NEW YORK, Oct. 15, 2014 /PRNewswire/ -- North American investors say they need more and better access to non-North American companies to gain greater confidence or initiate a position in international firms, according to a new study released by BNY Mellon, a global leader in investment management and investment services.
The survey, Insights into North American Investors' Views of Corporate Access, was conducted by Ipreo, an independent IR market intelligence and analytics firm, and BNY Mellon in spring of 2014. It examined how the North American investment community perceives its current access to companies outside the U.S and Canada. Forty investment firms with more than $3.1 trillion in combined equity assets under management took part in the study, with an average portfolio allocation to non-North American equities of 31.5%.
North America's asset management community has been resurgent. Market prices and assets under management have recovered from post-crisis lows and more firms have entered the marketplace. In the U.S. and Canada, $516 billion of non-North American holdings are now held in the form of depositary receipts, a 45% jump since 2008. In addition, from 2012 to 2014 total equity value invested outside of North America grew by more than 30%.*
"Asset growth and greater focus on diversification has placed new strains on the management teams of non-U.S. companies as they try to meet the demands of North American investors," said Christopher M. Kearns, CEO of BNY Mellon's Depositary Receipts business. "To meet these demands, issuers worldwide need to refine their targeting and balance how they serve existing shareholders with the most effective ways to engage new investors. Providing sufficient corporate access is a crucial gateway."
Key findings of the survey include:
- 43% of investors rate their current level of corporate access to non-North American companies as Average or Poor, driven by dissatisfied investors in secondary investment cities
- 60% of respondents state that lack of corporate access eliminates a non-North American company from their investment universe
- Regardless of satisfaction with their current access, over three-quarters of respondents say they face limitations in obtaining access to non-North American firms, especially for investors based outside of primary investment cities
- 26% of investors have reduced the number of meetings arranged by the brokerage community. For those with greater than $50 billion in EAUM, half of their meetings with non-North American companies are organized independent of the sell side
- Before initiating a position in a non-U.S. company, 72% of responding investors require at least one meeting with senior management to establish confidence in the team and better understand the firm's story and strategy. Once invested, respondents say they require one meeting per year (though they prefer two) to keep up-to-date on operations.
"There are more than 1,200 active asset management firms in the U.S and Canada investing globally that weren't on the radar 10 years ago," said Guy Gresham, head of the Global IR Advisory team in BNY Mellon's DR group. "This new research sheds light on the views of international equity managers of all sizes, identifying where they simply are not getting adequate access to international companies. Our goal is to help improve understanding and connectivity between issuers and investors that can benefit both sides."
The full report is available online at www.bnymellon.com/dr
BNY Mellon acts as depositary for more than 2,700 American and global depositary receipt programs, acting in partnership with leading companies from 68 countries. BNY Mellon is committed to helping securities issuers access the world's rapidly evolving financial markets and delivers a comprehensive suite of depositary receipt services. Learn more at www.bnymellon.com/dr
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 management and investment services in 35 countries and more than 100 markets. As of June 30, 2014, BNY Mellon had $28.5 trillion in assets under custody and/or administration, and $1.6 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). Learn more at www.bnymellon.com, or follow us on Twitter @BNYMellon.
This release is for informational purposes only. BNY Mellon provides no advice nor recommendation or endorsement with respect to any company or securities. Nothing herein shall be deemed to constitute an offer to sell or a solicitation of an offer to buy securities. Depositary Receipts: Not FDIC, State or Federal Agency Insured; May Lose Value; No Bank, State or Federal Agency Guarantee. BNY Mellon provides no advice nor recommendations or endorsement with respect to any company, security or products based on any index licensed by BNY Mellon, and we make no representation regarding the advisability of investing in the same.
* Source: Ipreo, 2014. All data as of March 31, 2014, unless otherwise indicated.
Joseph F. Ailinger Jr.
SOURCE BNY Mellon