INVESTOR TARGETING DECEMBER 2015 RECENT BUY-SIDE TRENDS IN EUROPE - - PowerPoint PPT Presentation

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INVESTOR TARGETING DECEMBER 2015 RECENT BUY-SIDE TRENDS IN EUROPE - - PowerPoint PPT Presentation

Sep 15, 2022 374 likes •552 views

INVESTOR TARGETING DECEMBER 2015 RECENT BUY-SIDE TRENDS IN EUROPE Continued growth in low cost ETFs; ETF AUM has surpassed $3tn in the first half of 2015 Vangu guard d attracted $30bn in inflows in Q3 (Lipper) and ranks as top

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SLIDE 1

INVESTOR TARGETING

DECEMBER 2015

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SLIDE 2 2

RECENT BUY-SIDE TRENDS IN EUROPE

  • Continued growth in low cost ETFs; ETF AUM has surpassed $3tn in

the first half of 2015

  • Vangu

guard d attracted $30bn in inflows in Q3 (Lipper) and ranks as top buyer across Nasdaq’s EMEA clients (+$5.2bn). Also one of top buyers across German clients.

  • Mellon Capital Management among top buyers in Europe and in

Germany

  • Har

arris As Associat ates es L. L.P. and Amu mundi di As Asset et Man Manag agem emen ent rank as largest active buyers across Nasdaq’s European clients (+$2.1bn and +$1.8bn); both rank as top buyers across our German clients YTD

  • No

Norther ern Cross an and Cap apital al Res esear earch are among top sellers across

  • ur German clients YTD. Both investors experienced fund redemptions

in Q3 ’15

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SLIDE 3 3

SWF TRENDS INCREASING GLOBAL EQUITY EXPOSURE

  • No

Norges es remains the largest holder across Nasdaq’s German clients

  • Hong Kong-based SAF

AFE E Inve vestme ment Compa mpany still buying Europe (+$829M in Q3) and is the second largest buyer across Nasdaq’s German clients YTD

  • SWFs increasing global equity exposure - e.g Korea

ea Inve vestme ment Cor

  • rpor
  • ration
  • n and Emplo

mployees Provi vide dent Fu Fund.

  • d. Abu

Abu Dhabi abi Inves estmen ent Aut uthor

  • rity

y appointed new U.S. head of investments

  • SWF

SWFs withdraw from external asset managers to manage more in-house

China / $547 B Kuala Lumpur / $148 B Korea / $84 B

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SLIDE 4 4

OTHER TRENDS WE ARE WATCHING INVESTOR ACTIVISM

  • Acti

tivists ts increasingly targeting European companies include Cev evian an Capital, Kni night ht Vi Vinke, , Elliott and Tria Trian

  • 63%

% of North American and European IROs report senior management is “not very concerned” about being targeted by activists (Source: Rivel Research)

  • Tech, Financials, Basic Materials, Energy and Industrials amongst the

most targeted sectors in Europe

  • In Eu

Europe, e, 45 45 ac activist cam ampai aigns lau aunched ed YT YTD, compared with 44 in 2014 (Source: Activist Insight). 305 305 a activi vist c campa mpaign gns la launched d YTD D in t n the he U U.S.—set to be the highest on record

  • Activists increasingly pa

partnering g with la large ge mu mutual l fu funds ds, like Franklin Templeton and the Capital Group for support

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SLIDE 5 5
  • International investors make up 86.3% of the free float shares across
German companies
  • On average, Europe ex-Germany and US investors continue to have a
strong presence across German Equities
  • There was a slight decline in US-based investment since March ’15,
although this could be temporary
  • Some major investors experienced fund outflows YTD and have shown
selling momentum across our German client base
  • Macro view on Europe and Germany. Recently, strategists at Goldman
Sachs have estimated that US flows into Europe have slowed since the surge in buying in the spring/early summer and US investors are roughly neutrally positioned in terms of European ownership.

