The following is a guest article from Caspar Luard, who heads sales and marketing for MeetMax.
The last 10-15 years have seen radical changes how the sell side interacts with the buy side to provide execution and research services but corporate access has changed very little over the years.. Meeting with company management remains a central element of deciding whether to buy or sell a stock, and the sell side remains the primary provider of corporate access.
Commercial transactions between two parties, a buyer and a seller, in every line of business are made more efficient by two people sitting down and exchanging views and opinions and answering questions. Face to face meetings are a key element of efficient capital allocation in the broad economy.
Firms like Business Intelligence Advisors provide training to investment professionals to analyze and interpret the physical responses of a management executive to questions. The buy side continues to get great value from meeting face to face with a management team.
New technologies such as better and cheaper video communication platforms have not changed the demand for face to face meetings. Increasingly high resolution video can allow beads of sweat to be visible on a management’s face during a video conference call but getting a live office meeting with a management team is still much more valuable.
Another corporate access trend has been the arrival of new technology providers that aggregate upcoming sell side corporate access events into a single platform. These new providers, as detailed in a recent Integrity article “Why hasn’t Corporate Access Changed?” include: WeConvene, Ingage, A2 Access (acquired by Dealogic in August), OpenExchange, CorporateAccessNetwork, and CorporateAccess.net as well as new arrival CorpAxe.
Stock exchanges are also providing access to management as a benefit to their listed companies. Several stock exchanges organize investor conferences of some scale for their listed companies. Stock exchange conferences are sometimes organized in partnership with a sell side firm.
There is a trend towards stock exchanges managing conferences using in house resources and technology available. The London Stock Exchange recently announced a new LinkedIn type product called Elite Connect.
Sell Side Corporate Access
Despite these developments the sell side is still the most important provider of corporate access to the buy side. Corporate access is provided to the buy side in three main forms:
- Non-deal roadshows where a broker accompanies management on one hour meetings with the buy side. These meetings are invariably held at the buy side’s offices.
- Field trips or plant visits where a group of investors travel with an analyst over several days to visit company HQs or plants.
- Investor conferences
While non-deal roadshows and field trips are relatively straightforward to organize with a limited number of meetings, investor conferences are complex with many moving parts. Investor conferences are very attractive to the buy side. The buy side is provided with the opportunity for multiple meetings with management teams in a concentrated form over a one or several day period.
Investor conferences have a life cycle of three months because of the planning involved. Typically a broker’s analysts will confirm company participation, sales people will be involved in inviting investors and getting meeting requests, and a meetings scheduling process will be done closer to the event.
Wall Street investor conferences range from one to multiple days in length. The conferences consist of general presentations by company management teams before large groups of investors combined with 1-on-1 meetings and smaller group meetings.
Conferences often involve 750+ attendees and a key feature is the private meetings between asset managers and listed companies. The volume of private meetings at even a smaller sized conference can quickly run in the 100’s. A larger conference will consistently result in many thousands of private meetings between investors and asset managers.
Despite regulatory intervention and technological alternatives, corporate access is largely being conducted as it has for years. It remains a key component of the advisory services offered to the buy side, and is still largely delivered in the traditional forms.