When it comes to getting Asian investors and corporate leaders in the same room, both parties agree: Morgan Stanley is the best in the business.
The firm once again ranked best overall among Institutional Investor’s latest ranking of Asia’s Top Corporate Access Providers, this year earning praise from both investors and corporations themselves. The annual list — which Morgan Stanley has topped all five years — was redesigned this year to take into account both sides of the corporate access divide, with separate leaderboards ranking the best firms from both the buy-side and corporate perspective.
After tying for first last year with Bank of America Merrill Lynch and Credit Suisse, Morgan Stanley was voted the singular best by both groups, with the firm earning recognition in 24 sectors covered by the buy-side survey, as well as finishing first in the corporate ranking. Credit Suisse slid to third in the buy-side rankings, while voted second by corporate participants. Bank of America Merrill Lynch, meanwhile, rated fifth among investors and sixth among corporates.
Both investors and corporations rated corporate access providers on their ability to coordinate meetings with executives, arrange site visits and factory tours, host investor conferences, and organize nondeal road shows — all particularly essential functions in Asian emerging markets, where investors typically face a “less efficient flow of information,” explains Michael Lau, chief operating officer of brokerage and investment firm CLSA’s equity advisory division.
Lau, whose firm was voted the third best corporate access provider by corporate respondents, cited information asymmetries arising from language barriers and the overall diversity of Asian countries and markets among the key reasons why good corporate access providers were needed in the region.
“The professionalization of the investor relation function amongst corporates is still developing,” he says. “Whereas developed markets typically have dedicated investor relations teams, many Asian emerging market corporates are reliant on their C-suite or board members to meet with investors.”
And without the support of a dedicated investor relations team, actually meeting with management becomes that much more difficult, he adds. Furthermore, Lau says infrastructure and logistics remain a challenge when accessing management in emerging markets — meaning investors need “on-the-ground know-how” to ensure efficient corporate access arrangements.
“Access to management has long been and continues to be a key input among our clients’ investment processes,” he says. “Our long history and dedication to the region by having research, sales, corporate access, roadshow, and execution teams located on the ground in all the major Asian markets... has enabled us to build strong relationships, trust with both investors and corporates, and efficient logistical capabilities.”
CLSA was rated by corporates as the second-best firm at arranging one-on-one or small group meetings between investors and executives, beating out overall corporate access leader Morgan Stanley, which placed sixth in that category.
Both firms rated highly among corporate respondents for their investor conferences, with Morgan Stanley ranking first and CLSA coming in third. Credit Suisse, which hosted its 20th annual Asia Investment Conference last March, placed second. Morgan Stanley, for its part, hosted its 15th annual Asia Pacific Summit in Singapore last November.
Corporations also chose Deutsche Bank as the best at facilitating site visits and factory tours, and picked HSBC as the best host of nondeal road shows.
Kai Kaufmann, Asia Pacific head of corporate access at Deutsche Bank, says many fund managers would “simply not proceed with their listed equity investment unless they met the issuer’s top management team,” as they need several key questions answered before committing to an investment opportunity.
“Does the way the CEO and CFO think about their company’s market environment, strategy, and financial outlook support my views on the company’s equity story and the valuation of its shares? Do I trust and like this management team? Do they have the integrity, knowledge, and leadership skills required to deliver on their communicated operational and financial targets?” he asks. “The only way to get satisfactory answers to these questions is to meet the top management in person.”
From the buy-side perspective, Morgan Stanley, UBS, and Credit Suisse were named the top three corporate access providers in Asia, followed by Citi and Bank of America Merrill Lynch.
Morgan Stanley earned recognition in 24 of the 29 sectors covered by the survey, including eleven first place finishes in categories including banks, basic materials, industrials, oil and gas, and information technology. The firm also ranked highest for providing access to corporate executives in China, Hong Kong, and India.
UBS, meanwhile, ranked in 21 sectors and placed first in five. Specifically, the firm earned praise within the consumer/discretionary and consumer/staples industries, as well as telecommunications and transportation. UBS was also voted the best corporate access provider in Australia and New Zealand.
Credit Suisse similarly earned top scores in five sectors on the buy-side survey, with recognition in 15 categories overall. The firm came first in the gaming and lodging, insurance, and technology hardware industries, and was also honored for its corporate access provisions in Indonesia and Malaysia.
