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Global Institutional 
Investors Insight Report 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
A top-three group globally, the global Financial Practice at MSLGROUP offers specialized, best-in- 
class strategic communications advisory and other services to more than 500 corporate and 
institutional clients across major financial and business markets on three continents around the 
world. The group consists of CNC in 8 markets; Kekst and Company in New York; JKL in the Nordic 
region, Publicis Consultants in France as well as dedicated Financial hubs in Italy, Poland and Asia. 
Visit: www.mslgroup.com 
JKL is a leading Nordic consultancy specialising in strategic communication and stakeholder 
engagement. Clients turn to JKL for support in building their reputation, understanding 
perceptions or issues across multiple stakeholder groups, and devising and implementing efficient 
communication strategies. With more than 25 years’ experience in strategic communication, JKL 
offers its clients a profound understanding of the Nordic capital markets, business environment 
and media. JKL has a hub office in Stockholm and consultants in Norway, Denmark, Finland and 
Brussels. Visit: www.jklgroup.com 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 
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MSLGROUP.COM 
The Financial Practice at MSLGROUP 
CNC is an experienced international strategic consultancy which helps clients solve business 
problems through communications. When communication matters, companies, institutions 
and individuals use CNC’s unrivalled expertise to advise on communications affecting decisions, 
valuation, change and reputation. CNC works in corporate and financial communications, 
public affairs, crisis support and change management, underpinned by a strong understanding of 
the rapidly evolving digital media environment. In November, CNC and Capital MSL announced that 
the two operations intend to merge in January 2015. Visit: www.cnc-communications.com 
Kekst and Company has long been the leading corporate, financial and strategic communications 
advisor to senior management teams and boards of directors on their most serious business 
and communications issues. Headquartered in New York City, Kekst’s professionals are highly 
experienced and possess a deep understanding of the business world, the capital markets and 
the media. Most importantly, they excel at helping clients articulate and effectively communicate 
key messages to their most important stakeholder groups. The company’s engagements typically 
involve: investor relations, crisis communications, mergers & acquisitions, bankruptcies and 
restructurings, litigation support, and corporate governance issues. Additionally, the firm has long 
been a leader in advising private equity firms and hedge funds, representing nearly 50 entities 
today. Visit: www.kekst.com 
A top-five player in France’s M&A league tables, Publicis Consultants’ Financial team also 
regularly advises investment banks, private equity firms, asset managers and listed companies on 
their communications strategies. The company’s objective is to develop and protect its clients’ 
financial image for each of their key targets: investors, journalists, influencers, employees. Publicis 
Consultants supports clients around a number of delicate communications challenges, including: 
crisis communications, annual results and Investor Day presentations, financial advertising 
campaigns, hostile take-over bids, IPO projects, Say on Pay for Annual Shareholders meetings, as 
well as rumors on Twitter and social networks more generally. Visit: www.publicis-consultants.fr
1 
About this research 
MSLGROUP’s Global Institutional Investors Insight Report is a landmark piece of research. The survey is one of the first of its kind to 
examine the tangible and intangible factors that influence the decision-making process of institutional investors and sell-side analysts 
around the world. The report also sheds new light on this group’s motivations and offers perspective on how investor behaviour may 
evolve in the near future. 
Among the first to cover a global investor base… 
Whereas past studies of market participants have focused almost exclusively on the U.S. 
and European markets, MSLGROUP’s is among the first to include the Asian investment 
perspective. The findings are compiled from a total of 500 direct telephone interviews 
with institutional investors and sell-side analysts in Europe (France, UK, Germany, 
Switzerland, Luxembourg), North America (the U.S. and Canada), and Asia (Singapore, 
China, Hong Kong, Australia and Japan). The study demonstrates that while these 
financial professionals have many similarities in approach and perspectives, important 
nuances do exist among these regions. 
Decision-making and corporate influence… 
The survey, conducted during August and September 2014, provides detailed insights 
and spotlights how investment decision-making and future investor behaviour might 
change. The research shows how both financial and non-financial factors play a role in 
decision making and highlights the extent to which the information required to make 
these decisions can be influenced by corporate disclosures and investor relations 
activities. 
Continued growth in activism… 
In the research, we have also taken one of the first global looks at investor views on 
shareholder activism, seeking to understand how far investors around the world believe 
that this approach will develop beyond the U.S. and its early stages in the UK. We also 
examine global investor views of the benefits that such engagement may, or may not, 
bring. 
A more complete picture… 
Throughout this report, we have highlighted notable global trends in investor opinion, 
balanced with regional differences (where available). What emerges is a more complete 
picture of the global investor base, which illustrates why this important corporate 
audience should not be regarded as an homogenous group. 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 
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Executive summary 
Global capital markets overtook bank 
lending as the leading source of long-term 
finance in 20091 as the fall-out from 
the 2008 financial crisis lowered risk 
appetite within banks considerably. The 
effective functioning of these markets 
is more important to society’s economic 
progress than ever before. 
But the views of institutional investors, 
those who channel the largest assets, are 
still rarely captured on a global basis. As 
a group, they are hard-to-reach. But, in 
this inaugural study, we have successfully 
tracked investor behaviour, attitudes and 
beliefs across the three largest regions 
(by value): Asia, Europe and the United 
States. Estimates place institutional 
investor assets under management in 
these three regions at $58 trillion. 
The insights we present, therefore, should 
make for instructive reading. Our findings 
will inform the investor engagement 
strategies of listed companies around 
the world, but might also be considered 
as a useful input to corporate decision-making, 
vis-à-vis both primary and 
secondary capital markets. Those 
who get the balance of their market 
engagement right can expect to maintain 
a ready market for future financing, lower 
their cost of capital as well as cultivate 
a supportive investor base for corporate 
actions. 
The good news is that two thirds of 
investors globally believe that investor 
communications have improved overall. 
But, this is no time to rest on our laurels. 
Listed companies are navigating ever-more 
global capital markets; one where 
the competition for capital has never 
been more intense. 
So what are the key take-aways from the 
study? The regional variance of investor 
behaviour and attitudes is highly notable. 
From region-to-region, our findings 
show a stark difference in the number of 
stocks investors hold in their portfolio. 
Furthermore, average holding periods 
can also vary significantly. These 
distinctions can obviously translate into a 
very different set of investor needs. 
On average, European investors cover 
a universe twice the size of their U.S. 
and Asian counterparts. As a result, 
European investors seem to place 
a greater value on the quality of a 
company’s own communications. This 
is cited as a very important driver of 
corporate valuation. European investors 
are also among the keenest to see a 
clear alignment of interests; placing 
great store in the linkage between 
director compensation and company 
performance. 
U.S. investors might be viewed, according 
to our findings, as the most long-term 
group. A higher proportion of their 
portfolio is held constant for five years 
than in any other region surveyed. This, 
in a region best known for its investor 
intervention. One might presume that 
the loyalty of U.S. investors is, therefore, 
heavily associated with long-term value 
creation. Should this goal be threatened, 
they are more pre-disposed to act, but 
even in the U.S. a majority of our sample 
question the long-term benefit of high-profile 
shareholder activism, as a general 
rule. 
by Roland Klein 
Global leader of MSLGROUP’s 
Financial practice, and CNC Partner. 
1 Lena Komileva for Financial Times, 16 September, 2009
3 
Asia represents a clear contrast to the 
mature western markets in our study. 
While portfolios are currently more 
concentrated in Asia than in any other 
region, its fast-paced markets mean 
that investors have developed a shorter 
time horizon. Here, investors reported 
holding an average of just 46% of their 
portfolio for more than a year; over a 
five year period this fell on average to 
as little as 17% of their portfolio - half 
that of other regions. This means that 
stocks held for more than a year by 
investors in Asia can be the exception, 
rather than the rule. What’s more, two 
in three investors in the region readily 
expect to be managing more stocks in 
the next three years. These factors will 
pose even more challenges for investor 
relations professionals and may alter the 
aftermarket dynamic of a rising number of 
Asia-led public offerings. 
For as long as I can remember the debate 
over the contribution intangibles make 
to market valuation has rumbled on. 
The processes by which an estimate of a 
business’ economic value is arrived at are 
generally accepted, but the precise effect 
of so-called non-financial factors is still 
unclear. So we asked our sample for their 
views. 
What is clear is that, not unreasonably, 
investors place greatest store in knowing 
where a company is going and that their 
expectations will be delivered upon. 
Worldwide, our investor sample want to 
understand the corporate strategy, to 
feel confident in the quality of executive 
management and to be sure that the 
company has been open and honest in 
its disclosures. In my experience, it is not 
the bumps in the road of any company’s 
life which frustrate investors, but those 
bumps which were neither foreseen, nor 
disclosed, nor discussed. 
Pre-crisis, environmental, social and 
governance (ESG) factors were a much 
discussed topic, particularly in Europe. 
The turbulence of financial markets and 
extremes of the last seven years may 
well have focused attention on the short 
or medium rather than long-term, but 
ESG is cited by a significant number 
of investors in each region as being a 
‘somewhat important’ determinant of 
valuation. It might surprise some of our 
readers to learn that the country with the 
largest proportion of investors citing ESG 
behaviour as very important at present 
was China. 
And so, the age-old tension between 
long-term performance and short-term 
gain is ever present. 
Capital markets, by their very nature, 
are designed to be long-term sources of 
finance. When a company seeks to access 
primary capital markets, the purpose is 
typically to invest and thereby, ultimately, 
to increase profits. It can take many 
months or years before the investment 
pays back its cost. 
We would do well to remember that 
investors in any region need a clear 
roadmap for company development, both 
when they invest and while they remain 
invested. All good stories should have a 
solid beginning, a middle and an end. 
As capital markets and 
shareholder bases have 
become more globalized, 
companies are faced with an 
issue of regionalism when 
it comes to interpreting 
their corporate messaging, 
and while this may sound 
somewhat paradoxical - 
globalism leading to more 
regionalism - there is a clear 
opportunity for companies 
to strengthen and increase 
their shareholder bases if they 
understand these important 
regional nuances and adjust 
course accordingly. As a 
truly global communications 
company, rich in local 
expertise, and with a proven 
track record in corporate, 
strategic and financial 
communications, MSLGROUP 
and its agencies help clients 
understand such nuances, 
and navigate complex 
environments 
Roland Klein 
Global leader of the Financial 
practice, and CNC Partner. 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
SECTION I 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 
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Critical factors driving 
investor decision making
5 
A logical approach to understanding the findings is to analyse 
the data in two ways: First, what are the factors that investors 
look for when making an investment decision? Second, what 
can companies do to positively influence investor perception? 
Fact plus instinct, financial plus non-financial factors... 
There are multiple factors that impact 
how institutional investors make 
investment decisions about which 
companies to invest in, which companies 
to continue to hold and which companies 
to liquidate from a portfolio. In this study, 
we have drawn a distinction between 
financial and non-financial factors 
and then discuss what a company can 
do to improve its perception among 
these market participants. We have 
also analysed the influence of different 
sources of information used by financial 
professionals around the globe as part 
of their research into companies and 
industry sectors. 
What is clear is that no matter where in 
the world an investor might be located, 
the decision whether to invest or not is 
based upon a combination of both fact 
and instinct; and both financial and non-financial 
factors. 
A logical approach to understanding the 
findings is to analyse the data in two ways: 
First, what are the factors that investors 
look for when making an investment 
decision? Second, what can companies 
do to positively influence investor 
perception? 
There are a number of common top-line 
points in this section, with some 
striking differences among the different 
geographic regions and depending upon 
whether one is a buy-side investor or sell-side 
analyst. 
FIGURE 1 
Investors: Which of the following factors have become more or less important to 
understanding a company’s investment story over the past few years? 
