Buy side leads increase in non-domestic engagement, study finds
The shift to virtual meetings during the Covid-19 pandemic has greatly increased the engagement of investors with companies outside of their region, according to the latest report on corporate access from Corporate Secretary sister publication IR Magazine.
Research conducted in the fourth quarter of 2021 shows two thirds of buy-side investors and analysts increased their non-domestic engagement over the past year, with 42 percent identifying a large increase. This compares with a quarter of sell-siders seeing a large increase and 58 percent seeing an increase in general.
More than two thirds of European investment community members, incorporating both buy side and sell side, have broadened their corporate access by increasing engagement with companies outside of their region. But the most dramatic shifts are found in Asia, where almost half of the investment community has registered a large increase in non-domestic corporate access.
Since the start of the pandemic, 38 percent of investor relations officials (IROs) have seen an increase in meetings with investors from outside their region, compared with 18 percent who have seen a decrease. This has been driven by developments in investor engagement at larger companies, with 56 percent of mega-cap IROs seeing an increase in meetings with non-domestic investors.
‘GREATEST EXPECTATION OF FUTURE INCREASE’
Further, 62 percent of IROs expect meetings with investors outside their region to increase over the course of this year, with only 1 percent expecting the number of these meetings to fall. The greatest expectation of future increase is found among those who have seen the lowest increase in such meetings over the past year. While just over a third of IROs in Asia saw a rise in meetings with investors outside of the region in 2021, more than seven in 10 expect to see an increase in 2022.
This increase in engagement between investors and companies from differing regions appears to be bearing fruit. More than a third of buy-side respondents to the research have invested more outside of their region since the start of the pandemic than previously, compared with just 8 percent cutting back on non-domestic investment. The result of this is seen most among the shareholder base of mega-cap companies, with approaching three in 10 having witnessed an increase in non-domestic shareholding, while just 8 percent have seen a decrease.
IR Magazine’s second corporate access report of the summer looks at domestic and non-domestic engagement between investors and companies and covers the views and practices of both IROs and the global investment community. Research was conducted during Q4 2021 and Q1 2022 with 440 respondents taking part.
Click here to view and download IR Magazine’s Corporate Access I research report.