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Andrew Holt
REPORTER
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T Rowe Price commits to using
banks for corporate access
JUL 09, 2019 |
Asset manager says
in-depth meetings with company management are integral to its
investment process
US asset manager T Rowe Price has
dispelled reports that it is to bypass Wall Street banks on corporate
access.
The Wall Street Journal had
reported that T Rowe Price and a number of asset managers were
organizing private conferences as a way to bypass banks to gain access
to management of companies, indicating a possible new trend –
especially as Mifid II begins to take a tighter hold in the US.
The move would put at risk millions of
dollars in fees that banks make from introducing investors to top
executives.
Connecticut-based consultancy Greenwich
Associates estimates that corporate access was worth $900 mn to banks
last year – about 12 percent of their total equities revenues –
boosting trading revenue and helping to draw corporate clients into
closer business relationships.
But T Rowe Price put this idea to bed in
a statement, which reads: ‘Recent press reports have suggested that
big investment firms, including T Rowe Price, plan to discontinue the
long-standing practice of [using] Wall Street firms for access to
companies in which we invest. In fact, T Rowe Price continues to find
value in the access to corporate leaders that Wall Street has
facilitated over many years.
‘To best meet our investors’ needs and
better serve our clients, we are supplementing that practice by
joining with other major asset management firms to plan separate
corporate access events that will provide a unique and tailored
research experience for our company’s investors. As a fundamental
investment research firm, in-depth meetings with company management
teams continue to be integral to our investment process and to our
ability to make informed investment decisions on behalf of our
clients.’
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