65% 10% 21% 4% 
58% 15% 23% 4% 
54% 20% 21% 5% 
51% 20% 26% 3% 
45% 23% 23% 9% 
39% 36% 20% 5% 
39% 31% 25% 5% 
35% 35% 25% 5% 
33% 37% 26% 4% 
50% 100% 
A good track record on 
meeting earnings expectations 
A clearly articulated equity story 
A clear link between 
Director's remuneration and 
company performance 
A dedicated and informed 
investor relations function 
Management one-on-ones 
A relevant, timely and supportive 
digital or social media footprint 
Management visibility at 
industry sell-side conferences 
Supportive coverage 
in the financial media 
Sufficient sell-side 
research coverage 
More Important Less Important Same Don't Know 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
The factors that have become more important… 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 
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MSLGROUP.COM 
Across the three geographic regions, four 
factors emerge as key elements in helping 
buy-side investors more fully understand 
a company’s investment story: 
√ A good track record in meeting 
earnings expectations (65%) 
√ A clearly articulated equity story (58%) 
√ A clear link between a Director’s 
remuneration and company 
performance (54%) 
√ A dedicated and informed investor 
relations department (51%) 
When asked to assess the importance 
of specific factors to understanding a 
company’s equity story, there are three 
notable areas where the response of “less 
relevant” matches or even exceeds that 
given by the sample for “more relevant”. 
One of these areas, “sufficient sell-side 
research” (37% less relevant versus 
33% more relevant), is illustrative of 
the increasing importance placed upon 
internally-generated, buy-side research (a 
subject that we cover later in this report). 
In contrast, global sell-side respondents 
in the survey hold a different view as 
to what has become more important in 
recent years. Several elements scored 
a majority vote among this audience, 
including sell-side research and 
attendance at sell-side conferences: 
√ A good track record in meeting 
earnings expectations (79%) 
√ A clearly articulated equity story (72%) 
√ A dedicated and informed investor 
relations department (67%) 
√ Management one-on-ones (57%) 
√ Sufficient sell-side coverage (57%) 
√ Management visibility at industry sell-side 
conferences (55%) 
√ A clear link between a Director’s 
remuneration and company 
performance (52%)
7 
While there are clear takeaways as to the critical factors that 
are driving the investment decision-making process among 
financial professionals on a global basis, there are also subtle 
differences in the importance that U.S., European and Asian 
investors place on various elements. 
Significant regional variations… 
While there are clear takeaways as 
to the critical factors that are driving 
investment decision-making among 
financial professionals on a global basis, 
there are also subtle differences in the 
importance that U.S., European and Asian 
investors place on various elements. 
Communications professionals and CFOs 
would be well served to understand 
these nuances when evaluating their 
shareholder bases and planning their 
investor relations activities. 
For the United States, it was notable 
that between one quarter and one 
third of the sample said that there had 
been no change in importance for any 
of the factors, with the exception of 
digital footprint. Only when discussing 
a company’s track record on earnings 
(54%) and the importance of a clearly 
articulated equity story (54%) did a 
majority of the respondents identify 
that these factors had become more 
important to their investment decisions. 
FIGURE 2 
Investors: To what extent has a good track record on meeting earnings expectations become more or less important to fully understand a 
company’s investment story? 
U.S. Europe Asia 
54% 10% 28% 8% 70% 7% 21% 2% 77% 13% 10% 0% 
More Important Less Important Same Don't Know 
80% 
40% 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
While the overall European sample noted that a clearly 
articulated equity story had become more important to 
their decisions (57%), which was on a par with the U.S., the 
individual country responses show that German institutions 
take this factor even more seriously (79%). 
FIGURE 3 
Investors: To what extent has a clearly articulated equity story become more important to fully understanding a company’s investment 
story in the last few years? 
U.S. Europe Asia 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 
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MSLGROUP.COM 
More Important Less Important Same Don't Know 
70% 
35% 
54% 11% 27% 8% 56% 13% 26% 5% 66% 24% 9% 1% 
Europe occupied a middle ground on 
this issue with some striking differences 
in opinion among the various countries. 
Compared to the U.S., in Europe there 
is significantly more attention being 
paid to the link between a Director’s 
remuneration and performance (62% 
compared to 42% in U.S.), and to the 
earnings track record (70% compared to 
54% in U.S.). While the overall European 
sample noted that a clearly articulated 
equity story had become more important 
to their decisions (57%), which was 
on a par with the U.S., the individual 
country responses show that German 
institutions take this factor even more 
seriously (79%). A significant percentage 
of German and Swiss investors (38% 
and 49% respectively) were also among 
those who viewed supportive financial 
media coverage as being more important. 
The UK differed significantly from the 
European whole on just one factor; with 
63% of the UK sample citing one-on-ones 
with company management as more 
important to their investment decisions 
(versus Europe overall at 44%). 
The results from Asia likewise present a 
meaningfully different picture, consistent 
with a developing institutional investment 
sector in this high-growth region. In 
Asia, the percentage responding that the 
surveyed factors have become “more 
important” to investment decision-making 
is greater than the global average 
for every element. In many instances 
this difference runs into the double-digits. 
The most impressive variances 
relate to the importance of sufficient 
sell-side research (62% compared to 
33% globally), management visibility at 
sell-side events (56% vs. 39% globally), 
a dedicated IR function (67% vs. 51% 
globally), management one-to-ones 
(61% vs. 45% globally), as well as the 
digital footprint (54% vs. 39% globally).
9 
Overall, buy-side participants place much more importance 
on extra-financials, with 95% of participants stating that a 
company’s corporate strategy and the quality of its executive 
management are either very important or somewhat 
important to driving a company’s valuation. 
The core drivers of corporate valuation… 
Non-financial factors, or what are 
commonly referred to as “extra-financials,” 
have become more prominent 
in the investment landscape in recent 
years as financial markets, corporations 
and intermediaries have become more 
sophisticated in assessing intangible 
factors that may affect a company’s future 
profitability, but which are not presented 
in the financial statements. To uncover 
insights, respondents were asked to rate 
the importance of extra-financial factors 
in terms of driving a company’s valuation 
today. 
Overall, buy-side participants place much 
importance on extra-financials, with 95% 
of participants stating that a company’s 
corporate strategy and the quality of 
its executive management are either 
very or somewhat important to driving 
a company’s valuation. Notably, 79% 
indicated that a company’s corporate 
strategy is very important, and 70% 
echoed the same sentiment for the 
quality of the executive management 
team. The transparency of a company’s 
investor disclosures is viewed as either 
very or somewhat important by 91% of 
buy-siders, with 63% citing this factor as 
very important. 
The next three extra-financial factors to 
be rated as very or somewhat important 
in driving a company’s valuation include 
the quality of the company’s investor 
communications (86%), a company’s 
market share (83%) and environmental, 
social and governance (ESG) behaviour 
(72%). 
The wider media image of a company 
was noted as very or somewhat important 
by 66% of investors, while a company’s 
digital and social media presence was 
similarly cited by 52%. 
The sell-side holds a broadly similar 
view here for a company’s corporate 
strategy (98%), quality of its executive 
management (87%), transparency of 
investor disclosures (89%) and the quality 
of investor communications (86%). When 
it comes to the remaining extra-financial 
factors, the sell-side places more 
emphasis on four areas: company market 
share (92% vs. 83%), ESG (87% vs. 72%), 
media image of the company (83% vs. 
66%) and a digital and social media 
presence (63% vs. 52%). 
FIGURE 4 
Investors: Non-financial factors considered very important to driving a company’s valuation today 
The company's corporate strategy 
Quality of executive management at the company 
The transparency of the company's investor disclosures 
Quality of the company's investor communications 
The company's market share 
Environmental, Social & Governance behaviour of the company 
Media image of the company 
The company's digital and social media presence 
79% 16% 3% 2% 
70% 25% 3% 2% 
63% 28% 7% 2% 
38% 48% 11% 3% 
38% 45% 14% 3% 
24% 48% 25% 3% 
19% 47% 32% 2% 
13% 39% 44% 4% 
50% 100% 
Very important Somewhat important Not important Don't know 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
FIGURE 5 
Investors: To what extent is a company’s digital and social media presence very important, somewhat important, or not important to 
driving a company’s valuation today? 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 
10 
86% 
of investors in Asia consider a 
company’s media image to be an 
important extra-financial factor 
MSLGROUP.COM 
More significant regional differences… 
This area of the research provided us with 
some intriguing differences of opinion 
among investors in the three regions 
surveyed that, added with the factors 
highlighted above, draw attention to some 
tangible differences in investor decision-making 
in the more mature investor 
centres of the U.S. and Europe, versus the 
emerging investor centres of Asia. 
The widest range of opinion among 
investors could be seen in several 
questions: 
√ ESG was viewed globally by 72% 
of buy-side participants as a very or 
somewhat important non-financial 
factor. Interestingly, 85% of Asian 
participants are in agreement 
compared to 65% for the U.S. and 73% 
for European investors. 
√ Market share was viewed globally by 
83% of buy-side participants as a very 
or somewhat important non-financial 
factor. Only 72% of European financial 
professionals concurred with this view 
compared to 89% for both the U.S. and 
Asia. 
√ Media image was viewed globally by 
66% of buy-side participants as a very 
or somewhat important non-financial 
factor. Only 54% of Europeans hold this 
same level of sentiment when it comes 
to media image compared to 66% for 
the U.S. - but both contrast with the 
86% result for Asia. 
√ Digital and social media presence was 
viewed globally by 52% of buy-side 
participants as a very or somewhat 
important non-financial factor. 
Financial professionals in Asia place a 
significantly higher level of importance 
on this extra-financial factor (77%) 
compared to their European (40%) and 
American (49%) counterparts. 
Very important Somewhat important Not important Don't know 
8% 
41% 
46% 
5% 
6% 
34% 
55% 
5% 
34% 
43% 
20% 
3% 
U.S. Europe Asia
11 
A letter from Europe: 
Business value, much more than a sum of the parts 
As Warren Buffett would say, buying a 
company is about more than just price. 
Traditional methods of determining 
economic value may have changed 
significantly in recent times, but the 
impact intangibles can have on corporate 
valuations continues to divide opinion. 
Academics assert that up to half of 
a company’s value lies not on its 
balance sheet, but in its non-financial 
assets: the skills of management, the 
business model, governance, a strong 
environmental story, the role of the 
company in society, brand and market 
share. 
MSLGROUP’s research findings would 
suggest investors do indeed place 
considerable store in these extra-financials. 
Some 58% of investors say 
a clear equity story has become critical 
to investment decision making. This 
premise has long been a clear tenet for 
successful primary offers, but can often 
become overlooked in the day-to-day of 
secondary market trading. 
It is clear that investors around the world 
want to understand a company’s strategy. 
They want to understand a company’s 
vision for the future, with 79% of investors 
placing this first in the most important 
non-financial factors driving valuation. 
Second in our survey is an ability to judge 
the quality of company management. 
This may all sound rather simplistic, but 
as Mr. Buffett would also agree, there 
are no bonus points for complicated 
investments that no-one understands. 
The sustainability of a business’ bottom 
line, i.e. the ability to foresee change and 
adapt, has become the watchword for 
quality. So, a company has to tell both 
the short-term and long-term equity 
story. 
European investors, in particular, place 
great value on the quality of a company’s 
communications, citing it as a far greater 
driver of corporate valuation than 
something like market share. European 
investors are also among the keenest 
to see an alignment of interests. They 
place great store in a clear link between 
directors’ pay and company performance. 
The UK shareholder spring of 2012, a 
reaction to perceived excessive pay in the 
context of poor company performance, 
with some highly coordinated and very 
high-profile shareholder action certainly 
exposed some executive weakness in 
this regard. The end result was several 
high-profile CEO scalps and a clear signal 
companies would do well not to forget. 
This places even more emphasis on 
the openness and transparency with 
which companies approach their public 
disclosures and the way in which they 
live up to investor expectations for 
the business. Indeed, third in the list 
of priority inputs to valuation is the 
transparency of a company’s investor 
disclosures. 
