BNY Mellon recently interviewed 40 institutional investors to gauge opinions on non-deal roadshows by foreign issuers. The profiles of investors, their assets under management, styles and location varied. Findings make an interesting reading, especially in the light of current wave of regulatory spotlight surrounding Corporate Access in the UK.
Trends in North American Investor landscape:
* There are $13.3 trillion in active equity assets under management in North America (approximately 60% of the total active equity assets managed globally), compared to $6.4 trillion in 2008.
* Over 3000 active asset management firms invest internationally in North America, a 75% increase since 2005.
* Top 5 investment centres for international investors are New York, Boston, San Francisco, Los Angeles, Toronto.
Survey findings of the survey (from report’s executive summary)
* 43% of investors rate their current level of corporate access to non-North American companies as ‘Average’ or ‘Poor’, driven mostly by dissatisfaction from investors located in secondary investment centres.
* Regardless of investors’ overall satisfaction with their current direct access, over three-quarters of study respondents state that they face limitations in obtaining access to non-North American companies. This is most pronounced with investors from secondary investment cities, where 87% claim to face some limitations in gaining access to non-North American companies versus only 69% in primary centres.
– 60% of respondents assert that lack of corporate access eliminates a non-North American company from their investment universe.
– Over a quarter of investors have decreased the number of investor meetings
facilitated by the brokerage community — with the mean percentage of meetings
facilitated by brokers at 68%.
– Before initiating a position in a non-North American company, 72% of investors
require at least one meeting with senior management in order to establish confidence in the team and gain a detailed understanding of the company story and strategy.
– A majority of study respondents agree that operational heads of non-North American companies should be more visible to investors, because their technical knowledge and unique perspectives provide additional invaluable insight to the investment community.
The growing equity assets under management of investors with global mandates will continue to present opportunities for IR teams around the world. However, it will be increasingly difficult for IR teams to facilitate face to face meetings with growing amount of investors, especially in tier 2 and tier 3 investment centres. We believe effective use to technology in investor engagement can play a large part in bridging this gap in the future.