Administration October 25, 2010

Investor Relations Units Connecting with Hedge Funds, SWFs

October 25, 2010 (PLANSPONSOR.com) – Companies worldwide are adapting their investor relations (IR) strategies to reach out to hedge funds and sovereign wealth funds, according to a BNY Mellon poll.
Reported by

A BNY Mellon news release said 93% of companies in the survey meet with hedge funds, versus 89% in 2009, and 24% of a firm’s investor meetings are with hedge funds, up from 16% in 2009. The reasons why some firms do not meet with hedge funds include lack of information on a fund’s strategy and shorting risk 

Meanwhile 47% of companies meet with sovereign wealth funds (SWF) and an additional 23% are considering meeting with them. Western European companies are the most likely to meet (56%) or consider meeting (44%) with SWFs. North American firms are least likely to engage sovereign wealth funds.

BNY said 22% of companies are considering a secondary listing in an emerging market, outside their home area. Among these firms, the large majority (70%) identified a listing in China or Hong Kong of strategic interest.

The survey also found:

  • Social responsibility reporting is most common in Western Europe (77% of companies issue SRI/CSR reports) and Latin America (72%), in contrast to firms in Asia-Pacific (36%) and North America (29%).
  • Only 9% of companies use social media to communicate with investors, but 35% are looking for more information on its potential uses. Of those that do use social media, Twitter is the preferred medium, followed by corporate blogs.
  • 82% of companies provide financial guidance, especially those in Western Europe (89%) and North America (86%). 70% of firms in the BRIC countries offer such guidance, compared to 82% of companies in non-BRIC emerging markets.
  • Over the next three years, North America (77%) and Europe (70%) will continue to be the major regions of focus for growth of investor opportunities, followed by Asia (48%). 
     

“We’re seeing companies truly act more globally to raise their IR profile, from the time spent with hedge funds and sovereign wealth funds to the burgeoning use of secondary listings that target regional high growth markets,” said Michael Cole-Fontayn, chief executive officer of BNY Mellon’s Depositary Receipts business, in the news release.  “IR officers are making a commitment to give fair and equal access to all investors, no matter who or where they are, to make sure they have the best information about their company.”

 The full report is available online at http://www.adrbnymellon.com/IRSurvey.jsp.

«