And yet, according to our research, a 
number of European and U.S. investors 
are finding limited value in earnings 
calls with management, or simply do 
not participate in them. While just one 
illustration of a company’s engagement 
with investors, this is clearly a valuable 
opportunity that is being missed. In spite 
of the hours of preparation that can go 
into these calls, it would appear that 
they are falling short of their potential 
and this has major consequences for 
investor relations teams and their 
communications. Companies would 
be well served to review, not only the 
depth of the information they provide on 
earnings calls, but how they deliver it. 
by Claire Maloney 
Partner, CNC* 
It is clear that investors around 
the world want to understand 
a company’s strategy.... This 
may sound rather simplistic, 
but as Mr. Buffett would 
also agree, there are no 
bonus points for complicated 
investments that no-one 
understands. 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 
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There is little doubt that investors tend to 
prefer well-run companies, that deliver 
on their earnings expectations and can 
articulate a more medium to long-term 
future. 
Investors’ favoured information sources 
vary extensively by region. However, 
perhaps unsurprisingly, Bloomberg, 
Financial Times and the Wall Street 
Journal are cited by a significant 
proportion of our sample as the most 
influential business media. It would seem 
that Bloomberg is winning the online war, 
particularly in Asia. 
The digital age has certainly changed the 
level of attention that listed companies 
can get and has disintermediated 
traditional sources of company 
information such as the sell-side. A 
company’s overall reputation matters 
more now than it has in decades. In 
a less deferential society, companies 
with reputation problems are more 
susceptible to public scrutiny. More 
and more, investors recognise this risk. 
Anecdotally, one fund manager we know 
well remarked recently that reputation 
has gone to the top of the list of risk 
factors that they consider before making 
an investment. 
In Europe, our survey found that a positive 
media image is viewed as having become 
more important to investment decision 
making than sell-side analysis. This 
third-party “endorsement” is viewed as 
very or somewhat important as a driver 
of corporate valuation by 66% of US 
investors, 54% of European investors and 
86% of Asian investors. 
While a supportive media image of 
companies is still viewed as an important 
validator of a company’s license to 
operate, in the next three years our 
sample anticipates that social media 
presence will rise in importance. This 
poses an entirely new conundrum for 
investor relations professionals. 
The usefulness of social media from an 
investor relations perspective continues 
to be the subject of much debate. The 
U.S. Securities & Exchange Commission 
stated in 2013 that a public company’s 
use of social media platforms to 
announce material information would 
now be considered compliant with 
Regulation Fair Disclosure (Reg FD). To 
date, the rush to use social platforms as 
a primary material news channel has yet 
to start. 
Of course, the appropriate degree of 
social media engagement will vary from 
company to company. Some companies 
may decide not to engage actively with 
their audiences on social media, others 
will seek competitive advantage in active 
and early adoption. 
Are those companies which ignore social 
media entirely missing a trick? 
Social media certainly can be an 
important component of risk and issues 
management protocols and planning. 
Like it or not, your company may well be 
the subject of debate in investor forums 
and blogs. Being aware of this through 
active listening can already be immensely 
helpful, particularly in the context of 
corporate actions. 
With that said, it will be action—not 
spin or distribution channels —that 
builds supportive investor sentiment. 
Expectations and reputations need to be 
deftly managed, but without delivery they 
can be hollow promises indeed. 
*Claire is currently a Managing Director of Capital MSL. She will take on the title of Partner, CNC, in January 2015 following the merger of the two businesses.
13 
SECTION II 
Investor engagement under 
the microscope 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
The positive news is that there is a broad consensus 
that publicly listed companies have improved their 
communications with investors in recent years. 
Companies are becoming better communicators… 
28% 
U.S. 12% 
41% 
10% 
9% 
Europe 
46% 
16% 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 
14 
MSLGROUP.COM 
The positive news is that there is a broad 
consensus that publicly listed companies 
have improved their communications with 
investors in recent years. Two-thirds of 
investors globally and more than three-quarters 
of sell-side analysts surveyed 
are in agreement with this view, with no 
clear difference across the market areas 
surveyed. 
In addition to the importance placed on 
basic disclosure and communication 
highlighted earlier, one of the principal 
methods for companies to update the 
markets is through the earnings call. The 
findings of our survey question whether 
companies are making the most of this 
investor engagement opportunity. 
We asked our respondents whether they 
found earnings calls useful in developing 
an investment thesis about particular 
stocks. The answer is affirmative for a 
majority, but not significantly so. 
Earnings calls were most valued in Asia 
(85% valuable: 27% very, 58% somewhat) 
and by the sell-side (82% valuable: 28% 
very, 54% somewhat). 
As expected, investors draw data from 
a range of sources when looking at an 
existing or potential investment. Broadly 
speaking these data come from three 
distinct sources: 
√ Information provided by the company 
itself either though filings, meetings or 
calls 
√ Research conducted within the 
investor’s own institution 
√ Data from third parties including 
sell-side reports, wire services and 
traditional media 
18% 
12% 
8% 
Asia 
Very valuable Somewhat valuable Not very valuable Not valuable at all I rarely participate in earnings calls 
14% 
58% 
27% 
1% 
FIGURE 6 
How valuable do you consider earnings calls with regard developing and/or confirming your investment thesis on a company?
15 
When it comes to detailing the role that 
the newswires and other media have 
in informing investors, there are two 
publications that dominate reading lists 
worldwide and one global newswire 
service that is the go-to source for 
information. 
√ Perhaps unsurprisingly, investors 
and the sell-side read the Wall Street 
Journal (WSJ) and the Financial Times 
(FT). The WSJ is most widely read in 
the U.S. and Asia, the FT in Europe. 
Almost half of our sample reads these 
titles both in print and online. The 
other half is split between their use of 
the print and online editions, with age 
being a clear differentiator. 
√ Bloomberg is the clear global leader as 
an electronic news source, with more 
than three times the mentions of any 
other outlet (40% of global investor 
sample). 
Activist or engaged investor? 
Activist investors have become high-profile 
capital market participants in 
recent years, and this survey has drilled 
down into institutional investor views 
around the benefits and costs that they 
see in activism. 
The results of this section show that 
a significant majority of the investors 
surveyed (77%) expect to see overall 
levels of activism increasing in the next 
three years and there is a clear view that 
activism will no longer be confined to 
the U.S. 
Although half of the investors surveyed 
felt that activism was currently mostly 
a U.S. trend (only in the UK, which 
has seen a considerable number of 
activist approaches, was there clear 
disagreement with this statement), 
three in four (76%) feel that activism 
will become more prevalent worldwide. 
Interestingly, U.S. investors, who are 
more accustomed to activist activities, are 
among those most convinced of the trend 
towards globalisation. 
Investors also believe that a high 
investor profile is not a pre-requisite for 
a successful activist approach. Although 
just over one-third of investors agree 
that “only the most well-known activists 
are consistently successful at achieving 
their goals,” almost half of the sample 
disagree. Interestingly, Asian investors 
are the only group where half believe that 
profile supports success. 
77% 
of investors 
surveyed expect to see activism 
increase in the next three years 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
Where do the benefits of activism lie? 
10% 
U.S. Europe Asia 
6% 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 
16 
MSLGROUP.COM 
One of the more striking findings from 
the research is in terms of how investors 
evaluate the benefits of activism. In 
summary, they are more likely to view the 
benefits as short, rather than long-term. 
Also a significant majority believe that 
any short-term gains might actually come 
at the expense of longer-term value 
creation. 
There is a strongly held view among 
investors (72%) that activism can create 
short-term value. Opinion is less clear-cut 
on long-term value creation. Globally, 
the percentage saying activism creates 
long-term value falls to 64%. More 
interesting is the trade-off between short 
and longer-term benefits. Four investors 
in five (81%) believe that short-term 
gains achieved by activists can come at 
the expense of long-term value creation. 
There is very clear agreement with this 
statement in all of the countries surveyed, 
with the strongest agreement of all being 
seen in the country that actually has the 
most experience of activism, the U.S. 
(85% agree). These survey results are 
contextualized in our essay on the “Basics 
of Activism.” 
Exactly half of the investor sample 
believes that many of the world’s 
largest companies would benefit from 
the attention of an activist investor, a 
viewpoint that is held consistently across 
markets. 
Strongly agree Somewhat agree Somewhat disagree Strongly disagree Neither agree/disagree 
42% 
6% 
3% 
43% 
40% 
6% 4% 
40% 
41% 
15% 
9% 
9% 
26% 
FIGURE 7 
To what extent do you agree that short-term gains achieved by activists can come at the expense of longer-term value creation?
17 
When it comes to deflecting the 
attention of an activist, investors see both 
management and investor relations as the 
first line of defence. Some 80% of those 
surveyed felt that the board of directors 
could make a real difference and 75% felt 
the same way about investor relations. 
Interestingly, while this balance was 
consistent between the U.S. and Europe, 
investors in Asia felt that more could be 
achieved by the investor relations team. 
One thing is for sure: Institutional 
investors around the world expect 
activists to continue to develop their 
toolbox in the coming years with a 
common belief (70%) that use of social 
media by activists will only increase as 
a way of mobilising collective action; 
presenting yet another challenge for 
potential targets. 
FIGURE 8 
To what extent do you agree with the following statements ? 
Short-term gains achieved by activists can come at the 81% 15% 4% 
A board of directors that is engaged with 80% 13% 7% 
77% 14% 9% 
Activism will become more of a global 76% 15% 9% 
phenomenon over the next three years 
A strong, engaged investor relations function 75% 18% 7% 
72% 23% 5% 
Activism can create short-term value 
Use of social media by activists will become an 70% 18% 12% 
64% 30% 6% 
52% 37% 11% 
Activism can create long-term value 
Many of the world's largest companies would benefit 50% 41% 9% 
from more activist shareholder attention 
Only the most well-known activists are 37% 48% 15% 
50% 100% 
expense of longer-term value creation 
shareholders is the best defence against activism 
Overall activism levels will rise over the next three years 
can be an effective tool against activism 
increasingly effective tactic over the next three years 
Activism is mostly a U.S. trend 
consistently successful at achieving their goals 
Agree Disagree Neither or Don't know 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 
18 
MSLGROUP.COM 
A letter from the U.S.: 
the basics of activism 
[Preface: The purpose of this commentary 
is to provide a concise, high-level overview of 
shareholder activism that includes a summary 
of the current landscape, key findings from 
the investor survey and a primer on the 
importance of shareholder communications. 
This document is not intended to serve as legal 
advice, which should be obtained from counsel.] 
Shareholder activists tend to target companies 
that are perceived to be underperforming, 
to be sitting on too much cash, to have ill-fitting 
strategies and/or to have ineffectual 
management teams. Many of these “extra-financial” 
factors, which are outlined elsewhere 
in our analysis, have also become elements of 
the decision-making processes of institutional 
investors more broadly. 
In the U.S., and increasingly in parts of 
Europe, investor activism continues to create 
pressure and drive change at companies. 
Over the past decade, publicly disclosed 
long positions controlled by activists have 
grown by more than $150 billion to $176.1 
billion as of the end of June 2014, according 
to Novus, a research firm that provides data 
to investment managers and investors. 
There has also been a recent shift in the 
types of companies that activists are willing 
to target. Whereas activists once tended to 
focus their efforts on small, underperforming 
companies, today many activists have 
turned their attention to some of the most 
well-known and respected brand names in 
Corporate America. Indeed, so far in 2014, 
activists have launched more campaigns at 
S&P 500 member companies than in any 
year prior, according to SharkWatch data, and 
prominent large-cap U.S. companies such as 
Amgen Inc., Apple Inc., and eBay Inc., among 
others, became targets. 
Given the volume and decibel level of these 
campaigns, even a passive filing with the 
U.S. Securities & Exchange Commission 
by a well-known activist, with no other 
public commentary, will often be sufficient 
to generate media interest and market 
activity. Furthermore, the regulatory 
filings of activists and the ensuing media 
coverage also stimulate interest from other 
institutions, which can create a snowball 
effect of pressure on corporations. 
