Will Corporate Access Ever Be The Same?
In this quarterly global theme, Institutional Investor Research Editor Amy Whyte explores the future of corporate access.
Will Corporate Access Ever Be The Same?
Article By Amy Whyte, Research Editor (Institutional Investor)
In-person conferences and meetings will eventually return — but corporate access leaders believe some changes wrought by the pandemic will be permanent.
The sell-side is not immune to Covid-19.
Banks, like all companies, have had to transition to remote work and virtual meetings — a change that has impacted research, sales, and trading teams alike. But if there’s one area of the sell-side business that has been completely disrupted by the global pandemic, it is corporate access.
Corporate access — connecting investors with corporate executives — was built around large, in-person events like investor conferences and company roadshows. Even smaller meetings between investors and executives often occurred face-to-face.
The virus ended all of that.
“The way we engage with institutional investors has completely changed,” said Craig Streem, vice president for investor relations at credit card company Discover. “In-person meetings are no longer happening. They’ve been completely replaced by virtual roadshows.”
As governments in every major market moved to lock down their citizens, corporate access providers were quick to adapt to the new world order, replacing in-person conferences with webcasts and virtual roundtables.
“I’ve had to become very proficient in Microsoft Teams,” joked Edward Vallejo, vice president at American Water. Vallejo, who heads up investor relations for the utility company, said his firm had cancelled all business travel for the remainder of 2020 — and they’re not alone. IR and sell-side professionals interviewed by Institutional Investor have said that they don’t expect corporate access to happen in-person until at least next year, if not later.
“It’ll be after there’s a vaccine — after all of us do not need to wear a mask when talking to each other,” Vallejo said.
Even when work travel resumes and banks start planning physical conferences again, corporate access professionals say the business will never be the same.
“Some of these changes will be here to stay,” said Joyce Chang, managing director at JPMorgan Chase & Co.
As the bank’s chair of research, Chang has observed how clients have responded to the virtual conferences that JPMorgan has sponsored over the last few months. She says attendance has been high — no doubt thanks to the ease of logging on from home rather than traveling for hours by plane to get there.
“We hosted our annual IMF conference virtually this year,” she said. “This format attracted over 1,700 investors, whereas the in-person conference typically only accommodated around 800 attendees.”
Not only are more investors showing up to online events, many are also taking advantage of the ability to watch recordings of webcasts after they have ended.
“People want the replays and the podcasts,” Chang said. “You have technology shifting a lot of the ways in which you can deliver resources and make it accessible so people can do it on their own schedule.”
Still, there are some trade-offs. Chang noted that it’s harder to enforce Chatham House Rule on webinars that anyone can join, which means speakers may not talk as candidly as they would live and off the record. And the networking aspects of conferences — sometimes seen as more valuable than the actual content — can be almost nonexistent at virtual events.
Plus, as IR professionals like Streem and Vallejo point out, it can be more difficult to gauge what investors are thinking without being able to observe body language and make proper eye contact.
“There are some aspects of the virtual relationship that may make it easier — maybe we all save money on travel and entertainment expenses,” Streem said. “But I have always believed the optimal way of engaging with prospective and current investors is on an in-person basis. A big part of establishing credibility, trust, and confidence is that face-to-face relationship. It’s easier to manage it virtually, but it’s suboptimal.”
Others, however, think some trade-offs are worth it. At American Water, for example, Vallejo expects to continue conducting certain meetings and roadshows over web conference instead of traveling as much as he used to.
“Post-Covid, when we’re back in the office and don’t have internet issues, it will be very easy to tell the team, ‘Let’s go to the boardroom for the morning and talk to investors,’” Vallejo said. “I can see that happening a lot.”
“We cannot do 100 percent virtual,” he added. “But I can skip some in-person meetings and save some money and be more efficient with my time.”