The Benefits of Access: Evidence from Private Meetings with Portfolio Firms

64 Pages Posted: 21 Apr 2021 Last revised: 3 May 2023

See all articles by Marco Becht

Marco Becht

Solvay Brussels School of Economics and Management (ULB); European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)

Julian R. Franks

London Business School - Institute of Finance and Accounting; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Hannes F. Wagner

Bocconi University - Department of Finance; Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research; European Corporate Governance Institute (ECGI)

Multiple version iconThere are 2 versions of this paper

Date Written: March 30, 2023

Abstract

We analyze over 4,700 private meetings between a large active asset manager and portfolio firms, unobservable to outsiders. These meetings are conducted by both fund managers and governance specialists; both generate insights and information advantages that influence trading decisions of fund managers. Meetings contain soft rather than hard information, and fund managers trade on and around meeting dates, generating excess returns. Trading is more pronounced for i) high level meetings, (ii) meetings with very positive or negative tone, (iii) meetings rated as unusually good or bad, and (iv) meetings changing internal recommendations to buy, hold or sell. Overall, meetings generate profitable trading decisions.

Keywords: active investors, trading, institutional investors, corporate governance, stewardship, active ownership, shareholder voting, analysts, fund managers

JEL Classification: G11, G14, G23, G34

Suggested Citation

Becht, Marco and Franks, Julian R. and Wagner, Hannes F., The Benefits of Access: Evidence from Private Meetings with Portfolio Firms (March 30, 2023). European Corporate Governance Institute – Finance Working Paper No. 751/2021, Available at SSRN: https://ssrn.com/abstract=3813948 or http://dx.doi.org/10.2139/ssrn.3813948

Marco Becht

Solvay Brussels School of Economics and Management (ULB) ( email )

42 Avenue F. D. Roosevelt
1050
Brussels, 1050
Belgium
+32 2 6504466 (Phone)

HOME PAGE: http://www.solvay.edu/profile/marcobecht

European Corporate Governance Institute (ECGI) ( email )

Palace of the Academies
Rue Ducale 1 Hertogstraat
Brussels, 1000
Belgium

HOME PAGE: http://www.ecgi.global/users/marco-becht

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Julian R. Franks

London Business School - Institute of Finance and Accounting ( email )

Institute of Finance and Accounting
Sussex Place - Regent's Park
London NW1 4SA
United Kingdom
+44 20 7262 5050 x3449 (Phone)
+44 20 7724 3317 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: https://ecgi.global/

Hannes F. Wagner (Contact Author)

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

HOME PAGE: http://mypage.unibocconi.eu/hanneswagner

Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research ( email )

Via Roentgen 1
Milan, 20136
Italy

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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