The leading activists fully understand 
the importance of the public relations 
component of their campaigns and, like 
many U.S. corporations, they have begun 
to assemble their own teams of advisors 
including investments banks, law firms, 
proxy solicitors and public relations 
counsellors to assist in their efforts. 
Likewise, it is important for corporations 
that are under attack from an activist (or 
those that are vulnerable to an attack) 
to engage the appropriate advisory 
team to assist them with the necessary 
preparatory and inoculation activities. 
Activism: Accelerating pace and 
global focus 
MSLGROUP’s first global survey of 
institutional investors shows that those 
investors expect the pace of activism to 
grow over the coming three years (77% of 
those surveyed). And while activism has 
predominantly been a U.S. phenomenon, 
with some forays in Western Europe, 
roughly 75% of those surveyed believe 
activism will become more global in nature. 
In the UK, the high-profile shareholder 
activism of 2012—known locally as the 
Shareholder Spring—centred primarily 
on pay and performance issues, exposing 
executive weaknesses with highly targeted 
and coordinated action. This new level of 
engagement by institutional investors in 
the UK resulted in the departure of several 
high-profile CEOs. 
Corporations outside of the U.S. and 
the UK would be well-served to heed 
the lessons from the activist campaigns 
launched in these two markets over 
recent years. This includes understanding 
the important role that the proxy advisory 
firms such as ISS, Glass Lewis and others 
continue to play in providing third-party 
governance research to institutional 
investors far beyond the borders of the 
U.S. and UK. 
Influential activists 
Activist fund managers such as Elliott 
Management Corporation; Greenlight 
Capital, Inc.; Icahn Associates Corp.; 
Jana Partners LLC; Pershing Square 
Capital Management LP; Sandell Asset 
Management Corp.; The Children’s 
Investment Fund Management (UK) LLP; 
Third Point LLC; Trian Fund Management, 
LP; and ValueAct Capital Management 
LP, are included in a group of the 50 
most prominent activists monitored by 
SharkWatch, and clearly they command 
significant media attention. 
According to MSLGROUP’s proprietary 
research, however, almost 50% of 
investors surveyed believe that being well-known 
is not a prerequisite for a successful 
activist campaign. While interesting, it may 
very well be that a bifurcation develops 
where lesser-known activists focus more 
on obscure, smaller companies while 
by Tom Davies 
Senior Vice President, Kekst and 
Company
19 
the major activists continue to shift their 
attention toward mega-cap companies— 
where a greater critical mass among 
investors is many times needed to achieve 
an activist’s goals. 
The benefits of activism: Short vs. 
long term 
The question remains: Do activist 
shareholders contribute to value 
creation? The evidence is mixed. 
MSLGROUP’s research shows that 
investors believe activists are more adept 
at creating short-term value (72%) rather 
than long-term value (64%). And 81% of 
the global institutional investor sample 
(85% in the U.S.) maintain that short-term 
gains achieved by activists may actually 
come at the expense of long-term 
shareholder value. 
Nevertheless, the general attitude 
reflected in the survey does not 
necessarily signal how investors will 
act in any given situation. When faced 
with an activist campaign, shareholders 
will evaluate a proposal based on its 
merits and the company’s prospects and 
plans. All things being equal, however, 
it is reasonable to expect that many 
shareholders will favour a short-term 
opportunity over the potential for an 
undetermined reward further down the 
road. 
Avoiding communications missteps 
There is no single, universally effective 
response to activist investors. Every 
company is unique, with its own executive 
management team, board of directors 
and business performance, challenges 
and opportunities; and activist investors 
themselves come in many varieties. 
Ultimately, a tailored communications 
approach should be developed for each 
situation. 
That said, there are a number of 
communication missteps that contribute 
to suboptimal outcomes in activist 
campaigns for corporations: 
√ Failure to articulate how value will be 
generated 
√ Reinforcement of perceptions that 
the board of directors or executive 
management team is entrenched 
√ Divergent voices speaking for the 
Company, potentially creating a 
perception of divisions between 
management and board of directors 
and/or among members of the board 
√ Personal attacks against an activist 
investor or appearing combative in the 
public arena about the situation 
√ Assumption that the validity of your 
position will be heard and understood 
√ Pursuit of actions that are inconsistent 
with a company’s strategic plan and 
those that appear designed to simply 
placate a particular activist 
Engagement and preparation is 
necessary 
In today’s environment of heightened 
institutional activism, corporations must 
be actively engaged in a dialogue with 
their investors and, in many situations, 
this involves undertaking a board-level 
assessment of potential vulnerabilities 
before an activist appears. When an 
activist does in fact emerge, the board 
and management team should: (1) be 
united, (2) examine their corporate 
strategy and performance through the 
activist’s lens, (3) continually educate 
shareholders on the corporate strategy 
and how it will deliver the value 
shareholders expect, (4) communicate 
personally—shareholders need to 
know that management and the board 
of directors are listening and that 
they understand there are no “sacred 
cows” at the company and (5) cultivate 
relationships with key reporters and 
educate them on the merits of your 
position. 
There is also a core set of 
communications principles that are 
relevant for most corporations dealing 
with an activist situation: 
√ Demonstrate that the board of directors 
and executive management are 
committed to the best interests of all 
stockholders 
√ Ensure consistent messaging that is 
focused and fact based 
√ Candour can enhance credibility; where 
appropriate, acknowledge performance 
challenges 
√ Communicate openness to constructive 
ideas and input from all shareholders 
(this does not mean accepting every 
idea) 
√ Anticipate activist tactics and prepare 
potential responses 
√ Reach out to largest investors, sell-side 
analysts, media, employees and 
customers to ensure understanding of 
Company strategy and key messages 
As the responses of the survey group 
and the views of a range of experts 
make clear, public company directors 
and executives need to be mindful in 
all of their key business decisions of the 
potential for shareholder activism. And, 
at the same time, they need to consider 
how best to communicate effectively 
with key constituents to ensure ongoing 
understanding and support. A tailored 
communications approach that adheres 
to these aforementioned principles 
represents a good starting point for many 
companies in this highly fluid activist 
environment. 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
SECTION III 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 
20 
MSLGROUP.COM 
The changing nature of 
investor behaviour
21 
For investor relations professionals and executives alike, an 
understanding of time horizons and their company’s place in 
an investor’s portfolio are important in evaluating the level of 
engagement to expect. 
While the benefits of portfolio 
diversification are generally accepted, 
opinion on whether a correlation can be 
found between portfolio concentration 
and performance remains divided. But, 
for investor relations professionals and 
executives alike, an understanding of 
time horizons and their company’s place 
in an investor’s portfolio are important 
in evaluating the level of engagement to 
expect. 
The portfolios of the investors surveyed 
ranged in size from 20 to hundreds of 
stocks. Some 16% of those participating 
in the survey represented the sell-side 
and here, as would be expected, there 
was less divergence in the number of 
stocks covered. 
To identify and assess trends in global 
portfolio management, we have looked at 
four key elements: 
√ Regional patterns of portfolio structure 
√ Trends in trading behaviour post the 
financial crisis 
√ Expectations of trends in portfolio 
structure over the next three years 
√ Investment performance vs local 
benchmarks 
On average, our investor sample each 
managed a portfolio of slightly over 100 
stocks. Portfolios in the U.S. were, on 
average, about this size, with the greatest 
differential between Europe (where the 
average was around 140) and Asia (around 
50). Across the board, the sell-side 
respondents on average currently covered 
around 56 individual companies. 
18% 
42% 
30% 
10% 
FIGURE 9 
What approximate percentage of your total portfolio have you held for more than one year? 
14% 
26% 
33% 
27% 
U.S. Europe 
Asia 
Less than 25 25-50 51-75 More than 75 
2% 
10% 
25% 
63% 
2x 
European investors appear to be 
typically holding twice the number 
of stock than their U.S. or Asian 
counterparts 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
43% 
31% 
12% 
14% 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 
22 
4. Investors surveyed tend to benchmark 
their performance against different 
indices, i.e., S&P in the U.S., MSCI 
and Dow Jones in Europe, Hang Seng 
and other local benchmarks in Asia. 
Interestingly, given the relative stability 
in their portfolios, more U.S. investors 
acknowledged they had not beaten their 
own benchmark during 2013 than did any 
of the other regions. Having said that, 
respondents in the other two regions 
were twice as likely to say that they “didn’t 
know” how their portfolio had performed 
or just chose not to provide a response. 
Looking forward to the next three years, 
we can expect to see an increase in the 
average number of stocks owned by 
institutional investors. Around half say 
that they expect their portfolio to have 
a similar construction in terms of the 
number of equities held, however, more 
than one in three expect to have more 
companies represented in their portfolio, 
a percentage that is broadly consistent 
across all portfolio sizes. 
MSLGROUP.COM 
Trading and portfolio structure 
To give an indication of how actively or 
aggressively investors manage their 
portfolios, we sought to identify the number 
of individual stocks in each portfolio that had 
been held for one year, since 2013, and for a 
five-year period, since the financial crisis. 
In total, some 60% of individual stocks have 
remained in an investor’s portfolio for the 
past year - in other words, an average of 60 
of the 100 stocks in a sample portfolio. To 
look at this from the other side, 40 of the 100 
shares now being held will not have been 
among the fund’s investments a year ago. 
There is an even more striking finding 
from a portfolio five years ago. On 
average only one-third of the stocks held 
in 2009 are still held today. 
1. Interestingly, portfolio size does not 
appear to be closely connected with 
portfolio turnover. The 60% figure 
is broadly consistent from the most 
concentrated to the most diverse portfolio. 
2. U.S. portfolio managers surveyed 
appear to be more content with the 
structure of their portfolios over 
the past twelve months than their 
counterparts in Europe and particularly 
Asia. While, 63% of U.S. investors have 
more than three-quarters of the same 
stocks today that they had in 2013, 
slightly less than a third of European 
investors and one in ten of those in Asia 
say that they have continued to hold 
75% of their portfolios. 
3. All regions have seen far greater 
portfolio churn over the five-year 
period. For the average U.S. portfolio, 
some 39% of stocks remain, and 
in Europe it is roughly the same 
percentage at 36%. Asia offers a 
different perspective entirely, perhaps 
reflecting its relative newness as an 
investment centre, with very few stocks 
having been held five years ago (17% 
on average). 
Less than 25 25-50 51-75 More than 75 
31% 
40% 
22% 
7% 
U.S. Europe 
86% 
12% 
2% 
0% 
Asia 
FIGURE 10 
What approximate percentage of your total portfolio have you held for more than five years?
23 
A letter from Asia: 
The privilege of rapid growth is not without challenge 
It is not hard to see why the 21st century 
has been coined the “Asian Century” 
as the region continues its upward 
march. Concentrated population growth, 
increasing educational levels and the 
rapid advance of urbanisation are all 
driving GDP expansion. According 
to the World Bank, Asia is the engine 
driving global economic growth—far 
more than any other region in the 
world—contributing upwards of 40% of 
the growth1 worldwide. This in turn is 
creating a growing pool of home-grown 
institutional and highly affluent retail 
investors. 
In 2014, Asia is expected to surpass 
North America as home to the greatest 
number of people with investable assets 
valued at over $1 million, according to 
a report by Capgemini and RBC Wealth 
Management2. The combined wealth 
of Asia-Pacific’s millionaires currently 
stands at about $14.2 trillion. 
Alongside that, as of October 2014, 
equity market capitalization across Asia 
totals more than $20 trillion—more than 
Europe, Middle-East and Africa (EMEA) 
combined (nearly $13 trillion); although 
less than the Americas, which is more 
than $30 trillion. In 2012, the region saw 
$198 billion in new capital raised by initial 
public offerings in Asia, compared to $102 
billion across EMEA combined and $234 
billion in the Americas.3 
by Glenn Osaki 
President, Asia, MSLGROUP 
While this may look like bonanza territory 
for corporate boards eyeing Asia’s stock 
markets for growth funding, the reality is 
that accessing this capital and retaining 
investors over the long term may not be 
as easy as it has been in the past. 