INVESTMENT TRENDS IN GERMAN COMPANIES

Dec 13 Dec 13 Dec 13 Dec 13 Dec 13 Jun 14 Jun 14 Jun 14 Jun 14 Jun 14 Dec 14 Dec 14 Dec 14 Dec 14 Dec 14 Mar 15 Mar 15 Mar 15 Mar 15 Mar 15 Jun 15 Jun 15 Jun 15 Jun 15 Jun 15 Sep 15 Sep 15 Sep 15 Sep 15 Sep 15 0% 5% 10% 15% 20% 25% 30% 35% United States United Kingdom Germany Rest of Europe Rest of World Average % Free Float by Geography for Nasdaq’s German clients * Based on Aggregated Shareholder Analysis YTD across Nasdaq’s German clients
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SLIDE 6

GERMAN COMPANIES

6

25%

OF IR BUDGET ALLOCATED TO ROADSHOWS/ INVESTOR MEETINGS

97%

32%

>50 CEO/CFO Group Discussions

81%

> 50 IR hosted one-on-one meetings

66%

> 50 one-on-one CEO/CFO meetings US East Coast Roadshows

72%

US West Coast Roadshows

US

51%

Asia Roadshows

ASIA

Up from 96% in 2014 Down from 75% in 2014 Up from 48% in 2014 Down from 29% in 2014 Down from 35% in 2014 Down from 86% in 2014 * Source: Extel WeConvene Survey 2015 Down from 75% in 2014
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SLIDE 7

MARKET SIZE – HOW DO YOU TARGET?

Market Size 7

$32

TRILLION

TOTAL EQUITY ASSETS held by global investment managers

8,500

FIRMS that make up the institutional universe

141,000

BUYSIDE CONTACTS tracked in our contact management system

59%

ACTIVE ASSETS held by U.S. institutions

30,000

MUTUAL FUNDS we follow around the globe

$24.8 TRILLION

ACTIVE ASSETS managed globally

22%

ACTIVE ASSETS held by Euro institutions

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SLIDE 8

BUILDING A BALANCED TARGETING PLAN

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SLIDE 9

ASSETS HIGHLY CONCENTRATED

  • Concentrated at the top – the top 100 funds account for half the

actively managed assets of the largest 1,000 funds

  • Opportunity within the 100-500 tranche – targeting these funds opens

up an anoth ther er 30% o % of as assets

  • ets. “

. “Hal alo ef effec ect” t” p par arti ticular arly f for smal all-mi mid cap c p compa panie nies

  • Top 1,000 Active Institutions in Descending Order by EAuM
TARGETING INTERNATIONAL INVESTORS 9
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SLIDE 10

NORTH AMERICAN METROS BY TIER

Note: EAuM based on active funds, excluding index and broker-dealers. TARGETING INTERNATIONAL INVESTORS 10
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SLIDE 11 11

HOW TO IDENTIFY KEY INVESTORS/PROSPECTS?

Invested in direct sector peers

Attracted to company’s fundamentals – sector agnostic

Runs a global sector/regional fund with significant PP

Bullish trends – sector, geographical, regional, peers, fund inflows

Tier 2 pool of asse ssets, ‘Halo’ effe ffect and d Sma mall ll Cap p ta targeti ting

Uncover decision makers

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SLIDE 12

LARGE PLAYERS IN SECONDARY MARKETS

Large asset managers outside the main investment centers Solid anchors to a Tier 2 roadshow Sometimes an underweighted broker priority based on commission flow and not necessarily invested in your peers

Institution Location Equity Assets ($B) Investment Style Turnover (%) Barrow Hanley Dallas, TX $50 Income Value 13% PNC Wealth Mgmt Philadelphia, PA $43 Core Growth 11% Marsico Capital Management Denver, CO $22 Core Growth 73% Nuveen Asset Management Chicago, IL/Minneapolis $13 Core Value 50%

TARGETING INTERNATIONAL INVESTORS 12

Favourable valuation and above market shareholder yield

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SLIDE 13

TARGET FRAMEWORK

R ec ommended Ac c ess R a nk De sc ri pti
  • n
# F i rm s De sc ri pti
  • n
# F i rm s De sc ri pti
  • n

