lucy sharma global corporate & investor connectionsbvb.ro/info/conferinte/lucy sharma.pdf ·...
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How to meet new global investors with no extra travel or costs
LUCY SHARMA
GLOBAL CORPORATE & INVESTOR CONNECTIONS
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INVESTOR / CORPORATE CONTACT MODEL IS CHANGING
• The traditional corporate and investor contact model is changing
• Regulation has prompted a change in corporate access service
• Brokers are getting paid less – margins are being squeezed
• Company coverage has reduced
• Technology has extended the offering – and changed it– High service level model tends to be only to key corporates now
– No longer need broker middlemen
REGULATION – LEADING TO UNBUNDLED SERVICES
MOVE TO UN-BUNDLED SERVICES – UK & EU, US?
Research
Corporate Access
Execution
ABC Broker YXY Fund Management
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FUND FEES ARE DROPPING
The asset-weighted average expense ratio across funds (excluding money market funds and funds of funds) was 0.61% in 2015, down from 0.64% in 2014 and 0.73% five years ago.
LESS MONEY FROM SELL-SIDE SERVICES
BANKS MAKING LESS MONEY FROM PROVDING SERVICES TO BUY SIDE
• Estimate 50% drop in aggregate spend on Investment-Bank Research 2010-2015
• The FCA intends to erase $800 million in commissions it estimates are spent on corporate access in the UK
“Investment banks think the asset managers will continue to pay everything. But the numbers of that just don’t work,” Chief investment officer of European equities at Allianz Global Investors.
MANY STOCKS LEFT UNCOVERED
Screen of listed companies in US and Europe
• 4,000 with 1 or less analyst
– 2,700 with no analyst
– 1,500 in the U.S.
• 133 EU listed companies with market cap greater than $500m no analyst covering
BROKERS CONCENTRATING ON KEY CORPORATES
Low Touch
Low Tech High Tech
Broker Corporate Access
Bloomberg Corporate Access Solutions • Content and user agnostic• Product/Tech focused• Virtual • No research/broking
Key Corporates
Non-key Corporates
Broker ROIHigh Touch
CONNECTIVITY HAS MOVED ON!
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CORPORATE ACCESS MODEL
Broker/Bank
Investors Corporates
CORPORATE ACCESS MODEL - NEXT STAGE
Broker/Bank
Investors
(Brokers Clients)Corporates
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CORPORATES ALREADY DOING THIS
Brokers
Non-brokers service providers
2012 2013 2014
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YET CONTACT IS KEY TO INVESTMENT DECISIONS
Structural changes mean brokers are reworking their business model:
• Yet investors require contact with corporates to make investment decisions
• However, with more limited resources there are less contacts generated from the sell-side
• Investment decisions have become more global
• The investment community is greater internationally
• How do you know who to contact….?
