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 :

May 02 2023
SSRN Share

Keywords

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

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.

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Authors

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