Corporates report decrease in broker reliance for targeting
IROs are becoming less reliant on brokers for investor targeting, according to a new report from IR Magazine.
The Investor Targeting report shows that globally, more than a fifth (21 percent) of companies say they have reduced their reliance on brokers for targeting over the past year. This is a net 12-percentage point drop however, as 9 percent say they have increased their use of brokers for investor targeting over the past year.
Europe – where Mifid II came into force in January 2018 – is the region where the highest number of firms report a reduction in the use of brokers for investor targeting, at 24 percent. But with 13 percent of European companies saying they have increased their use of brokers for this task, it is North America that reports the highest net drop.
There is a 16-percentage point difference between those North American firms that have seen a decrease in broker use (21 percent) and those who have seen an increase (5 percent).
The gap is closest among Asian companies, where just 2 percentage points separate the number of firms reporting a decrease in broker use for targeting over the past year (15 percent) and those reporting an increase (13 percent).
Among the different cap sizes studied, small-cap companies report the lowest net decrease in broker reliance for investor targeting at 12 percentage points as 21 percent of small-cap companies report a drop in broker use for this task, while 13 percent report greater reliance. Large caps have not only the highest net drop with a 19-percentage point difference, but is also the group reporting the highest levels of broker reduction for targeting at 27 percent.
No mega-cap companies say they have increased their reliance on brokers for investor targeting.
The report also looks at how investor use of brokers for corporate access has changed over the past year – with largely the same overall, global findings.
‘While broker use is still high, their role as matchmaker between company and investor appears to be declining,’ writes Lloyd Bevan, report author and IR Magazine head of research.
Click here for more information or to download your copy of the IR Magazine Investor Targeting research report.