60% of North America investors say not being able to meet corporates will eliminate that Corporate from their potential investment universe
NO CONTACT = NO INVESTMENT
NEED TO GO OUTSIDE THE DOMESTIC COUNTRY
0
500
1000
1500
2000
2500
UK Nordics W.Europe Ex,F, Ger, Swiz)
France Switzerland Germany SouthernEurope
Eastern Europe
No. Of Institutions
AUM
NB. 50% Norges
SO THERE MAYBE MORE CHOICE THAN YOU THINK
HOW TO MEET NEW INVESTORS PROACTIVELY
Proactive investor search
• Check which are the main investors in that country when on a roadshow (remember sell-side limit meetings to their clients largely). This can include passive investors too as they can still vote / wield influence
• Check to see which investors are increasing positions in your sector
• Check who owns your peers
• Use investor knowledge to identify influential / up-and-coming investors
Use technology for connecting with new investors
• Preliminary chat to establish interest / knowledge pre management meeting
• Virtual meetings for those located in regions / cities you don’t visit
• Connect directly to investors through client system
• Log all meetings and interest / issues for follow up interactions
INVESTOR SCREENING: IS <G0>
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OWNERSHIP: OWN IR <G0>
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INVESTOR RELATIONSHIP MANAGEMENT: IRM <G0>
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ATTRACT NEW INVESTORS THROUGH STRATEGIC TEACH-INS
Group strategic calls:
• 1 hour management / investor relations time – audio group call
• Target non-holders – large and small, but open to all
• Format– 25 minutes of strategic overview
– 35 minutes of Q&A by investors
• New investors hear the strategic case set by the company / initial research
• Investors can follow up individually afterwards for 1-1 calls if looking to invest
• Existing investors listen to the questions posed by new investors
• Can attract investors with only an initial tentative interest in the stock
• Very efficient use of IR / management time to meet new investors
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CASE STUDY 1: VIRTUAL ROADSHOW – from your desk
U.S. Consumer Company • Hosted by Head of Investor Relations of large US consumer group • Single smaller investor approached us for an introduction to IR – we
suggested a group call with investors • Assumption was there would limited interest; IR was confident she knew
the European investor base well• 55 investors asked to joint the call • Mix of existing and new investors, large and small• New investors grateful for the opportunity to speak to company• Existing investors wanted to listen to the questions asked by investors new
to the story • IR was unaware of additional demand for access in the region or the
additional demand from own clients
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CASE STUDY 2: VIRTUAL ROADSHOW FROM YOUR DESK
French engineering company
• French based corporate wanted to connect directly with existing and prospective shareholders BUT was under cost pressure
• We proposed global virtual roadshow - allowed him to have 1-on-1 video conference meetings from his office to clients across the globe in one day
• IR remained in Paris and hosted the following meetings
• COST EFFICIENT solution to his problem
Meeting time, CET Investor location Country AUM, US$ Type
09.00 - 10.00 Sydney Australia >200m LO
10.15 - 11.15 London UK c41bn LO
11.30 - 12.30 Luxembourg Luxembourg c1.7bn LO
12.30 - 13.30 lunch
13.30 - 14.30 Dublin Ireland >57.2bn LO
14.45 - 15.45 Toronto Canada 109bn LO
16.00 - 17.00 Madison, WI US 102bn LO
VIDEO CONFERENCE CALL DEMO
Demonstrating video call to London colleague:https://nexi.bloomberg.com/flex.html?roomdirect.html&key=ZPQ2jClwERsiSEYGm
hd3L1cQcF8
INVESTORS ARE ADAPTING TO CHANGE
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10
20
30
40
50
60
70
80
90
Q1 Q2 Q3 Q4 Q1 Q2 Q3
2013 2014
physical
virtual
2013 2014 2015
Bloomberg INVESTOR ACCESS – type of MEETINGs EXECUTED 2013-2015Physical v. Virtual Meetings (ex-CMD’s & Results presentations)
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BLOOMBERG PLUG…….!
15%
17%
17%
31%
32%
49%
83%
Baseline
Zacks
Value Line
FactSet
S&P/Capital IQ
Thomson Reuters
Bloomberg
External Databases/Resources Used When Reviewing Stocks And Making Investment Decisions* (Aided)(Total Global Buy-side December 2014, n=354)
*Multiple responses
BLOOMBERG INVESTOR RELATIONS SERVICE SUITE
Bloomberg offers:
• Investor connection – access 450,000+ existing and new investors backed up with strategic calls and virtual roadshows, Contact IR button
• Market intelligence – access research reports and peer transcripts, analyse competitors and industry data, aggregated social media statistics
• Visibility analysis – see how your company is perceived by analysts / investors, how can you improve vs peers
• Terminal functions – see valuations, holdings data, broker influence, investor information, trading and market data on your company and peers
• Event planning – Promote company events, participate in industry events
• Media opportunity – deliver earnings calls, capital market days, access Bloomberg TV
• 24/7 expert access – online help for extracting data, compiling charts and tables for presentations, bespoke excel solutions
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THE END
Thank you for listening to me.
Any questions?