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Corporate access plays a crucial role in the field of investor relations. The Financial Conduct Authority (FCA) defines corporate access as ‘a service of arranging or bringing about contact between an investment manager and issuer or potential issuer.’  The primary purpose of broker and investment bank corporate access teams is to provide their investor clients with access to company management and help to develop their relationship with the company.

The processes and interactions of corporate access were significantly impacted by the implementation of Markets in Financial Instruments Directive II (MiFID II) in 2018. MiFID II regulations were introduced with the aim of accentuating transparency, accountability and value for investors.

Who benefits from corporate access?

The concept of corporate access was originally developed as a service to investors. In practice, corporate access equally benefits companies seeking investment: each wants access to the other. Corporate access teams can help companies by identifying and targeting suitable institutional investors, advising on investors’ priorities, approach and style, arranging meetings with compatible investors, and providing feedback following meetings. This service can be highly instrumental in unlocking vital capital for companies.

Every type of company can potentially benefit from corporate access during their corporate journey. Public companies can establish and develop relationships with investors who become long-term, committed shareholders. Companies planning for growth and development often seek investors who align with their strategic objectives. Pre-IPO companies can generate awareness and interest by connecting with institutional investors prior to their Initial Public Offering (IPO) and developing relationships that can help their transition to public companies. Engaging with investors can benefit companies preparing for significant change, such as a merger or acquisition (M&A) or restructuring.

Corporate access can play a pivotal role in the growth and success of startups in the early funding stages. Startups will hope to engage institutional investors or venture capitalists with a value proposition and compelling narrative that resonates with investors’ strategic interests. This funding is crucial to growing their business, developing and marketing their products and services, hiring talent and expertise, and developing a competitive edge. Following the seed funding stage, many companies continue to seek investment and undergo a series of funding rounds, each one adding value to the business prior to preparing for IPO.

The tools of corporate access

Communication is the essence of corporate access. There are a range of events and activities that facilitate communication between company management teams and investors. These include conferences, seminars, one-to-one meetings, industry events and roadshows. These events are usually organised by corporate access teams who endeavour to match the company’s industry, growth stage and strategy with compatible investors. Corporate access teams may also help a company to prepare presentations designed to provide investment decision-makers with a detailed understanding of the company’s financial performance, competitive advantages, market positioning, and growth strategies.

Roadshows provide an excellent opportunity for companies to enhance their visibility and impress and attract investors. Many investors will not invest in a company without first meeting its senior management. Non-deal roadshows are a particularly useful investor relations (IR) instrument when a company isn’t seeking to sell securities. It is an opportunity for a company to discuss topics of interest and communicate its investment proposition to potential investors. These conversations can influence the valuation of a company. Recent research points to non-deal roadshows remaining the most effective means for companies to meet investors post-Covid.

The Covid-19 pandemic had a profound impact on corporate access. It accelerated the digitisation of corporate access as face-to-face meetings were replaced by virtual meetings and online platforms played an increasingly crucial role in helping companies make information available to investors. Below we will look at how these developments established trends that continue to influence corporate access.

Trends in corporate access

Three prevailing trends in corporate access are a reduction in virtual meetings, increased digitisation, and the increasing importance of environmental, social and governance (ESG) issues to investors.

Virtual meetings: post-pandemic, there has been a re-emergence of a desire for in-person meetings instead of meeting virtually, largely because of the greater networking opportunities and quality of personal interactions made possible by face-to-face meetings. However, virtual meeting technology will continue to be used because investors are comfortable using remote access communication tools such as webcasts and video conferences, and they have become more selective about where they spend their time. There is a growing preference to physically attend larger, rather than smaller, events. Virtual roadshows will provide a convenient, cost- and time-efficient method of reaching and engaging with audiences anywhere in the world.

An advantage of virtual technology is the rich, real-time data analytics it provides. Organisers can see what type of content event attendees and viewers are looking at and downloading. Virtual and physical roadshows and conferences each provide unique benefits, and it will often depend on the nature of an event and the preferences of the parties involved as to which is most suitable at any given time.

Other online technology has emerged that augments corporate access by fostering relationships between companies and investors. A prime example is a virtual data room. The adaptability of data rooms makes it a highly useful and efficient tool for companies at every stage of their corporate journey, from startup to IPO and beyond. An online data room is a centralised repository where companies can securely store, organise, manage, and share confidential information with investors. A granular permission system gives the company full control over who can view, download, or edit documents.

Time is often a critical factor in investment decisions, so making information available to investors whenever they need it, from wherever they are, can be a key success factor in securing funds. Powerful navigation and search tools make the process of finding investor decks and other important financial, operational, legal and commercial information quick and easy for investors. Advanced tracking features provide valuable insights into how investors interact with documents enabling the company to gauge the level of interest and respond accordingly. A Q&A function facilitates deeper engagement with interested investors. A data room has become a fundamental tool to help companies successfully engage with investors at every funding round.

ESG management has become a critical element in investors’ decision-making. Investors monitor and analyse companies’ performance to determine their ability to manage the opportunities and risks that ESG issues present in terms of their capability to create long-term value. Companies seeking to float on AIM  or the UK’s Main Market must comply with growing legislation and regulatory requirements that govern their ESG actions and activities. Investors are unlikely to back companies that do not take these responsibilities seriously.  It is therefore vital that companies effectively communicate their intent and commitment by demonstrating to investors a strong ESG proposition and a strategic approach to creating value. Companies are increasingly using a data room to share this information with investors because of its highly confidential nature.

Perivan has vast experience in working with companies at every stage of their corporate journey, from early stage funding, to IPO and exit. If you would like to see how Perivan’s data room, Engage, can help you to manage your corporate access and investor communications, please get in touch with the Perivan team to arrange a demo and answer your questions.