For UK investment firms, that silence is a missed opportunity to stand out from the crowd.
The ‘too risky to provide them’ thought process needs a rethink.
Geopolitics is a big part of investments – commenting during political turmoil will not damage a brand.
Investment firms spend considerable resources understanding geopolitical risk.
Analysts model scenario outcomes. Portfolio managers adjust exposures. Risk teams stress-test against tail events. This expertise is genuine and substantial. When firms don’t share any of it with the press, that knowledge stays entirely internal – useful to clients, invisible to everyone else.
The press will fill the gap regardless – investment firms are missing a golden opportunity to highlight their expertise and convictions.
The public conversation about what a geopolitical event means for markets, economies, or specific sectors gets shaped by whoever is willing to engage. Firms that stay silent concede that space by default.
There is also a straightforward matter of credibility.
An investment firm that offers clear, considered analysis during a crisis builds a reputation for intellectual genuineness. Over time, that matters – to potential clients, to competitors, and to talent who want to work somewhere that contributes meaningfully to the public discourse.
“We might get it wrong. It may damage our brand.”
This is the real issue, but it applies equally to every form of client communication. Firms already issue research notes, market outlooks, and economic forecasts to their clients and partners. The standard for press commentary isn’t certainty – it’s informed, qualified analysis.
Journalists understand that geopolitical situations are fluid. Firms can say “based on current information, the most likely market impact appears to be X, though this could change significantly if Y occurs”.
A lot of firms hide behind compliance. Compliance teams are right to flag risks, but the framing of geopolitical commentary is typically different from stock-specific recommendations.
A general view on something like “rising energy costs from a conflict might impact European equities broadly” is not the same as a specific buy or sell recommendation.
In my view, the most valuable commentaries from investment professionals tend to share certain characteristics.
The spokespeople that distinguish between short-term market reactions and longer-term structural shifts are the ones that are listened to and quoted by journalists.
One big important issue is time.
An untimely comment in a journalist’s inbox, however, is a cardinal sin for a PR. Companies need to be quick – there is no time to be dilly dallying around when planning to comment on a matter which is fast moving.
Lastly, firms also do not need to comment on everything. But they should speak when they have something substantive to add. More people may want to read it than you may think.
The UK investment industry manages a substantial share of public and private wealth. The decisions it makes, and the frameworks it uses to make them, have real consequences for millions of people. Participating thoughtfully in public discourse about the geopolitical forces that shape those decisions is not a distraction from the core business. It is part of what it means to be a serious institution in a complex world.
The reporters covering these stories are asking the right questions. Investment firms should be willing to answer them.
Robbie Lawther is an Account Director at Quill PR
When Saba Capital attempted to oust the boards of seven UK investment trusts, it highlighted that one of the reasons it did so was because of their widening discounts. This is not just an issue for individual investment trust companies, but for the sector.
Quill PR asked Peter Hewitt, fund manager of CT Global Managed Portfolio Trust, his thoughts on why discounts in the UK investment trust sector have widened over the past couple of years and what can be done to close them.
Peter Hewitt, Fund Manager of CT Global Managed Portfolio Trust, commented: “When it comes to investment trust discounts, I think we need to understand why it’s become such an issue. The UK economy hasn’t grown as fast as it could and, coupled with the rise in inflation and interest rates, there was an absence of buyers which did not supply demand for shares – so of course discounts for certain trusts were going to widen. In 2021, the average sector discount was at 2%, and over the last few years it increased to 16%. But there’s not a lot you can do to about this – it’s not easy to fight against important macro trends.
“However, the boards and management of investment trusts now have to be rigorous in closing the discount gap and issue share buybacks. In the past, they have been reluctant to do so due to fears that it will drastically shrink the size of their trust, to the point that private wealth managers might not be interested in them if they are too small but if more investment trusts did this, yes, it may shrink and the investment trust sector may well be smaller, but they’ll keep shareholders happy and ensure that they have right rating and a better share price.
“The increase in AUM (Assets Under Management) targets for wealth managers has significantly reshaped the investment landscape. With the amount moving from £100m to around £500m, smaller investment trusts and niche funds often struggle to gain traction with larger wealth managers and institutional investors.
“In order for share buyback policies to make a difference, they would need to make sure that the quantum of the buybacks is materially different and not just one-offs. With this in place there would be a lot less discount volatility, which would arguably be more attractive for potential buyers such as private wealth managers and multi-asset funds.”
Perhaps in the fullness of time, we might thank Saba Capital for highlighting the widening discount in the UK investment trust sector. However, for now the boards of investment trust companies must look to closing the discount gap and ensure that their shareholders are happy.