Companies seeking to tap into Asian 
capital markets can no longer rely on 
being able to simply ride the coattails of 
economic growth. Today, there is strong 
competition for investor funds, with 
24,200 companies now listed on Asia’s 
stock markets - nearly the same as the 
rest of the world combined - with 10,292 
in the Americas and 9,723 in EMEA 
(as of October 2014)4, all competing 
for the attention of institutional and 
retail investors who are much more 
sophisticated and discerning than in the 
past. 
What’s more, MSLGROUP’s survey 
indicates that institutional investors 
in Asia have higher portfolio churn 
than other regions, with 60% of those 
interviewed holding less than half of their 
portfolio for more than a year. These 
results suggest that these investors 
appear to have a shorter-term horizon 
and if they are unhappy with a company’s 
performance they may be more open to 
liquidating an investment. 
Investors in Asia are more 
demanding and have a greater 
choice of investments than 
ever before. 
1 World Bank East Asia and Pacific Economic Update, October 2013, World Bank 
2 World Wealth Report 2014 from Capgemini and RBC Wealth Management 
3 IMF: Asia’s Stock Markets: Are There Crouching Tigers and Hidden Dragons? By Fabian Lipinsky 
and Li Lian Ong, February 2014 
4 World Federation of Exchanges members, October 2014 Monthly Report 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 
24 
MSLGROUP.COM 
Taken together, these results, i.e., the 
high portfolio turnover rates observed 
and the fact that investors in Asia have a 
far greater choice of investments today, 
suggest that investors in the region can 
be more selective where and for how long 
they allocate their investor capital. 
While the majority of respondents in 
all geographies were in agreement that 
investor communications have improved 
over the last five years, respondents 
to MSLGROUP’s study in Asia were 
less convinced, with investors in China 
far more likely to believe that investor 
communication has worsened. 
The survey results suggest that there 
are a number of areas that have become 
more important to investors in Asia in 
terms of influencing their investment 
decision-making process. Among these 
is a clearly articulated equity story. 
Companies must be able to do a good job 
of telling their equity story—no surprise. 
Perhaps more interesting, however, is the 
importance investors in Asia appear to 
place in media, whether that be traditional 
or digital. The vast majority, 86% of the 
institutional investors surveyed in Asia, 
consider a strong media image to be an 
important non-financial factor in driving 
a company’s valuation. Companies that 
take the time to extend their awareness 
through an appropriate media relations 
strategy have the opportunity to benefit 
from a greater share of mind among 
investors. 
Beyond the equity story, there also 
appears to be a clear appetite for 
companies that take their environmental, 
social and governance (ESG) behaviour 
seriously. The results of our survey 
indicate that investors in Asia are also 
looking for more sustainable growth, 
suggesting that those companies 
that embrace ESG and incorporate a 
sustainable approach into the fabric of 
their businesses will have the chance to 
benefit from access to a broader group 
of investors. Taking the time to clearly 
report ESG performance is likely to 
grow in importance as we start to see 
increasing regulatory requirements 
such as those the Hong Kong Stock 
Exchange is looking to bring into effect 
in 2015. The proposed regulations will 
require companies to either report on a 
set of core criteria in terms of their ESG 
commitments, or if the decision is taken 
not to report, management will have 
to provide an explanation as to why the 
company is not reporting. 
The opportunity of a burgeoning pool of 
funds available for investment does not 
come without challenge. In such fast-paced 
markets, there will of course be a 
tension between short-term performance 
and long-term growth. It is imperative 
that corporate executives meet the 
needs of Asian investors when it comes 
to communicating both in form and 
content, if they are to achieve a balanced 
shareholder base that includes investors 
from the region, and, most importantly, a 
fair market valuation.
25 
Methodology 
This survey was conducted by Clarus, an 
MSLGROUP agency. Between August 
and September 2014, 500 institutional 
investors and financial analysts were 
interviewed by telephone. The countries 
covered were the U.S., Canada, UK, 
France, Switzerland, Luxembourg, 
Singapore, China, Hong Kong, Australia, 
and Japan. The sample was randomly 
drawn from a database of active buy-side 
investors and sell-side analysts. Interviews 
were conducted in each country’s native 
language or English, depending on the 
respondent’s preference. 
The breakdown of the survey by 
region was as follows: 
500 interviews worldwide, including: 
√ 175 in Europe (France, UK, Germany, 
Switzerland, Luxembourg) 
√ 175 interviews in North America (U.S. 
and Canada) 
√ 150 interviews in Asia (Singapore, Hong 
Kong, Australia, Japan) 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
MSLGROUP.COM 
If you would like to find out more about how MSLGROUP’s 
global Financial practice and its experts can help you, 
please contact one of the team below: 
MSLGROUP’s Global Institutional Investor Insight Report, December 2014 
26 
MSLGROUP.COM 
In London: 
Roland.Klein@cnc-communications.com 
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MSLGROUP Global Institutional Investors Insight Report 2014

  • 1. 1 Global Institutional Investors Insight Report MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
  • 2. A top-three group globally, the global Financial Practice at MSLGROUP offers specialized, best-in- class strategic communications advisory and other services to more than 500 corporate and institutional clients across major financial and business markets on three continents around the world. The group consists of CNC in 8 markets; Kekst and Company in New York; JKL in the Nordic region, Publicis Consultants in France as well as dedicated Financial hubs in Italy, Poland and Asia. Visit: www.mslgroup.com JKL is a leading Nordic consultancy specialising in strategic communication and stakeholder engagement. Clients turn to JKL for support in building their reputation, understanding perceptions or issues across multiple stakeholder groups, and devising and implementing efficient communication strategies. With more than 25 years’ experience in strategic communication, JKL offers its clients a profound understanding of the Nordic capital markets, business environment and media. JKL has a hub office in Stockholm and consultants in Norway, Denmark, Finland and Brussels. Visit: www.jklgroup.com MSLGROUP’s Global Institutional Investor Insight Report, December 2014 2 MSLGROUP.COM The Financial Practice at MSLGROUP CNC is an experienced international strategic consultancy which helps clients solve business problems through communications. When communication matters, companies, institutions and individuals use CNC’s unrivalled expertise to advise on communications affecting decisions, valuation, change and reputation. CNC works in corporate and financial communications, public affairs, crisis support and change management, underpinned by a strong understanding of the rapidly evolving digital media environment. In November, CNC and Capital MSL announced that the two operations intend to merge in January 2015. Visit: www.cnc-communications.com Kekst and Company has long been the leading corporate, financial and strategic communications advisor to senior management teams and boards of directors on their most serious business and communications issues. Headquartered in New York City, Kekst’s professionals are highly experienced and possess a deep understanding of the business world, the capital markets and the media. Most importantly, they excel at helping clients articulate and effectively communicate key messages to their most important stakeholder groups. The company’s engagements typically involve: investor relations, crisis communications, mergers & acquisitions, bankruptcies and restructurings, litigation support, and corporate governance issues. Additionally, the firm has long been a leader in advising private equity firms and hedge funds, representing nearly 50 entities today. Visit: www.kekst.com A top-five player in France’s M&A league tables, Publicis Consultants’ Financial team also regularly advises investment banks, private equity firms, asset managers and listed companies on their communications strategies. The company’s objective is to develop and protect its clients’ financial image for each of their key targets: investors, journalists, influencers, employees. Publicis Consultants supports clients around a number of delicate communications challenges, including: crisis communications, annual results and Investor Day presentations, financial advertising campaigns, hostile take-over bids, IPO projects, Say on Pay for Annual Shareholders meetings, as well as rumors on Twitter and social networks more generally. Visit: www.publicis-consultants.fr
  • 3. 1 About this research MSLGROUP’s Global Institutional Investors Insight Report is a landmark piece of research. The survey is one of the first of its kind to examine the tangible and intangible factors that influence the decision-making process of institutional investors and sell-side analysts around the world. The report also sheds new light on this group’s motivations and offers perspective on how investor behaviour may evolve in the near future. Among the first to cover a global investor base… Whereas past studies of market participants have focused almost exclusively on the U.S. and European markets, MSLGROUP’s is among the first to include the Asian investment perspective. The findings are compiled from a total of 500 direct telephone interviews with institutional investors and sell-side analysts in Europe (France, UK, Germany, Switzerland, Luxembourg), North America (the U.S. and Canada), and Asia (Singapore, China, Hong Kong, Australia and Japan). The study demonstrates that while these financial professionals have many similarities in approach and perspectives, important nuances do exist among these regions. Decision-making and corporate influence… The survey, conducted during August and September 2014, provides detailed insights and spotlights how investment decision-making and future investor behaviour might change. The research shows how both financial and non-financial factors play a role in decision making and highlights the extent to which the information required to make these decisions can be influenced by corporate disclosures and investor relations activities. Continued growth in activism… In the research, we have also taken one of the first global looks at investor views on shareholder activism, seeking to understand how far investors around the world believe that this approach will develop beyond the U.S. and its early stages in the UK. We also examine global investor views of the benefits that such engagement may, or may not, bring. A more complete picture… Throughout this report, we have highlighted notable global trends in investor opinion, balanced with regional differences (where available). What emerges is a more complete picture of the global investor base, which illustrates why this important corporate audience should not be regarded as an homogenous group. MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
  • 4. MSLGROUP’s Global Institutional Investor Insight Report, December 2014 2 MSLGROUP.COM Executive summary Global capital markets overtook bank lending as the leading source of long-term finance in 20091 as the fall-out from the 2008 financial crisis lowered risk appetite within banks considerably. The effective functioning of these markets is more important to society’s economic progress than ever before. But the views of institutional investors, those who channel the largest assets, are still rarely captured on a global basis. As a group, they are hard-to-reach. But, in this inaugural study, we have successfully tracked investor behaviour, attitudes and beliefs across the three largest regions (by value): Asia, Europe and the United States. Estimates place institutional investor assets under management in these three regions at $58 trillion. The insights we present, therefore, should make for instructive reading. Our findings will inform the investor engagement strategies of listed companies around the world, but might also be considered as a useful input to corporate decision-making, vis-à-vis both primary and secondary capital markets. Those who get the balance of their market engagement right can expect to maintain a ready market for future financing, lower their cost of capital as well as cultivate a supportive investor base for corporate actions. The good news is that two thirds of investors globally believe that investor communications have improved overall. But, this is no time to rest on our laurels. Listed companies are navigating ever-more global capital markets; one where the competition for capital has never been more intense. So what are the key take-aways from the study? The regional variance of investor behaviour and attitudes is highly notable. From region-to-region, our findings show a stark difference in the number of stocks investors hold in their portfolio. Furthermore, average holding periods can also vary significantly. These distinctions can obviously translate into a very different set of investor needs. On average, European investors cover a universe twice the size of their U.S. and Asian counterparts. As a result, European investors seem to place a greater value on the quality of a company’s own communications. This is cited as a very important driver of corporate valuation. European investors are also among the keenest to see a clear alignment of interests; placing great store in the linkage between director compensation and company performance. U.S. investors might be viewed, according to our findings, as the most long-term group. A higher proportion of their portfolio is held constant for five years than in any other region surveyed. This, in a region best known for its investor intervention. One might presume that the loyalty of U.S. investors is, therefore, heavily associated with long-term value creation. Should this goal be threatened, they are more pre-disposed to act, but even in the U.S. a majority of our sample question the long-term benefit of high-profile shareholder activism, as a general rule. by Roland Klein Global leader of MSLGROUP’s Financial practice, and CNC Partner. 1 Lena Komileva for Financial Times, 16 September, 2009
