According to a survey of European institutional investors released last week, as many as 76% of investors are no longer attending sell-side conferences due to growing concerns around the global COVID-19 pandemic.
Survey Results
The recent survey conducted by corporate access provider Phoenix-IR, included feedback from 80 European-based institutional investors, managing approximately $2.5 trillion AUM. A few of the key findings of this survey include:
Are You Still Attending Conferences?
Over three-quarters (76%) of the investors surveyed explained that corporate concerns about the spread of COVID-19 have prompted them to stop attending sell-side sponsored investor conferences.
Are you Still Participating in Reverse Roadshows?
A similar percentage of investors (73%) say that recent developments with the pandemic have caused them to stop participating in reverse roadshows where the bank or broker takes buy-side analysts or investors to visit several public companies of interest over a few days.
Has Your Firm Suspended International Travel?
According to the survey, the reduction in conference and reverse roadshow participation is consistent with the implementation of corporate bans on international travel as 54% of buy-side firms surveyed have implemented such travel restrictions.
Are you Still Hosting 1:1s in Your Office?
It is interesting to note that 60% of European investors are still hosting one-on-one meetings with corporate management teams in their offices. However, only 49% are venturing outside their offices to attend group breakfast / lunch presentations.
Preferred Method For Talking With Companies?
The spread of COVID-19 has not changed the value that institutional investors place in meeting with and speaking to company management. However, European investors continue to feel most comfortable in conducting these interactions via the telephone (67%) versus leveraging video conferencing capabilities (33%). This is due primarily to perceived technical and logistical barriers to setting these calls up.
Our Take
As we mentioned in last week’s article on the impact COVID-19 is having on the research business, a large number of sell-side firms are either transforming their physical conferences into virtual ones, or they are canceling these events outright. This is due partly because investor clients are refusing to attend, corporate executives are choosing not to show up, or the banks themselves have decided that the PR and health risks of holding a conference is too high.
As we can see from the survey results discussed above, a majority of European buy-side investors have decided to forgo attendance at sell-side conferences and reverse roadshows. However, a majority of these same investors are continuing to hold 1:1 meetings with corporate executives in their offices, revealing the continued importance of corporate access to their research process.
Despite investors’ lack of comfort in using video conferencing technology to engage with company management, we suspect this is due to the unfamiliarity with using the technology and not a real preference for telephonic communication. After all, video conferencing still enables investors to see for themselves how company management reacts and responds to the questions asked of them.
Consequently, we suspect that a growing number of buy-side investors will become more accepting of video conferencing with C-level executives, particularly if they have sell-side banks and brokers, or other intermediaries handle the technical and logistical complexities associated with managing these calls.