The main factor behind the level of citizen participation in the initial stages of the pension reforms – and particularly, in the allotted period for deciding the preferred asset management companies (between October and December of 2003) – involved the severely low level of public awareness about what these pension reforms actually entailed.

This situation was superimposed on a general mistrust of both the state’s overall efforts to conduct financial reforms and the private financial institutions themselves. The selection of the target audience for agency communications thus had strategic implications. In essence, it involved determining which segment of private investors represented the most promising target and would respond to Kapital Asset Management’s business proposals best. For its initial target audience base, the agency selected a pool of corporate clients that the asset management company had developed over its seven years of market operations.

During the initial marketing and financial analysis stages, the client and the agency selected a promotions strategy that, on the whole, came down to the following fundamental features of target group selection:

a) the company’s services had to be first offered to the staff of various enterprises, rather than to private individuals "on the open market";

b) these enterprises had to be selected on the basis on a number of criteria such as the number of enterprise personnel, their average salaries, whether the enterprise was operating its own private pension fund, and their relevant experience in collaborating with outside firms in the field of pension fund management;

c) even though Kapital Asset Management belonged to a certain financial – industrial group, attaining leadership would have been impossible by operating on the industrial enterprises of this group alone; positioning the company in this manner would have limited its future potential; it was essential to penetrate different industrial sectors, ones that operate outside the company’s financial – industrial group;

d) the communications’ additional target group was thus composed of managers of enterprises whose parameters fit those outlined above.

Two target groups were established from the above criteria: potential investors who come from a group of the qualified enterprises’ "production" employees, as well as their managers; and a "corporate" level of employees who work at the corresponding enterprises, along with the staff of these enterprises’ personnel and accounting departments.

 For methodology, the agency chose to stage meetings between the asset management company’s representatives and the enterprises’ various personnel. The agency felt that it was of vital importance to move away from the one-way mode communicating with potential investors. Instead of "advertising" the client’s business proposal, the agency preferred to provide an opportunity for interactive, "two-way" communications between the company and potential investors.

The agency developed a format for organizing and staging such meetings, as well as their content, handout material, and methods of engaging the staff of the enterprises’ personnel and accounting departments. The engagement of personnel and accounting staff – in addition to the managers – became a key factor that helped insure high turnout for the meetings. It also helped to build trust in Kapital Asset Management speakers who were making the business proposals.

Even though "related" enterprises within the same financial – industrial group were not viewed as the main source of potential investors, fairly intensive work was conducted at these enterprises as well. Working with enterprises that were either partners of – or had friendly relations with – Kapital Asset Management helped to streamline the meetings’ overall organization schemes, employ these enterprises’ personnel as information carriers, substantially reduce costs, and focus agency efforts on regions where the competitions’ activity levels remained relatively low.

The main arguments in favor of selecting Kapital Asset Management chosen by the agency focused on the company’s strong professionalism, its successful long-term experience in managing citizens’ voluntary pension savings that accrued at private pension funds, its high financial management performance results, as well as strong company reliability.

In September 2003, the agency developed a special information pack for future Kapital Asset Management clients that contained information about the essence of Russia’s pension reforms, as well as various details about Kapital Asset Management – including retrospective data about its previous performance results in the field of private pension fund asset management, calculations of potential returns for the invested pension accumulations, the market value of company assets, a detailed description of the procedure for transferring pension funds to private asset management company management, and other essential information. The information pack was published in the shape of a special brochure.

By the beginning of October, the company had opened a hotline for investors as well as a special website, www.nakopi.ru, which contained general information about pension reforms, a “pension calculator” that enabled users to calculate the total sizes of the accumulated portions of their pensions, the required application forms, and addresses for both the asset management company’s local offices and those of the local branches of the Pension Fund of Russia, bank transfer agents and notary offices (in Moscow and Saint Petersburg). The website also contained an interactive forum that enabled users to receive on-line answers from experts. The site was intended for educational purposes, becoming one of the first such resources on the Russian Internet. At the same time, the asset management company’s own website was also updated.

The hotline, information packs and access to information through users’ internet queries formed the informational foundation for the work conducted with potential investors, who primarily consisted of personnel employed at the selected enterprises. The series of meetings with enterprise employees continued from October through December of 2003. Around 50 such meetings were held in all. These "road shows" spanned 12 Russian regions, most of which first received a press briefing from Kapital Asset Management General Director Alexei Shkrapkin. These briefings focused on general pension reform issues along with details about the asset management company’s operations. In order to sustain a constant presence of information in the priority regions, leading publications were selected for running a series of full interviews with Shkrapkin.