  • 5. 3 Asia represents a clear contrast to the mature western markets in our study. While portfolios are currently more concentrated in Asia than in any other region, its fast-paced markets mean that investors have developed a shorter time horizon. Here, investors reported holding an average of just 46% of their portfolio for more than a year; over a five year period this fell on average to as little as 17% of their portfolio - half that of other regions. This means that stocks held for more than a year by investors in Asia can be the exception, rather than the rule. What’s more, two in three investors in the region readily expect to be managing more stocks in the next three years. These factors will pose even more challenges for investor relations professionals and may alter the aftermarket dynamic of a rising number of Asia-led public offerings. For as long as I can remember the debate over the contribution intangibles make to market valuation has rumbled on. The processes by which an estimate of a business’ economic value is arrived at are generally accepted, but the precise effect of so-called non-financial factors is still unclear. So we asked our sample for their views. What is clear is that, not unreasonably, investors place greatest store in knowing where a company is going and that their expectations will be delivered upon. Worldwide, our investor sample want to understand the corporate strategy, to feel confident in the quality of executive management and to be sure that the company has been open and honest in its disclosures. In my experience, it is not the bumps in the road of any company’s life which frustrate investors, but those bumps which were neither foreseen, nor disclosed, nor discussed. Pre-crisis, environmental, social and governance (ESG) factors were a much discussed topic, particularly in Europe. The turbulence of financial markets and extremes of the last seven years may well have focused attention on the short or medium rather than long-term, but ESG is cited by a significant number of investors in each region as being a ‘somewhat important’ determinant of valuation. It might surprise some of our readers to learn that the country with the largest proportion of investors citing ESG behaviour as very important at present was China. And so, the age-old tension between long-term performance and short-term gain is ever present. Capital markets, by their very nature, are designed to be long-term sources of finance. When a company seeks to access primary capital markets, the purpose is typically to invest and thereby, ultimately, to increase profits. It can take many months or years before the investment pays back its cost. We would do well to remember that investors in any region need a clear roadmap for company development, both when they invest and while they remain invested. All good stories should have a solid beginning, a middle and an end. As capital markets and shareholder bases have become more globalized, companies are faced with an issue of regionalism when it comes to interpreting their corporate messaging, and while this may sound somewhat paradoxical - globalism leading to more regionalism - there is a clear opportunity for companies to strengthen and increase their shareholder bases if they understand these important regional nuances and adjust course accordingly. As a truly global communications company, rich in local expertise, and with a proven track record in corporate, strategic and financial communications, MSLGROUP and its agencies help clients understand such nuances, and navigate complex environments Roland Klein Global leader of the Financial practice, and CNC Partner. MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
  • 6. SECTION I MSLGROUP’s Global Institutional Investor Insight Report, December 2014 4 MSLGROUP.COM Critical factors driving investor decision making
  • 7. 5 A logical approach to understanding the findings is to analyse the data in two ways: First, what are the factors that investors look for when making an investment decision? Second, what can companies do to positively influence investor perception? Fact plus instinct, financial plus non-financial factors... There are multiple factors that impact how institutional investors make investment decisions about which companies to invest in, which companies to continue to hold and which companies to liquidate from a portfolio. In this study, we have drawn a distinction between financial and non-financial factors and then discuss what a company can do to improve its perception among these market participants. We have also analysed the influence of different sources of information used by financial professionals around the globe as part of their research into companies and industry sectors. What is clear is that no matter where in the world an investor might be located, the decision whether to invest or not is based upon a combination of both fact and instinct; and both financial and non-financial factors. A logical approach to understanding the findings is to analyse the data in two ways: First, what are the factors that investors look for when making an investment decision? Second, what can companies do to positively influence investor perception? There are a number of common top-line points in this section, with some striking differences among the different geographic regions and depending upon whether one is a buy-side investor or sell-side analyst. FIGURE 1 Investors: Which of the following factors have become more or less important to understanding a company’s investment story over the past few years? 65% 10% 21% 4% 58% 15% 23% 4% 54% 20% 21% 5% 51% 20% 26% 3% 45% 23% 23% 9% 39% 36% 20% 5% 39% 31% 25% 5% 35% 35% 25% 5% 33% 37% 26% 4% 50% 100% A good track record on meeting earnings expectations A clearly articulated equity story A clear link between Director's remuneration and company performance A dedicated and informed investor relations function Management one-on-ones A relevant, timely and supportive digital or social media footprint Management visibility at industry sell-side conferences Supportive coverage in the financial media Sufficient sell-side research coverage More Important Less Important Same Don't Know MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
  • 8. The factors that have become more important… MSLGROUP’s Global Institutional Investor Insight Report, December 2014 6 MSLGROUP.COM Across the three geographic regions, four factors emerge as key elements in helping buy-side investors more fully understand a company’s investment story: √ A good track record in meeting earnings expectations (65%) √ A clearly articulated equity story (58%) √ A clear link between a Director’s remuneration and company performance (54%) √ A dedicated and informed investor relations department (51%) When asked to assess the importance of specific factors to understanding a company’s equity story, there are three notable areas where the response of “less relevant” matches or even exceeds that given by the sample for “more relevant”. One of these areas, “sufficient sell-side research” (37% less relevant versus 33% more relevant), is illustrative of the increasing importance placed upon internally-generated, buy-side research (a subject that we cover later in this report). In contrast, global sell-side respondents in the survey hold a different view as to what has become more important in recent years. Several elements scored a majority vote among this audience, including sell-side research and attendance at sell-side conferences: √ A good track record in meeting earnings expectations (79%) √ A clearly articulated equity story (72%) √ A dedicated and informed investor relations department (67%) √ Management one-on-ones (57%) √ Sufficient sell-side coverage (57%) √ Management visibility at industry sell-side conferences (55%) √ A clear link between a Director’s remuneration and company performance (52%)
  • 9. 7 While there are clear takeaways as to the critical factors that are driving the investment decision-making process among financial professionals on a global basis, there are also subtle differences in the importance that U.S., European and Asian investors place on various elements. Significant regional variations… While there are clear takeaways as to the critical factors that are driving investment decision-making among financial professionals on a global basis, there are also subtle differences in the importance that U.S., European and Asian investors place on various elements. Communications professionals and CFOs would be well served to understand these nuances when evaluating their shareholder bases and planning their investor relations activities. For the United States, it was notable that between one quarter and one third of the sample said that there had been no change in importance for any of the factors, with the exception of digital footprint. Only when discussing a company’s track record on earnings (54%) and the importance of a clearly articulated equity story (54%) did a majority of the respondents identify that these factors had become more important to their investment decisions. FIGURE 2 Investors: To what extent has a good track record on meeting earnings expectations become more or less important to fully understand a company’s investment story? U.S. Europe Asia 54% 10% 28% 8% 70% 7% 21% 2% 77% 13% 10% 0% More Important Less Important Same Don't Know 80% 40% MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
  • 10. While the overall European sample noted that a clearly articulated equity story had become more important to their decisions (57%), which was on a par with the U.S., the individual country responses show that German institutions take this factor even more seriously (79%). FIGURE 3 Investors: To what extent has a clearly articulated equity story become more important to fully understanding a company’s investment story in the last few years? U.S. Europe Asia MSLGROUP’s Global Institutional Investor Insight Report, December 2014 8 MSLGROUP.COM More Important Less Important Same Don't Know 70% 35% 54% 11% 27% 8% 56% 13% 26% 5% 66% 24% 9% 1% Europe occupied a middle ground on this issue with some striking differences in opinion among the various countries. Compared to the U.S., in Europe there is significantly more attention being paid to the link between a Director’s remuneration and performance (62% compared to 42% in U.S.), and to the earnings track record (70% compared to 54% in U.S.). While the overall European sample noted that a clearly articulated equity story had become more important to their decisions (57%), which was on a par with the U.S., the individual country responses show that German institutions take this factor even more seriously (79%). A significant percentage of German and Swiss investors (38% and 49% respectively) were also among those who viewed supportive financial media coverage as being more important. The UK differed significantly from the European whole on just one factor; with 63% of the UK sample citing one-on-ones with company management as more important to their investment decisions (versus Europe overall at 44%). The results from Asia likewise present a meaningfully different picture, consistent with a developing institutional investment sector in this high-growth region. In Asia, the percentage responding that the surveyed factors have become “more important” to investment decision-making is greater than the global average for every element. In many instances this difference runs into the double-digits. The most impressive variances relate to the importance of sufficient sell-side research (62% compared to 33% globally), management visibility at sell-side events (56% vs. 39% globally), a dedicated IR function (67% vs. 51% globally), management one-to-ones (61% vs. 45% globally), as well as the digital footprint (54% vs. 39% globally).
