43% of investor respondents rate existing corporate access levels to non-North American companies as average or poor; 60% of respondents say lack of access eliminates a non-North American firm from their portfolio universe
North American investors say they need more and better access to non-North American companies to gain greater confidence or initiate a position in international firms, according to a new study released by BNY Mellon, a global leader in investment management and investment services.
The survey, Insights into North American Investors' Views of Corporate Access, was conducted by Ipreo, an independent IR market intelligence and analytics firm, and BNY Mellon in spring of 2014. It examined how the North American investment community perceives its current access to companies outside the U.S and Canada. Forty investment firms with more than $3.1 trillion in combined equity assets under management took part in the study, with an average portfolio allocation to non-North American equities of 31.5%.
North America's asset management community has been resurgent. Market prices and assets under management have recovered from post-crisis lows and more firms have entered the marketplace. In the U.S. and Canada, $516 billion of non-North American holdings are now held in the form of depositary receipts, a 45% jump since 2008. In addition, from 2012 to 2014 total equity value invested outside of North America grew by more than 30%.*
"Asset growth and greater focus on diversification has placed new strains on the management teams of non-U.S. companies as they try to meet the demands of North American investors," said Christopher M. Kearns, CEO of BNY Mellon's Depositary Receipts business. "To meet these demands, issuers worldwide need to refine their targeting and balance how they serve existing shareholders with the most effective ways to engage new investors. Providing sufficient corporate access is a crucial gateway."
Key findings of the survey include:
"There are more than 1,200 active asset management firms in the U.S and Canada investing globally that weren't on the radar 10 years ago," said Guy Gresham, head of the Global IR Advisory team in BNY Mellon's DR group. "This new research sheds light on the views of international equity managers of all sizes, identifying where they simply are not getting adequate access to international companies. Our goal is to help improve understanding and connectivity between issuers and investors that can benefit both sides."
The full report is available online. BNY Mellon acts as depositary for more than 2,700 American and global depositary receipt programs, acting in partnership with leading companies from 68 countries. BNY Mellon is committed to helping securities issuers access the world's rapidly evolving financial markets and delivers a comprehensive suite of depositary receipt services.
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of June 30, 2014, BNY Mellon had $28.5 trillion in assets under custody and/or administration, and $1.6 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK).