NYSE steps into gap left by sell side with corporate access days
The ongoing changes to the sell-side corporate access model have led a number of market participants to step up and offer alternative ways for companies and investors to connect.
Alongside technology platforms and IR specialists, stock exchanges are also getting in on the act. Last week, the NYSE hosted the latest in its Investor Access days, where small and mid-cap companies are invited to the exchange’s New York headquarters for meetings with long-term investors.
The program launched in late 2018 and has so far hosted more than 250 meetings, according to NYSE’s vice president of listings and services Chris Taylor. Days dedicated to the industrials, financial, healthcare and auto sectors are planned for the rest of the year.
A number of market trends are coming together to limit the opportunities for smaller companies that want to expand their investor base, Taylor tells IR Magazine. He references the ‘well chronicled’ impact of Mifid II as well as the growth of passive investing, which has shifted assets towards bigger companies.
The NYSE program is also designed to benefit smaller, active fund managers who need access to corporate management but may be overlooked by brokers, says Taylor. ‘They don't trade as often, and so they don't get the attention from the sell side that we think they deserve,’ he says.
The NYSE has begun by focusing the access days on sub-sectors where it has a strong presence. It aims to invite companies that fall within the $1bn-$10bn market-cap range, although that’s not a hard and fast rule. The first two events focused on energy companies – a sector that is important to the exchange but is currently under pressure and therefore ‘being ignored by investors right now,’ says Taylor.
On the investor side, the exchange works with a data services firm to target suitable attendees for each day and obtain contact information. The NYSE has also made contact with the growing number of internal corporate access teams on the buy side so they can manage involvement among their investment teams. ‘We're really trying to raise awareness for this across the board,’ says Taylor.
While outreach is focused on long-term investors, no firms are excluded and ultimately the issuers can decide if they want to take a meeting or not, he adds.
One of the main benefits of this kind of event is that the company and investors get to meet without any third-party involvement, says Taylor. ‘We are bringing folks together, but we’re not part of the meeting. We're not doing any follow up. It really allows the investor and the issuer to have a very substantive meeting on their own,’ he says.
The move by the NYSE to set up its own event series highlights how companies, investors and third parties are exploring new ways to conduct corporate access outside of the traditional sell-side model.
While investment banks are expected to remain the main channel for corporate access, many companies are today trialing new approaches to meet investors, such as digital platforms that facilitate contact or self-directed roadshows.
Meanwhile, a growing number of asset managers are building out their own corporate access capabilities to support more direct contact with companies. Five of those firms plan to put on their own series of investment conferences, starting in spring next year.
The NYSE is one of a number of stock exchanges that have sought to support their listed companies through providing corporate access services. In 2015, the London Stock Exchange set up a digital platform to help companies, investors and intermediaries manage IR activities, including corporate access.
More recently, both the Warsaw and Moscow stock exchanges signed partnerships with Closir, a corporate access platform that specializes in frontier and emerging markets companies.