The CEO of alternative corporate access provider Meetyl talks changing regulation and IR team sizes
Founded in 2012 by Wall Street and technology professionals, Meetyl is one of the new breed of platforms that offer companies and investors an alternative to the traditional ‘corporate access by broker’ model.
Its website explains that Meetyl is a browser-based software application that uses an algorithm to connect institutional investors and companies ‘based on overlapping, user-defined interests’. Investors can communicate securely and privately with companies and also receive inbound meeting requests. The website says it also offers ‘new meeting ideas and better ways to approach the due diligence process.’
The San Francisco-headquartered firm initially focused on the US West Coast, with its first non-deal roadshow in Denver, but soon expanded. Meetyl held its first non-deal roadshow for a foreign company – a Chinese firm – in August 2013, its first for a large cap – an oil company – in November that same year and launched Meetyl Europe in July 2014 before being acquired by Glass Lewis a couple of months later. The firm now has employees in the US, the UK and Ireland.
Here, Jeffrey Tha, co-founder and CEO, talks to IR Magazine about what Meetyl has to offer, how regulation is changing corporate access and how IROs can be prepared for the future.
What do you think sets Meetyl apart from other alternative corporate access providers?
Meetyl has a large global network of live users, and those users have the ability to directly engage with each other privately and efficiently. The size and diversity of the user base is also an advantage: currently more than 600 firms are live on the platform, including broad corporate representation across market caps and geographies, and a variety of institutional investors including asset managers, pension funds and family offices. The network continues to grow rapidly in the US, Canada, Europe and Asia.
In what ways is regulation affecting the business?
New regulations, though in many cases not finalized, are already having significant impact on the corporate access process. Global investors are looking to address requirements of UK regulator the Financial Conduct Authority and Europe’s MiFID II regulation in a manner that is clearly and demonstrably compliant, but can also support efficient, secure and cost-effective workflow for their engagement activities. Meetyl meets these requirements; in fact, there is no cost for institutional investors to access the network or accept meetings from companies.
So who pays in the Meetyl model?
The corporates that have the option to subscribe to our premium product – we have a basic model and a premium model on the corporate side. The basic model is completely free of charge and allows companies to access the platform and efficiently set up self-directed, targeted meetings with institutional investors that overlap in interests (sector/subsector, market cap, investment region) using our workflow solution.
The premium version adds additional analytics relating to money flow and comparables and we’ll be adding more features as time goes on. This optional, premium version is offered to companies via an annual license. Over time, we expect our data and access to the institutional investor community to become more valuable to corporations.
In what way do you think incoming regulation has affected corporate access so far?
The new rules have really heightened awareness across the investment community as to the impact of soft dollars and the role they play with broker relationships. The number of companies performing direct engagement without an intermediary was already growing, and these new rules have accelerated that trend. On the buy side, we have certainly seen increasing interest and activity in large asset managers building their own internal corporate access teams, so the investment is significant.
Do attitudes to corporate access differ between clients in different countries or regions?
Regionally, we are seeing more rapid changes in Europe than in other regions such as the US or Asia. European regulatory changes are providing a significant tailwind for the adoption of platforms like ours; that’s why we have personnel in London today. We also think that as large, global asset managers with offices worldwide adhere to UK and European policies, those same practices will likely flow into other regions such as the US and Asia. From what we’ve observed so far, however, individual company and investor needs play a very large part, too.
We have also found that the size of the IR team is often an important factor; the larger teams have greater capacity to explore independent marketing and investor outreach, while one-person teams need tools that magnify their resources. With proper applications that leverage high-quality relevant information, we think the ability to engage directly with investors can be available to all companies.
What advice would you offer IROs when it comes to corporate access regulation and potential changes?
Given the many moving parts and rapid pace of change, our advice would be for IROs to stay proactive. In addition to monitoring regulatory changes, stay on top of what your peers are doing in terms of best practices. Also, speak with asset managers to hear how they are being affected – they are investing a significant amount of time and money in their corporate access activities and will be key influencers in any new IR workflows.