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

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

Marco Becht, Julian Franks, Hannes Wagner

Series number :

Serial Number: 
751/2021

Date posted :

April 22 2021

Last revised :

April 22 2021
SSRN Share

Keywords

  • active investors • 
  • trading • 
  • institutional investors • 
  • Corporate governance • 
  • stewardship • 
  • active ownership • 
  • Shareholder voting • 
  • analysts • 
  • fund mana

We analyze the monitoring efforts of a large active asset manager that involve high-level private meetings with portfolio firms that are unobservable to outsiders.

Our analysis reveals the inner workings of the asset management organization based on detailed records of contacts with executives and board members of portfolio firms, internal analyst recommendations, voting decisions, and daily fund-level stock holdings. Private meetings generate pronounced trading patterns, with fund managers trading on and around meeting days and votes. Our results show that engagement with target firms generates insights and information advantages, increases trading and is associated with significant abnormal returns.

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Authors

Professor
Real name:
Marco Becht
Fellow, Research Member, Institutional Member, Board Member
Solvay Brussels School for Economics and Management, Université libre de Bruxelles