Investment banks reduced the number of conferences they sponsored by 37% in the first half of 2020 from the prior year, according to data collected by investor relations platform provider Virtua. The large decline in conferences has generated concerns whether research payments will also fall. However, the falloff in bank conference programs was far less than non-bank conferences which shrank by nearly 60%. A few banks, notably RBC Capital Markets and Wells Fargo, increased their conference volume.
Fewer events
Only half as many conferences were held in the first six months of 2020 compared to same period in 2019, according to Virtua’s StockConferenceCalendar service. 2020’s tally of 1084 conferences was nearly evenly split between those sponsored by banks and conferences organized by other sponsors. Most of the decline was in the latter group, as non-bank sponsors cut back programs by 56%.
If the trend of the first half continues, the full year results for 2020 will see a major disruption in conference activity. Conferences are running at a rate that implies a decline of over 1700 events from 2019, the majority being those sponsored by non-banks. However, banks have been cutting back their events since 2017, likely in response to MiFID II’s prohibitions against paying for conferences with bundled commissions.
Leading bank sponsors
JP Morgan, Citi and Credit Suisse remained the top three conference sponsors overall during the first half of 2020. JP Morgan cut its conferences by less than Citibank, taking the lead during the first six months. On average the top three sponsors cut their programs by about a third, but JP Morgan dialed back by ‘only’ 25%.
RBC Capital Markets and Wells Fargo Securities bucked the trend, increasing their conference sponsorship during the first half of the year. RBC was particularly aggressive, upping its events by over 40%, moving it to the fourth most active bank sponsor. Deutsche Bank, which began shutting down its equities business last July, and Jefferies cut their conference activity the most among the top bank sponsors, paring back by over 60%.
The analysis is based on data supplied by Virtua StockConferenceCalendar, considered to be the largest global database of investment conferences and presenters. Virtua is a financial services technology company focused on providing platform-based analytical tools and services tailored to the workflow needs of Investor Relations (IR) professionals and publicly traded issuers. Although the firm is headquartered in Boston, much of the analysis and data collection is done in India.
Virtua acquired StockConferenceCalendar in 2015 from Dremer IR Counsel, an IR consulting company.
Our Take
Despite large balances in US CSA accounts set up for research payments, banks worry that fewer events will translate into lower research payments. These concerns were echoed by sell-side panelists at a recent conference who observed that although virtual events have been well attended, the perception is that quality of virtual events is diminished.
Nevertheless, Virtua’s data shows that banks were more successful in adapting to the exigencies of the pandemic than most non-bank sponsors. We’ll see if that trend continues when we do a full review at year-end.