  • 11. 9 Overall, buy-side participants place much more importance on extra-financials, with 95% of participants stating that a company’s corporate strategy and the quality of its executive management are either very important or somewhat important to driving a company’s valuation. The core drivers of corporate valuation… Non-financial factors, or what are commonly referred to as “extra-financials,” have become more prominent in the investment landscape in recent years as financial markets, corporations and intermediaries have become more sophisticated in assessing intangible factors that may affect a company’s future profitability, but which are not presented in the financial statements. To uncover insights, respondents were asked to rate the importance of extra-financial factors in terms of driving a company’s valuation today. Overall, buy-side participants place much importance on extra-financials, with 95% of participants stating that a company’s corporate strategy and the quality of its executive management are either very or somewhat important to driving a company’s valuation. Notably, 79% indicated that a company’s corporate strategy is very important, and 70% echoed the same sentiment for the quality of the executive management team. The transparency of a company’s investor disclosures is viewed as either very or somewhat important by 91% of buy-siders, with 63% citing this factor as very important. The next three extra-financial factors to be rated as very or somewhat important in driving a company’s valuation include the quality of the company’s investor communications (86%), a company’s market share (83%) and environmental, social and governance (ESG) behaviour (72%). The wider media image of a company was noted as very or somewhat important by 66% of investors, while a company’s digital and social media presence was similarly cited by 52%. The sell-side holds a broadly similar view here for a company’s corporate strategy (98%), quality of its executive management (87%), transparency of investor disclosures (89%) and the quality of investor communications (86%). When it comes to the remaining extra-financial factors, the sell-side places more emphasis on four areas: company market share (92% vs. 83%), ESG (87% vs. 72%), media image of the company (83% vs. 66%) and a digital and social media presence (63% vs. 52%). FIGURE 4 Investors: Non-financial factors considered very important to driving a company’s valuation today The company's corporate strategy Quality of executive management at the company The transparency of the company's investor disclosures Quality of the company's investor communications The company's market share Environmental, Social & Governance behaviour of the company Media image of the company The company's digital and social media presence 79% 16% 3% 2% 70% 25% 3% 2% 63% 28% 7% 2% 38% 48% 11% 3% 38% 45% 14% 3% 24% 48% 25% 3% 19% 47% 32% 2% 13% 39% 44% 4% 50% 100% Very important Somewhat important Not important Don't know MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
  • 12. FIGURE 5 Investors: To what extent is a company’s digital and social media presence very important, somewhat important, or not important to driving a company’s valuation today? MSLGROUP’s Global Institutional Investor Insight Report, December 2014 10 86% of investors in Asia consider a company’s media image to be an important extra-financial factor MSLGROUP.COM More significant regional differences… This area of the research provided us with some intriguing differences of opinion among investors in the three regions surveyed that, added with the factors highlighted above, draw attention to some tangible differences in investor decision-making in the more mature investor centres of the U.S. and Europe, versus the emerging investor centres of Asia. The widest range of opinion among investors could be seen in several questions: √ ESG was viewed globally by 72% of buy-side participants as a very or somewhat important non-financial factor. Interestingly, 85% of Asian participants are in agreement compared to 65% for the U.S. and 73% for European investors. √ Market share was viewed globally by 83% of buy-side participants as a very or somewhat important non-financial factor. Only 72% of European financial professionals concurred with this view compared to 89% for both the U.S. and Asia. √ Media image was viewed globally by 66% of buy-side participants as a very or somewhat important non-financial factor. Only 54% of Europeans hold this same level of sentiment when it comes to media image compared to 66% for the U.S. - but both contrast with the 86% result for Asia. √ Digital and social media presence was viewed globally by 52% of buy-side participants as a very or somewhat important non-financial factor. Financial professionals in Asia place a significantly higher level of importance on this extra-financial factor (77%) compared to their European (40%) and American (49%) counterparts. Very important Somewhat important Not important Don't know 8% 41% 46% 5% 6% 34% 55% 5% 34% 43% 20% 3% U.S. Europe Asia
  • 13. 11 A letter from Europe: Business value, much more than a sum of the parts As Warren Buffett would say, buying a company is about more than just price. Traditional methods of determining economic value may have changed significantly in recent times, but the impact intangibles can have on corporate valuations continues to divide opinion. Academics assert that up to half of a company’s value lies not on its balance sheet, but in its non-financial assets: the skills of management, the business model, governance, a strong environmental story, the role of the company in society, brand and market share. MSLGROUP’s research findings would suggest investors do indeed place considerable store in these extra-financials. Some 58% of investors say a clear equity story has become critical to investment decision making. This premise has long been a clear tenet for successful primary offers, but can often become overlooked in the day-to-day of secondary market trading. It is clear that investors around the world want to understand a company’s strategy. They want to understand a company’s vision for the future, with 79% of investors placing this first in the most important non-financial factors driving valuation. Second in our survey is an ability to judge the quality of company management. This may all sound rather simplistic, but as Mr. Buffett would also agree, there are no bonus points for complicated investments that no-one understands. The sustainability of a business’ bottom line, i.e. the ability to foresee change and adapt, has become the watchword for quality. So, a company has to tell both the short-term and long-term equity story. European investors, in particular, place great value on the quality of a company’s communications, citing it as a far greater driver of corporate valuation than something like market share. European investors are also among the keenest to see an alignment of interests. They place great store in a clear link between directors’ pay and company performance. The UK shareholder spring of 2012, a reaction to perceived excessive pay in the context of poor company performance, with some highly coordinated and very high-profile shareholder action certainly exposed some executive weakness in this regard. The end result was several high-profile CEO scalps and a clear signal companies would do well not to forget. This places even more emphasis on the openness and transparency with which companies approach their public disclosures and the way in which they live up to investor expectations for the business. Indeed, third in the list of priority inputs to valuation is the transparency of a company’s investor disclosures. And yet, according to our research, a number of European and U.S. investors are finding limited value in earnings calls with management, or simply do not participate in them. While just one illustration of a company’s engagement with investors, this is clearly a valuable opportunity that is being missed. In spite of the hours of preparation that can go into these calls, it would appear that they are falling short of their potential and this has major consequences for investor relations teams and their communications. Companies would be well served to review, not only the depth of the information they provide on earnings calls, but how they deliver it. by Claire Maloney Partner, CNC* It is clear that investors around the world want to understand a company’s strategy.... This may sound rather simplistic, but as Mr. Buffett would also agree, there are no bonus points for complicated investments that no-one understands. MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
  • 14. MSLGROUP’s Global Institutional Investor Insight Report, December 2014 12 MSLGROUP.COM There is little doubt that investors tend to prefer well-run companies, that deliver on their earnings expectations and can articulate a more medium to long-term future. Investors’ favoured information sources vary extensively by region. However, perhaps unsurprisingly, Bloomberg, Financial Times and the Wall Street Journal are cited by a significant proportion of our sample as the most influential business media. It would seem that Bloomberg is winning the online war, particularly in Asia. The digital age has certainly changed the level of attention that listed companies can get and has disintermediated traditional sources of company information such as the sell-side. A company’s overall reputation matters more now than it has in decades. In a less deferential society, companies with reputation problems are more susceptible to public scrutiny. More and more, investors recognise this risk. Anecdotally, one fund manager we know well remarked recently that reputation has gone to the top of the list of risk factors that they consider before making an investment. In Europe, our survey found that a positive media image is viewed as having become more important to investment decision making than sell-side analysis. This third-party “endorsement” is viewed as very or somewhat important as a driver of corporate valuation by 66% of US investors, 54% of European investors and 86% of Asian investors. While a supportive media image of companies is still viewed as an important validator of a company’s license to operate, in the next three years our sample anticipates that social media presence will rise in importance. This poses an entirely new conundrum for investor relations professionals. The usefulness of social media from an investor relations perspective continues to be the subject of much debate. The U.S. Securities & Exchange Commission stated in 2013 that a public company’s use of social media platforms to announce material information would now be considered compliant with Regulation Fair Disclosure (Reg FD). To date, the rush to use social platforms as a primary material news channel has yet to start. Of course, the appropriate degree of social media engagement will vary from company to company. Some companies may decide not to engage actively with their audiences on social media, others will seek competitive advantage in active and early adoption. Are those companies which ignore social media entirely missing a trick? Social media certainly can be an important component of risk and issues management protocols and planning. Like it or not, your company may well be the subject of debate in investor forums and blogs. Being aware of this through active listening can already be immensely helpful, particularly in the context of corporate actions. With that said, it will be action—not spin or distribution channels —that builds supportive investor sentiment. Expectations and reputations need to be deftly managed, but without delivery they can be hollow promises indeed. *Claire is currently a Managing Director of Capital MSL. She will take on the title of Partner, CNC, in January 2015 following the merger of the two businesses.
  • 15. 13 SECTION II Investor engagement under the microscope MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
  • 16. The positive news is that there is a broad consensus that publicly listed companies have improved their communications with investors in recent years. Companies are becoming better communicators… 28% U.S. 12% 41% 10% 9% Europe 46% 16% MSLGROUP’s Global Institutional Investor Insight Report, December 2014 14 MSLGROUP.COM The positive news is that there is a broad consensus that publicly listed companies have improved their communications with investors in recent years. Two-thirds of investors globally and more than three-quarters of sell-side analysts surveyed are in agreement with this view, with no clear difference across the market areas surveyed. In addition to the importance placed on basic disclosure and communication highlighted earlier, one of the principal methods for companies to update the markets is through the earnings call. The findings of our survey question whether companies are making the most of this investor engagement opportunity. We asked our respondents whether they found earnings calls useful in developing an investment thesis about particular stocks. The answer is affirmative for a majority, but not significantly so. Earnings calls were most valued in Asia (85% valuable: 27% very, 58% somewhat) and by the sell-side (82% valuable: 28% very, 54% somewhat). As expected, investors draw data from a range of sources when looking at an existing or potential investment. Broadly speaking these data come from three distinct sources: √ Information provided by the company itself either though filings, meetings or calls √ Research conducted within the investor’s own institution √ Data from third parties including sell-side reports, wire services and traditional media 18% 12% 8% Asia Very valuable Somewhat valuable Not very valuable Not valuable at all I rarely participate in earnings calls 14% 58% 27% 1% FIGURE 6 How valuable do you consider earnings calls with regard developing and/or confirming your investment thesis on a company?
  • 17. 15 When it comes to detailing the role that the newswires and other media have in informing investors, there are two publications that dominate reading lists worldwide and one global newswire service that is the go-to source for information. √ Perhaps unsurprisingly, investors and the sell-side read the Wall Street Journal (WSJ) and the Financial Times (FT). The WSJ is most widely read in the U.S. and Asia, the FT in Europe. Almost half of our sample reads these titles both in print and online. The other half is split between their use of the print and online editions, with age being a clear differentiator. √ Bloomberg is the clear global leader as an electronic news source, with more than three times the mentions of any other outlet (40% of global investor sample). Activist or engaged investor? Activist investors have become high-profile capital market participants in recent years, and this survey has drilled down into institutional investor views around the benefits and costs that they see in activism. The results of this section show that a significant majority of the investors surveyed (77%) expect to see overall levels of activism increasing in the next three years and there is a clear view that activism will no longer be confined to the U.S. Although half of the investors surveyed felt that activism was currently mostly a U.S. trend (only in the UK, which has seen a considerable number of activist approaches, was there clear disagreement with this statement), three in four (76%) feel that activism will become more prevalent worldwide. Interestingly, U.S. investors, who are more accustomed to activist activities, are among those most convinced of the trend towards globalisation. Investors also believe that a high investor profile is not a pre-requisite for a successful activist approach. Although just over one-third of investors agree that “only the most well-known activists are consistently successful at achieving their goals,” almost half of the sample disagree. Interestingly, Asian investors are the only group where half believe that profile supports success. 77% of investors surveyed expect to see activism increase in the next three years MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
  • 18. Where do the benefits of activism lie? 10% U.S. Europe Asia 6% MSLGROUP’s Global Institutional Investor Insight Report, December 2014 16 MSLGROUP.COM One of the more striking findings from the research is in terms of how investors evaluate the benefits of activism. In summary, they are more likely to view the benefits as short, rather than long-term. Also a significant majority believe that any short-term gains might actually come at the expense of longer-term value creation. There is a strongly held view among investors (72%) that activism can create short-term value. Opinion is less clear-cut on long-term value creation. Globally, the percentage saying activism creates long-term value falls to 64%. More interesting is the trade-off between short and longer-term benefits. Four investors in five (81%) believe that short-term gains achieved by activists can come at the expense of long-term value creation. There is very clear agreement with this statement in all of the countries surveyed, with the strongest agreement of all being seen in the country that actually has the most experience of activism, the U.S. (85% agree). These survey results are contextualized in our essay on the “Basics of Activism.” Exactly half of the investor sample believes that many of the world’s largest companies would benefit from the attention of an activist investor, a viewpoint that is held consistently across markets. Strongly agree Somewhat agree Somewhat disagree Strongly disagree Neither agree/disagree 42% 6% 3% 43% 40% 6% 4% 40% 41% 15% 9% 9% 26% FIGURE 7 To what extent do you agree that short-term gains achieved by activists can come at the expense of longer-term value creation?
