How companies select a broker

May 20, 2011
<p>IR magazine reveals the findings of a new corporate access survey by Ipreo</p>

To help you benchmark your corporate access program against that of your peers, IR magazine has been given an exclusive look at a corporate access survey of IR professionals undertaken by market intelligence firm Ipreo.

The survey examines the kind of outreach IR practitioners are undertaking and also which factors determine the corporate access companies they travel with. This is the second corporate access survey Ipreo has conducted and, for this latest study, it has expanded the number of companies interviewed worldwide to more than 400. Respondents came from a roughly equal proportion of large, mid and small-cap companies.

Determining factors for picking your broker

IR departments use a wide range of criteria to determine which sell-side firms to go on the road with, according to the results of Ipreo’s survey. While – unsurprisingly – the quality of buy-side meetings is the only factor that is extremely important to a large proportion of issuers, more than 40 percent of respondents say the quality of investor conferences, research and meeting logistics and market intelligence/meeting feedback are all either ‘very important’ or ‘extremely important’.

Number of sell-side banks used in last 12 months

The bigger the company, the more roadshow partners it will use during the year. Almost 30 percent of large-cap companies used more than 10 sell-side banks during the last year, finds Ipreo. Hardly any small-cap companies – defined as those with a market cap under $2 bn – use that many brokers.

Investor meetings

Research coverage is a key factor for companies when deciding who to pick to organize investor meetings. A fifth of respondents take a firm line and will go on the road only with sell-side banks that provide research on their company. In addition, just over half say they will never use banks that don’t provide coverage. Interestingly, a large proportion of respondents say they steer clear of IR service providers and corporate access service firms for organizing investor meetings.

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