Institutional investment drops at small-cap companies

Percentage of shares held by institutions falls below 50 percent mark

Institutional investors make up just 47 percent of shareholders in small-cap companies – the lowest level of institutional ownership across any market cap – according to new research from IR Magazine.

The finding, from the Global Investor Relations Practice Report 2016, also highlights a continuing decline in levels of institutional investment into small-cap companies globally. In 2014, 55 percent of shares in the smallest firms by market cap were held by institutions, dropping to 50 percent in 2015 before a further 3 percentage-point fall in 2016.

This compares with 59 percent institutional ownership at mid, large and mega-cap companies, while 56 percent of stock globally is held by institutional investors.

At the same time that institutions have been cutting investment to small caps, the proportion of shares held by retail investors has remained the same, at 28 percent of the investor portfolio – by far the largest retail ownership across the different cap sizes measured.

State ownership and investment from sovereign wealth funds stands at 3 percent, founder or founding family ownership at 18 percent, and ‘other’ share ownership at 4 percent.

Click here for more information on the Global Investor Relations Practice Report 2016 or to download your copy now.


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The pros and cons of four financing options

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In this report, OTC Markets examines the pros and cons of common debt and equity financing methods used by smaller companies:

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This paper is part of a series dedicated to addressing small-cap investor relations issues. You can revisit the first two reports in the series here:

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