The following is a guest article from Caspar Luard, who heads sales and marketing for MeetMax corporate access software.
Swiss start up corporate access provider Interaction Partners joins the growing list of technology providers looking to disrupt the corporate access market, according to an article on finews.com. These new pure technology entrants into the corporate access market can be divided into three categories based on differing business models. One category of technology providers partners with the sell side, another looks to disintermediate the sell side, and the third type of providers are stock exchanges.
Disintermediating the sell side
The business model of software providers looking to allow corporates direct access to the buy side is to charge either the buy side directly or the corporates directly. New provider Interaction Partners is in this category. Meetyl and ingage also provide this service.
These providers argue that they are able to provide corporates with access to a more differentiated investor base than a roadshow organized by a sell side firm. This is because sell side firms would typically prioritize delivering corporate access to funds that generate large commission dollars. The funds that are either large in size or have high turnover will be important business partners to the sell side firm and will therefore be provided with most of the meetings on a non-deal roadshow.
Cooperating with the sell side
The other type of corporate access software providers a forward calendar along with consumption tracking. Sell side firms do not pay a fee to enter data into these applications because they are viewed as partners to the calendaring firms. Weconvene, which recently struck a partnership agreement with Bloomberg, Ed Byon’s Corp Axe and Dealogic’s A2 Access are in this category.
Corporate access delivered by sell side firms with analysts covering stocks may provide a very targeted and relevant series of meetings. Because sell side analysts are focal points for investor discussions around a company’s prospects, sell side firms tend to have a good understanding of the investor opinions around stocks. This may result in more targeted meetings with relevant investors which can benefit companies considering the benefits of the two approaches.
A third category of technology provider in corporate access is represented by stock exchanges. Stock exchanges provide many services to listed companies and corporate access is a natural additional service.
Some Stock Exchanges partner with brokerage firms to provide this service. An example of this are several investor conferences that are organized by stock exchanges in partnership with brokerage firms (NASDAQ and Euronext are examples of this). London Stock Exchange launched a specific technology service called Elite Connect last year. Elite Connect provides an application to allow investors and companies to interact directly and book virtual meetings.
Technology continues to impact the sell side’s relationship with the buy side and this applies to corporate access. However there is a strong case that a sell side firm with quality analysts has important insights on investor opinions on stocks. This insight enables the sell side to manage a well-targeted non-deal road show or investor conference.