Report: Lack of Corporate Access Limiting Opportunities for Non-North American Companies

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 study released by BNY Mellon.

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."

The survey found that 43% of investors rate their current level of corporate access to non-North American companies as Average or Poor, driven by dissatisfied investors in secondary investment cities.

More than half or 60% of respondents state that lack of corporate access eliminates a non-North American company from their investment universe.

Regardless of satisfaction with their current access, over three-quarters of respondents say they face limitations in obtaining access to non-North American firms, especially for investors based outside of primary investment cities.

The study also reveals that 26% of investors have reduced the number of meetings arranged by the brokerage community. For those with greater than $50 billion in EAUM, half of their meetings with non-North American companies are organized independent of the sell side.

Before initiating a position in a non-U.S. company, 72% of responding investors require at least one meeting with senior management to establish confidence in the team and better understand the firm's story and strategy.

Once invested, respondents say they require one meeting per year (though they prefer two) to keep up-to-date on operations.

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