Roadshow guide to Boston

Boston is unique. With its deep historic roots, New England personality, regional dialect, great seafood and sports mania, time spent in Boston – ‘the hub’ – is always memorable.

With $2.1 tn in equity assets under management, Boston also ranks as the second-largest money center both in the US and globally, and is fairly evenly split between growth and value investors, according to Ipreo.   

Beyond sheer size, the eclectic nature of Boston’s investment community, which combines old money traditions and new economy savvy, is layered onto an historic city whose paved streets seem to follow narrow, crooked farm tracks.

As a result, Boston boasts one of the largest concentrations of long-only firms within walking distance of each other, making it a required stop on many roadshow calendars.

Rising number of conferences

Greg Parks, president of the Wall Street Calendar, a conference tracking firm, says that as the sell side has pushed management access over the past several years, he has seen a rise in the number of investor conferences as well. And it seems no city has benefited more from that phenomenon than Boston.

One theory as to why Boston’s conference count has been rising focuses on a 2006 change in New York’s income tax rules, which require non-residents to file returns if they spend more than 10 days in the Big Apple.

Whether that’s the reason or not, the trend seems to have taken on a life of its own. While New York still holds more investor conferences overall, according to the Wall Street Calendar the number of conferences held in Boston has risen by more than 30 percent since 2007, from 65 to 87 last year, while New York has seen a 17 percent decline over the same period, from 484 to 400.
 

Independent corporate access provider Rick Hanley, president and founder of Hanley Associates, describes Boston as ‘the most attractive city in the world for a company to market’. Hanley claims Boston still doesn’t get enough attention from IROs, who typically tack one day in Boston onto a two-day trip to New York.

‘They’ve got it backwards – especially when you consider the ratio of long-only funds to hedge funds, which makes New York much less attractive,’ he says.

If a management team could get meetings with the half-dozen largest equity funds, a Boston lineup would put them in front of more buying power in fewer meetings than any other metro area, Hanley observes.

Diverse audience

But size is not the city’s only attraction. Boston’s financial community is very diverse, notes Robert Meyers, global corporate access director at RBC Capital Markets.

He describes Boston as ‘one of the few global money centers with extensive product groups, analysts and portfolio managers who cover assets across market-cap ranges, sectors and regions.’



He also cites the growing number of hedge funds that have expanded there to take advantage of ‘the impressive track record of deal flow, non-deal roadshows, and industry events centered in Boston.’

Even with a traditionally conservative and guideline-driven investment approach among many mutual funds, Meyers says his firm has seen an increasing appetite among Boston’s larger investors to meet with US, European and Canadian companies that have global operations, mirroring an increasingly global investment orientation.

Nonetheless, he advises that patience may be necessary with some Boston money managers. ‘For those firms that are not current holders, it may take several meetings before a buy decision is reached,’ he explains.

Entrepreneurial spirit

James Buckley, managing partner at IR firm Sharon Merrill Associates, sees Boston’s broad-ranging investment community as a natural outgrowth of its own past successes.

In addition to star managers at marquee shops striking out on their own, the area’s rich university and research communities have spawned tech and medical/biotech start-ups.
 

That vibrant entrepreneurial culture has in turn attracted venture capital and private equity shops from elsewhere, creating arguably the most diverse financial community mosaic anywhere, Buckley argues.

No matter what your story, you can find an audience here, he adds. ‘It’s not like Boston’s a bad place to go if you’re a small cap,’ he observes.

Despite a growing number of hedge funds and momentum-driven investors, Boston retains its reputation as a long-only, buy-and-hold kind of town.

A 'must do', especially for young companies

It remains a ‘must do’ for IROs, and is especially attractive for young companies that have not yet been discovered: Boston is a market where they can get a hearing and find the first large investors that will stay with them for a long time.

On a nice day, Boston is a very walkable city, so with a little planning and luck, you can pack a lot of meetings into a day. But New England weather is notoriously unpredictable and can be nasty, so have a Plan B, just in case.

There are two main areas of the city to navigate. The core financial district downtown extends from State Street near historic Faneuil Hall through Post Office Square and down to South Station and the Federal Reserve to the waterfront.

Within this warren of streets, alleys, avenues and waterfront boulevards, you can easily build a day of meetings with some of the biggest companies (Fidelity, Wellington, Putnam) and a growing collection of newer, smaller shops, hedge funds and advisers.

The Back Bay was so named because surrounding hills were cut down to fill in the marshes behind Beacon Hill, creating a neighborhood where the streets could run in a more easily navigable grid pattern extending along Boylston Street.

Here you’ll find a broader mix, including the Boston Common and Boston Gardens, retail complexes, trendy Newbury Street, office towers and Symphony Hall, as well as investment giants like MFS and Bain Capital.