^{Advertisement feature ^{US investor views
on international corporate access}}

US investor views on
international corporate access

Throughout the spring and summer of 2020, we asked investment professionals at US-based buy-side institutions about the importance of direct, in-person access to C-level executives and IROs when investing in issuers headquartered outside the US (ie, international issuers). Download the full report here.Our findings and analysis focus on investor satisfaction with the level of corporate access and differences between investors based on their location, size, investment style and turnover, as we did in a 2016 BNY Mellon survey of North American investor sentiment on international corporate access. The current study also reflects new trends in the 2020 market, including the effects of the Covid-19 pandemic. Via telephone survey interviews conducted by the analytics firm Greenwich Associates, we asked 38 investment professionals questions on:

their level of satisfaction with access to international issuers overall

the impacts of Covid-19 on international corporate access

the importance they place on ESG considerations

the role of the availability of DRs in their decision-making

their spending on corporate access.

All quotes used in this report are anonymous.Surveyed investor profile
We conducted this study to uncover core discrepancies, concerns and trends coming from asset managers in the US with equity assets under management of less than $50 bn. In total, this tier accounts for 4,171 firms with more than $5.9 tn of actively managed equity assets. US asset managers in our survey sample range from $500 mn to $45.4 bn in equity assets under management, with a total of $610 bn in investments managed by 38 firms.In some cases where respondents didn't answer questions or didn't provide data, percentages have been rebalanced to reflect the total number of responses to each question. In all other cases, we calculate percentages using the full sample size of 38.

Summary of findings

The importance of corporate access for investors

Nearly all (97 percent) of surveyed investors prefer some form of access to international companies’ senior management before initiating an investment.

21 percent of surveyed investors consider in-person access a requirement.

89 percent of low-turnover investors and 68 percent¹ of moderate-turnover investors report a need to meet management after making an investment, compared with 33 percent of high-turnover investors.

88 percent of upper-band investors say they need to meet with C-suite management rather than IR professionals, compared with 50 percent of middle and lower-band investors.

Investor satisfaction with corporate access

63 percent of surveyed investors state they are either extremely or somewhat satisfied with their level of direct corporate access overall, leaving opportunities with 37 percent of investors who are either neutral or somewhat dissatisfied.

Four out of five respondents who express a degree of dissatisfaction with their international corporate access are located in secondary cities.

Impact of Covid-19 on international corporate access

Most surveyed investors expect corporate access travel to resume at some point in 2021.

The general view of surveyed investors is that virtual tools have helped replace in-person meetings. But many still express an underlying desire to meet management face to face as a means to build rapport.

Most surveyed investors expect that changes made in response to Covid-19 (including greater use of virtual meetings and supporting technology) will continue in some form for the long term.

Importance of ESG considerations

82 percent of all surveyed investors say they find ESG considerations to be important during due diligence.

100 percent of investors in the upper equity-assets-under-management band affirm the importance of ESG.

Availability of DRs

The benefit of DR availability inversely correlates to fund size: while 75 percent of lower-band investors say they require DRs in order to invest in international issuers, 55 percent in the middle band and 25 percent in the upper band report that requirement.

Investors who indicate that DRs are not a requirement for investing in international issuers mention that DR availability could increase the amount they are able to invest in a particular company or that it could help with certain liquidity needs.

Spending on corporate access

Respondents report that corporate access expenditures account for an average 38 percent of annual equity research spending with sell-side brokers.

At the high end of the spending range, corporate access expenditures account for between 61 percent and 80 percent of spend (ie, for approximately one quarter of the surveyed investors).

Use of resources and intermediaries

39 percent of surveyed investors say they use third-party resources beyond sell-side brokers to supplement international corporate access efforts in 2019.

Investors in secondary cities are 50 percent more likely (45 percent versus 31 percent) to tap third-party resources beyond brokers to supplement their 2019 international corporate access efforts.

¹68 percent of moderate-turnover investors indicate a need to meet, 27 percent say they
do not need to meet, and 5 percent say they ‘don’t know’

About BNY Mellon

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment & wealth management and investment services in 35 countries. As of March 31, 2021, BNY Mellon had $41.7 tn in assets under custody and/or administration, and $2.2 tn in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation.

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