The Year Ahead: The Depositary Receipts Market in 2021

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The Year Ahead: The Depositary Receipts Market in 2021

April 2021

This year we’re taking a different approach to sharing our perspectives on the Depositary Receipts (DR) market. Rather than a recap of the past year’s activity, we’re focusing on where we are today and what lies ahead for 2021. 

As Chris Kearns, CEO, Depositary Receipts, states in the video below, the fundamental value of DRs remains proven, as institutional DR AUM increased 23% year over year to $1.3T.1 Withstanding the tests of a very challenging environment, global investors are seeking access to growth opportunities around the world. Similarly, growing companies are actively seeking capital, a broader investor base and more international exposure with 143 DR offerings raising a total of $51.8B.2


Watch the video and explore the content below for more in-depth views of the trends that will shape DRs in 2021.

How We Got Here: Short- and Long-Term Impacts of COVID-19

By March of 2020, the impact of COVID-19 on Depositary Receipts activity had become truly global. In-person meetings both before and after an IPO came to a halt. Staff responsible for day-to-day operations of a DR program shifted to remote working. The drive for greater digitization and efficiency had existed prior to the pandemic, but was sharply accelerated by the rapidly changing circumstances throughout 2020. That shift will continue in 2021.

Despite the challenges, DR activity has reached a level of “business as usual.” We are especially pleased to note that our teams continued to deliver seamlessly. Virtual meetings and digital signatures became a norm, and we believe some of these efficiencies will last even as market conditions change. While the desire for face-to-face discussions will return in some areas when first establishing relationships, many routine activities are likely to keep a strong virtual element.

“The fact that you can carry out multibillion-dollar transactions without having a face-to-face meeting really changed minds and behaviors.”

— Ed Piedra, Head of Latin America, Depositary Receipts

COVID-19 also raised new questions. Market participants may well think more carefully about attending certain equities conferences or other large-scale sell-side events. The cost and effort of travel may seem less justified going forward. We also observed that Investor Relations (IR) teams started looking at big-picture topics such as ESG, disclosure and transparency. These questions will influence their agenda this year and beyond.


But in the big picture, DR transactions found their footing. The resiliency of the market shows the durability of investor interest in global growth and global companies’ desire for capital.


Learning from the Pandemic

  • Investing in business continuity prevents operational disruption in DR programs, even with unprecedented events.
  • Some portions of pre-IPO activity can be conducted effectively using virtual tools, although face-to-face events will likely resume.
  • Efficiency and convenience mean that many of the more routine aspects of Investor Relations may never go back to in-person formats.
  • Investors, analysts and other stakeholders look for proactive crisis communications from global companies listing on local exchanges.


Environmental, Social and Governance (ESG) in DRs

Broad interest in environmental, social and governance (ESG) investment considerations has already had an impact in the world of Depositary Receipts. In 2020, the impacts of COVID-19 helped bring social impact to the fore. Environmental impact will likely see a high level of attention in 2021.


While ESG disclosure frameworks and relevant regulations are still evolving, investor demand for sustainability in their investments in 2021 will likely push issuers in the U.S. and Europe to increase ESG disclosure while enhancing the quality of such disclosure. This demand places the onus on IR teams to address expectations for clear, meaningful and quantifiable information as they fold ESG into their interactions with investors. We think sustainability will become an increasingly integral part of IR planning and communication with investors. Progress toward good data and consensus on metrics will be a major force to watch this year. As these trends unfold, we expect companies to find new ways to quantify the impact of ESG initiatives while also reporting on their material efforts to reduce environmental footprint and increase workforce diversity and equity with linkage to both risk and opportunity to their business. We also expect to see companies making clearer and more-specific statements around social injustice stances. 

“ESG disclosure frameworks are converging, while investors seek to understand the material impact of ESG initiatives.”

