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, 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.
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. 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%.
Source: Ipreo 2014
From 2012 to 2014, total equity value invested outside of North America grew by more than 30%. Growing assets and a growing focus on diversification, however, has placed new strains on the management teams of non-U.S. issuers, as they try to meet the demands of the North American investor community. To meet these demands, non-U.S. issuers must refine their targeting and corporate access strategy in order to maximize management time, energy, and effectiveness. This study attempts to frame both the challenge and the opportunity,
A majority of study respondents state that a lack of corporate access eliminates a company from their potential investment universes, explaining that face-to-face meetings are a necessary component of their due diligence process.
“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.”BNY Mellon Depositary Receipts
For the 60% of investors who absolutely require them, in person meetings are important in judging management’s knowledge and proficiency; building trust and rapport with the team; and enabling investors to better understand the company’s strategy, regional market dynamics, and competitive threats. Importantly, investors state that they cannot solely rely on sell side reports to learn about non-North American companies and that a lack of corporate access gives the impression that management is intentionally withholding important information or is generally uninterested in developing relationships with new investors.
Source: Ipreo 2014
To learn more, download Insights into North American Investors' Views of Corporate Access.
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