NBIM will not pay for non-deal roadshows
Norges Bank Investment Management (NBIM), the world’s largest sovereign wealth fund, has appealed to issuers to make sure meetings with management still happen, amid Mifid II concerns.
The investment manager, which holds approximately $1 tn in assets, sent a letter to all of its portfolio companies on December 18, 2017, explaining that its policy of not paying for meetings will not change. The letter was shared exclusively with IR Magazine.
NBIM has been informed by some brokers that it will be offered meetings only if issuers request them, the letter states. The fund has therefore asked to be placed on issuers’ target lists in London, New York, Singapore, Oslo and Shanghai, and also encourages direct engagement with issuers.
‘NBIM works to safeguard and build wealth for future generations,’ Petter Johnsen, the fund’s chief investment officer for equities, tells IR Magazine. ‘We see access to senior management as being a central part of our investment process, and key to fulfilling our role as a responsible active owner. In sending this letter, we felt it was important to reiterate this message with the companies the fund owns to help ensure the level of access we currently receive does not change under Mifid II.’
Mifid II came into effect on January 3 this year. The EU regulation is designed to improve protection for investors by providing more transparency in the markets. Two of the biggest changes are the unbundling of research and the pricing of corporate access.
While there appears to be resignation from most of the investment community that it will absorb the cost of investment research, the regulation’s effect on corporate access is less clear. In a recent survey of institutional investors by the UK’s Investor Relations Society, 51 percent of respondents say they do not intend to make any payments for corporate access in the future. More than half (54 percent) of those surveyed also expect to see an increase in direct engagement with issuers this year.
Click here to see IR Magazine’s archive of Mifid II articles.