Core shareholders exhibiting risk e.g. top 50 holders 16 Highest impact and fit targets and holders with significant upside 38 1x1 meetings Warrant 1:1 management access Overinvest time and resources

Medium to large holders with moderate risk or upside e.g. 51-100 10 High quality firms with medium compatibility/impact 69 1x1 or Small Group meetings Group or IR to proactively communicate with and warrant management access where appropriate

Small or transient holders with moderate to no upside e.g. fast-money in top 100 6 Good firms with low compatibility and impact 95 Small or Large Group meetings Pipeline builders, itinerary fillers, resource for market intelligence

 Top holder that is index/quant/passive

  • Do not meet
Passive, Index, Quant, IR-immune

T OT AL : 32 202

T OT AL 234 Holders to Ma inta in T a rg ets to Develop

A target framework should cover bo both th key ey holder ers to to m mai aintai tain an and q qual alified ed tar target f et funds. Unde nderstand y nd your current nt sha hareho holde ders a and nd cons nside ider b both h Risks an and O Opportu tuniti ties es. . Prospec ects ts al aligned ed with th c curren ent t an and futu ture e str trateg ategy

TARGETING INTERNATIONAL INVESTORS 13
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SLIDE 14

CONSISTENT MEASUREMENT

TARGETING INTERNATIONAL INVESTORS 14

Track acking C ng Conv nver ersion

OUT COME Ja n 20XX - Ma r 20XX Outcome measures the extent to which targeted investors bought or sold our stock versus our peers. YT D SHARE CHANGE (in millio ns)  me t  no t me t Rank

  • 11
+7

  • 3
+10

+1

AL L

  • 14
+18 T OP BUYE RS ME T (in millio ns share s) T OP SE L L E RS NOT ME T (in millio ns share s) Name Rank YTD ∆ Name Rank YTD ∆ Peer ∆ ($M) Barrow, Hanley, Mewhinney & Strauss, LLC 6.8 BlackRock Investment Management, LLC
  • 0.7
  • 3.6
Goldman Sachs Asset Management (US) 6.0 TIAA-CREF
  • 0.5
  • 34.5
Mitsubishi UFJ Trust and Banking Corporation 0.7 ING Investment Management (Netherlands)
  • 0.3
  • 60.6
Adage Capital Management, L.P. 0.6 Principal Global Investors (Equity) 0.0
  • 4.6
Robeco Institutional Asset Management B.V. 0.5 BlackRock Investment Management (UK) Ltd. 0.5 UBS Global Asset Management (Switzerland) 0.2 Sumitomo Mitsui Trust Bank, Limited 0.0 Shares Sold Net YTD ∆ Shares Bought
  • 4

+7 +1 +4

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SLIDE 15

KEY TAKEAWAYS

  • Pressures on the active management buy side and growth of passive investment

mean the need f he need for co compani panies es t to b be ef e effici cient ent and t and tar arget geted ed in n thei heir deal dealings ngs with ith in investor tors is on

  • nly g

y goin

  • ing to

to grow

  • w.
  • An effective targeting plan strikes a balance of ho

househo ehold nam d names es and and tier er 2 2 invest stors rs – focus on those that may not show up on broker roadshow lists due to location or lower turnover and AuM.

  • Re-emergence of stock pickers is good news for investor relations teams – work to

def define addi ne additional nal co compet petitors and and cr criter eria a for capi capital al o

  • utside co

de core e indu ndustry peer peers to validate existing targets and uncover new opportunities.

  • Lay out a framework by priority and assign an appropriate level of access – Thi

hink nk both both R Ris isks and O Oppor

  • rtu

tunitie

  • ities. This will make meas

easuring t ng the he impact pact of your targeting efforts much easier.

TARGETING INTERNATIONAL INVESTORS 15
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SLIDE 16

QUESTIONS?

TARGETING INTERNATIONAL INVESTORS 16 Disclaimer: "The opinions expressed in this (article/presentation) are those of the author and don’t necessarily reflect those of Nasdaq."