In addition, an agreement was reached with the Izvestia newspaper concerning the publication of a weekly page devoted to pension reforms, which was sponsored by Kapital Asset Management. Fifteen issues of this feature page were published by the end of 2003. The page contained interviews, commentaries and consulting advice from Kapital Asset Management representatives, an investment dictionary, and information about relevant experience abroad. Starting in 2004, a similar agreement was also reached with Komsomolskaya Pravda, which began to publish a monthly page devoted to pension reforms. To help boost these publications’ coverage and reader impact, the agency actively reprinted material published in Moscow newspapers such as Izvestia and Komsomolskaya Pravda in the regional press.

The narrowness of “corporate” level media platforms for disseminating information on the course of pension reforms was partially overcome by the initiation of a new product within the project’s frameworks – the Interfax News Agency’s Pensions and Investment journal. The magazine, published on a twice-monthly basis, became an efficient and convenient carrier of information about the general course of pension reforms, various asset management companies’ operations, and other information.

The initial stages of implementation of Russia’s pension reforms, which began in 2003, lead to the general public’s discovery that it could choose to transfer the cumulative portion of its pension funds, which were held in the Pension Fund of Russia, under the management of one of the private asset management companies.

This stage was interim in nature: pension reforms presumed that on the following year, in 2004, citizens could withdraw their entire pension savings from the Pension Fund of Russia and transfer them to one of the private pension funds. Asset management companies’ work in this interim period was justifiably viewed as a chance for the asset management companies to gain the required experience and to gain the public’s trust. After that, they would readily vie for the massive future inflows up public assets, lobbying the interests of their associated private pension funds. For this reason, a furious battle unfurled between the 55 private asset management companies that received the corresponding licenses for the right to manage the public’s pension savings. Since this particular financial services sector was opened to competition for the very first time, the starting market conditions were the same for each of the asset management firms.

The Kapital Asset Management company was determined to use this interim period to grab the newly-formed market segment’s leadership, which would have ensured it with the best-possible starting point for the second stage of the pension reforms. Strict time limits were further imposed by the rules themselves: these funds could only be transferred to the asset management companies by the end of 2003. This was followed by an extended legislative pause, with no new fund transfers allowed until the second half of 2004. These severe time limits were further linked to enormous delays in the official preparation of the necessary legislative frameworks, the late issue of asset management companies’ licenses, and the delayed performance of the required procedures by the Pension Fund of Russia itself.

The pension reform legislation initially established that citizens would receive information about their Pension Fund of Russia accounts, and would be able to choose between the various asset management companies, by the spring of 2003. However, faulty "state machine" operations meant that asset management companies could only start vying for citizens’ funds in October.

Thus, the agency had to operate under the strictest of time constraints while developing and implementing a communication program for Kapital Asset Management that would allow the company to attract the greatest number of pension assets possible and assume a leading position among the top five or 10 licensed asset management companies.

The project’s results summary was conducted in March of 2004, when in accordance with the established deadlines for submitting the required financial reports, the Pension Fund of Russia began to transfer citizens’ pension funds to private asset management companies that already held trust management agreements. It was now possible to assess Kapital Asset Management’s standing in relation to the "qualifying run’s" participants.

Thanks to an expertly selected strategy for disseminating information, as well as the trust-based and two-way method of communication, Kapital Asset Management was able to meet its initial goals. The company took first place in terms of raised investor assets (more than 304 million rubles). It came in third in terms of the number of applications received (around 85,000 application) among the 55 private asset management companies. The company’s leadership in terms of volume of raised assets came as a direct consequence of its high selection standards applied to chosen enterprises. In addition, in the course of its implementation of the project, the company won first place in the Expert Rating Agency’s reliability rating, which enabled the company to rightfully call itself Russia’s most reliable asset management company.

The company also repeatedly won top positions in weekly press ratings where the company was mentioned substantially in published material on pension reforms, confirming the successful execution of the assignment to maintain information parity in the media. Having grabbed the leading position at the introduction of the pension reform process, Kapital Asset Management remains a leader in the pension savings management sector to this day.