—Karen Bodner, Head of Global Investor Relations Advisory, Depositary Receipts

It also remains important to highlight the governance component of ESG, even if environment and social impact get more media attention. Questions about decision making, transparency, crisis management, and board oversight and independence continue to be an important part of investor criteria when looking at issuers domiciled outside their market. Governance practices and governance risks remain top of mind.


Trends to Watch

  • ESG disclosure frameworks and taxonomies are converging.
  • Regulatory changes may also set additional ESG disclosure requirements.
  • The focus on environment is likely to increase in 2021, while COVID-19 raised the profile of social impact in 2020.
  • Investors may become more interested in a company’s diversity and social justice efforts.
  • Pandemic changes to IR also reduced the carbon footprint of IR, and this “Green IR” may remain a significant part of business as usual.



Global Trends in Investor Relations

ESG and the Earnings Call: Closing the Short-term/Long-term Gap

Biotech & Pharma Investment Themes


COVID-19 has increased investor attention on health and health care innovations. That trend will continue in 2021. Small, innovative companies looking to raise capital via IPOs outside their domestic market find a high degree of potential interest. Depositary Receipt programs help facilitate that access both from an issuance and governance perspective. The 56 Biotech & Pharma offerings in 2020, raising $6.39B, underscore that trend.2


Within Biotech & Pharma, investors typically have deep sector expertise. In turn, issuers need support to connect with those investors pre-IPO and via ongoing Investor Relations activity. It is about building a bridge between the science and the finance.

“We are seeing a positive shift in narrative and interest for companies in Biotech & Pharma that could lead to a return of more generalist capital to the space.”

—David Stueber, Head of Europe, Middle East and Africa, Depositary Receipts

Top Domiciles with Biotech & Pharma IPOs in the U.S.

  1. Ireland
  2.  Spain
  3. Denmark
  4. Netherlands
  5. United Kingdom

Top Indications for Biotech & Pharma IPOs in the U.S.

  1. Oncology
  2. Central Nervous System/Pain
  3. Hematology
  4. Ophthalmology
  5. Cardiovascular

Source: BNY Mellon Biotech Landscape Study 2020


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Trends to Watch

  • Public health emergencies and technical innovation are creating more attention-grabbing catalyst events.
  • Science-driven management teams look for high levels of support both pre- and post-IPO to guide them through unfamiliar subject matters.
  • Fast growth in companies and investor interest raises the probability of follow-on offerings in the Biotech & Pharma space.
  • The sector may see a shift from specialist investors to more generalists as hot innovations hit the general news cycle.

China and U.S.-Listed Chinese Companies

Various turbulence factors aside, Chinese companies have continued to list in the U.S. at an extremely strong pace. In 2020 there were a total of 26 U.S. IPOs of Chinese companies, raising $11.8 billion in capital.2 It was the busiest year on record for U.S. IPOs by Chinese companies. We are very pleased that BNY Mellon as depositary bank supported more APAC-based client IPOs (ranked by volume and by proceeds raised) than any other depositary bank.2 With China showing signs of recovery from the economic impacts of COVID-19, U.S. investor interest has been keen.


We also expect to see continued progress in Investor Relations as Chinese companies become more adept at meeting the expectations of U.S. investors, with ESG quickly becoming a key part of the conversation. Adoption of the virtual environment, spurred initially by COVID-19, has brought notable efficiencies to investor targeting and outreach as well.

“The numbers don’t lie. There is continued U.S. investor interest in exposure to Chinese companies looking to fund growth by raising capital.”

—Frank Giglio, Head of Asia-Pacific, Depositary Receipts



IHS Markit, institutional filings as of December 31, 2020

2 Based on publicly available information from BNY Mellon, JP Morgan, Citibank and Deutsche Bank as depositary banks. Data as of December 31, 2020

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 and wealth management and investment services in 35 countries. As of Dec. 31, 2020, BNY Mellon had $41.1 trillion in assets under custody and/or administration, and $2.2 trillion 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 (NYSE: BK). Additional information is available on Follow us on Twitter @BNYMellon or visit our newsroom at for the latest company news.


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