the site on social media, and those subscribers to the newsletter. We picked up an award for market innovation, and for me, I like seeing the number of key influencers in the world of social media, sharing and commenting on the content.
For instance, we had Stella McCartney (or perhaps one of her ‘people’!) commenting on, and then sharing, a piece we put out on the manufacturing of premium brand clothes in emerging markets. We’ve been featured on a TV programme on traffic that was on Jon Richardson’s comedy show, The Ultimate Worrier, who had come across some of the data and asked whether they could use it on their show.
So it is being recognised by the broader media, which I think is testament to the fact it is getting a reputation out there, which is doing what we want it to and taking the topics beyond the typical asset management audience – they might not follow a fund group but might follow topics on the environment or smart tech.

sam shaw

sam shaw