  • 19. 17 When it comes to deflecting the attention of an activist, investors see both management and investor relations as the first line of defence. Some 80% of those surveyed felt that the board of directors could make a real difference and 75% felt the same way about investor relations. Interestingly, while this balance was consistent between the U.S. and Europe, investors in Asia felt that more could be achieved by the investor relations team. One thing is for sure: Institutional investors around the world expect activists to continue to develop their toolbox in the coming years with a common belief (70%) that use of social media by activists will only increase as a way of mobilising collective action; presenting yet another challenge for potential targets. FIGURE 8 To what extent do you agree with the following statements ? Short-term gains achieved by activists can come at the 81% 15% 4% A board of directors that is engaged with 80% 13% 7% 77% 14% 9% Activism will become more of a global 76% 15% 9% phenomenon over the next three years A strong, engaged investor relations function 75% 18% 7% 72% 23% 5% Activism can create short-term value Use of social media by activists will become an 70% 18% 12% 64% 30% 6% 52% 37% 11% Activism can create long-term value Many of the world's largest companies would benefit 50% 41% 9% from more activist shareholder attention Only the most well-known activists are 37% 48% 15% 50% 100% expense of longer-term value creation shareholders is the best defence against activism Overall activism levels will rise over the next three years can be an effective tool against activism increasingly effective tactic over the next three years Activism is mostly a U.S. trend consistently successful at achieving their goals Agree Disagree Neither or Don't know MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
  • 20. MSLGROUP’s Global Institutional Investor Insight Report, December 2014 18 MSLGROUP.COM A letter from the U.S.: the basics of activism [Preface: The purpose of this commentary is to provide a concise, high-level overview of shareholder activism that includes a summary of the current landscape, key findings from the investor survey and a primer on the importance of shareholder communications. This document is not intended to serve as legal advice, which should be obtained from counsel.] Shareholder activists tend to target companies that are perceived to be underperforming, to be sitting on too much cash, to have ill-fitting strategies and/or to have ineffectual management teams. Many of these “extra-financial” factors, which are outlined elsewhere in our analysis, have also become elements of the decision-making processes of institutional investors more broadly. In the U.S., and increasingly in parts of Europe, investor activism continues to create pressure and drive change at companies. Over the past decade, publicly disclosed long positions controlled by activists have grown by more than $150 billion to $176.1 billion as of the end of June 2014, according to Novus, a research firm that provides data to investment managers and investors. There has also been a recent shift in the types of companies that activists are willing to target. Whereas activists once tended to focus their efforts on small, underperforming companies, today many activists have turned their attention to some of the most well-known and respected brand names in Corporate America. Indeed, so far in 2014, activists have launched more campaigns at S&P 500 member companies than in any year prior, according to SharkWatch data, and prominent large-cap U.S. companies such as Amgen Inc., Apple Inc., and eBay Inc., among others, became targets. Given the volume and decibel level of these campaigns, even a passive filing with the U.S. Securities & Exchange Commission by a well-known activist, with no other public commentary, will often be sufficient to generate media interest and market activity. Furthermore, the regulatory filings of activists and the ensuing media coverage also stimulate interest from other institutions, which can create a snowball effect of pressure on corporations. The leading activists fully understand the importance of the public relations component of their campaigns and, like many U.S. corporations, they have begun to assemble their own teams of advisors including investments banks, law firms, proxy solicitors and public relations counsellors to assist in their efforts. Likewise, it is important for corporations that are under attack from an activist (or those that are vulnerable to an attack) to engage the appropriate advisory team to assist them with the necessary preparatory and inoculation activities. Activism: Accelerating pace and global focus MSLGROUP’s first global survey of institutional investors shows that those investors expect the pace of activism to grow over the coming three years (77% of those surveyed). And while activism has predominantly been a U.S. phenomenon, with some forays in Western Europe, roughly 75% of those surveyed believe activism will become more global in nature. In the UK, the high-profile shareholder activism of 2012—known locally as the Shareholder Spring—centred primarily on pay and performance issues, exposing executive weaknesses with highly targeted and coordinated action. This new level of engagement by institutional investors in the UK resulted in the departure of several high-profile CEOs. Corporations outside of the U.S. and the UK would be well-served to heed the lessons from the activist campaigns launched in these two markets over recent years. This includes understanding the important role that the proxy advisory firms such as ISS, Glass Lewis and others continue to play in providing third-party governance research to institutional investors far beyond the borders of the U.S. and UK. Influential activists Activist fund managers such as Elliott Management Corporation; Greenlight Capital, Inc.; Icahn Associates Corp.; Jana Partners LLC; Pershing Square Capital Management LP; Sandell Asset Management Corp.; The Children’s Investment Fund Management (UK) LLP; Third Point LLC; Trian Fund Management, LP; and ValueAct Capital Management LP, are included in a group of the 50 most prominent activists monitored by SharkWatch, and clearly they command significant media attention. According to MSLGROUP’s proprietary research, however, almost 50% of investors surveyed believe that being well-known is not a prerequisite for a successful activist campaign. While interesting, it may very well be that a bifurcation develops where lesser-known activists focus more on obscure, smaller companies while by Tom Davies Senior Vice President, Kekst and Company
  • 21. 19 the major activists continue to shift their attention toward mega-cap companies— where a greater critical mass among investors is many times needed to achieve an activist’s goals. The benefits of activism: Short vs. long term The question remains: Do activist shareholders contribute to value creation? The evidence is mixed. MSLGROUP’s research shows that investors believe activists are more adept at creating short-term value (72%) rather than long-term value (64%). And 81% of the global institutional investor sample (85% in the U.S.) maintain that short-term gains achieved by activists may actually come at the expense of long-term shareholder value. Nevertheless, the general attitude reflected in the survey does not necessarily signal how investors will act in any given situation. When faced with an activist campaign, shareholders will evaluate a proposal based on its merits and the company’s prospects and plans. All things being equal, however, it is reasonable to expect that many shareholders will favour a short-term opportunity over the potential for an undetermined reward further down the road. Avoiding communications missteps There is no single, universally effective response to activist investors. Every company is unique, with its own executive management team, board of directors and business performance, challenges and opportunities; and activist investors themselves come in many varieties. Ultimately, a tailored communications approach should be developed for each situation. That said, there are a number of communication missteps that contribute to suboptimal outcomes in activist campaigns for corporations: √ Failure to articulate how value will be generated √ Reinforcement of perceptions that the board of directors or executive management team is entrenched √ Divergent voices speaking for the Company, potentially creating a perception of divisions between management and board of directors and/or among members of the board √ Personal attacks against an activist investor or appearing combative in the public arena about the situation √ Assumption that the validity of your position will be heard and understood √ Pursuit of actions that are inconsistent with a company’s strategic plan and those that appear designed to simply placate a particular activist Engagement and preparation is necessary In today’s environment of heightened institutional activism, corporations must be actively engaged in a dialogue with their investors and, in many situations, this involves undertaking a board-level assessment of potential vulnerabilities before an activist appears. When an activist does in fact emerge, the board and management team should: (1) be united, (2) examine their corporate strategy and performance through the activist’s lens, (3) continually educate shareholders on the corporate strategy and how it will deliver the value shareholders expect, (4) communicate personally—shareholders need to know that management and the board of directors are listening and that they understand there are no “sacred cows” at the company and (5) cultivate relationships with key reporters and educate them on the merits of your position. There is also a core set of communications principles that are relevant for most corporations dealing with an activist situation: √ Demonstrate that the board of directors and executive management are committed to the best interests of all stockholders √ Ensure consistent messaging that is focused and fact based √ Candour can enhance credibility; where appropriate, acknowledge performance challenges √ Communicate openness to constructive ideas and input from all shareholders (this does not mean accepting every idea) √ Anticipate activist tactics and prepare potential responses √ Reach out to largest investors, sell-side analysts, media, employees and customers to ensure understanding of Company strategy and key messages As the responses of the survey group and the views of a range of experts make clear, public company directors and executives need to be mindful in all of their key business decisions of the potential for shareholder activism. And, at the same time, they need to consider how best to communicate effectively with key constituents to ensure ongoing understanding and support. A tailored communications approach that adheres to these aforementioned principles represents a good starting point for many companies in this highly fluid activist environment. MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
  • 22. SECTION III MSLGROUP’s Global Institutional Investor Insight Report, December 2014 20 MSLGROUP.COM The changing nature of investor behaviour
  • 23. 21 For investor relations professionals and executives alike, an understanding of time horizons and their company’s place in an investor’s portfolio are important in evaluating the level of engagement to expect. While the benefits of portfolio diversification are generally accepted, opinion on whether a correlation can be found between portfolio concentration and performance remains divided. But, for investor relations professionals and executives alike, an understanding of time horizons and their company’s place in an investor’s portfolio are important in evaluating the level of engagement to expect. The portfolios of the investors surveyed ranged in size from 20 to hundreds of stocks. Some 16% of those participating in the survey represented the sell-side and here, as would be expected, there was less divergence in the number of stocks covered. To identify and assess trends in global portfolio management, we have looked at four key elements: √ Regional patterns of portfolio structure √ Trends in trading behaviour post the financial crisis √ Expectations of trends in portfolio structure over the next three years √ Investment performance vs local benchmarks On average, our investor sample each managed a portfolio of slightly over 100 stocks. Portfolios in the U.S. were, on average, about this size, with the greatest differential between Europe (where the average was around 140) and Asia (around 50). Across the board, the sell-side respondents on average currently covered around 56 individual companies. 18% 42% 30% 10% FIGURE 9 What approximate percentage of your total portfolio have you held for more than one year? 14% 26% 33% 27% U.S. Europe Asia Less than 25 25-50 51-75 More than 75 2% 10% 25% 63% 2x European investors appear to be typically holding twice the number of stock than their U.S. or Asian counterparts MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
  • 24. 43% 31% 12% 14% MSLGROUP’s Global Institutional Investor Insight Report, December 2014 22 4. Investors surveyed tend to benchmark their performance against different indices, i.e., S&P in the U.S., MSCI and Dow Jones in Europe, Hang Seng and other local benchmarks in Asia. Interestingly, given the relative stability in their portfolios, more U.S. investors acknowledged they had not beaten their own benchmark during 2013 than did any of the other regions. Having said that, respondents in the other two regions were twice as likely to say that they “didn’t know” how their portfolio had performed or just chose not to provide a response. Looking forward to the next three years, we can expect to see an increase in the average number of stocks owned by institutional investors. Around half say that they expect their portfolio to have a similar construction in terms of the number of equities held, however, more than one in three expect to have more companies represented in their portfolio, a percentage that is broadly consistent across all portfolio sizes. MSLGROUP.COM Trading and portfolio structure To give an indication of how actively or aggressively investors manage their portfolios, we sought to identify the number of individual stocks in each portfolio that had been held for one year, since 2013, and for a five-year period, since the financial crisis. In total, some 60% of individual stocks have remained in an investor’s portfolio for the past year - in other words, an average of 60 of the 100 stocks in a sample portfolio. To look at this from the other side, 40 of the 100 shares now being held will not have been among the fund’s investments a year ago. There is an even more striking finding from a portfolio five years ago. On average only one-third of the stocks held in 2009 are still held today. 1. Interestingly, portfolio size does not appear to be closely connected with portfolio turnover. The 60% figure is broadly consistent from the most concentrated to the most diverse portfolio. 2. U.S. portfolio managers surveyed appear to be more content with the structure of their portfolios over the past twelve months than their counterparts in Europe and particularly Asia. While, 63% of U.S. investors have more than three-quarters of the same stocks today that they had in 2013, slightly less than a third of European investors and one in ten of those in Asia say that they have continued to hold 75% of their portfolios. 3. All regions have seen far greater portfolio churn over the five-year period. For the average U.S. portfolio, some 39% of stocks remain, and in Europe it is roughly the same percentage at 36%. Asia offers a different perspective entirely, perhaps reflecting its relative newness as an investment centre, with very few stocks having been held five years ago (17% on average). Less than 25 25-50 51-75 More than 75 31% 40% 22% 7% U.S. Europe 86% 12% 2% 0% Asia FIGURE 10 What approximate percentage of your total portfolio have you held for more than five years?
  • 25. 23 A letter from Asia: The privilege of rapid growth is not without challenge It is not hard to see why the 21st century has been coined the “Asian Century” as the region continues its upward march. Concentrated population growth, increasing educational levels and the rapid advance of urbanisation are all driving GDP expansion. According to the World Bank, Asia is the engine driving global economic growth—far more than any other region in the world—contributing upwards of 40% of the growth1 worldwide. This in turn is creating a growing pool of home-grown institutional and highly affluent retail investors. In 2014, Asia is expected to surpass North America as home to the greatest number of people with investable assets valued at over $1 million, according to a report by Capgemini and RBC Wealth Management2. The combined wealth of Asia-Pacific’s millionaires currently stands at about $14.2 trillion. Alongside that, as of October 2014, equity market capitalization across Asia totals more than $20 trillion—more than Europe, Middle-East and Africa (EMEA) combined (nearly $13 trillion); although less than the Americas, which is more than $30 trillion. In 2012, the region saw $198 billion in new capital raised by initial public offerings in Asia, compared to $102 billion across EMEA combined and $234 billion in the Americas.3 by Glenn Osaki President, Asia, MSLGROUP While this may look like bonanza territory for corporate boards eyeing Asia’s stock markets for growth funding, the reality is that accessing this capital and retaining investors over the long term may not be as easy as it has been in the past. Companies seeking to tap into Asian capital markets can no longer rely on being able to simply ride the coattails of economic growth. Today, there is strong competition for investor funds, with 24,200 companies now listed on Asia’s stock markets - nearly the same as the rest of the world combined - with 10,292 in the Americas and 9,723 in EMEA (as of October 2014)4, all competing for the attention of institutional and retail investors who are much more sophisticated and discerning than in the past. What’s more, MSLGROUP’s survey indicates that institutional investors in Asia have higher portfolio churn than other regions, with 60% of those interviewed holding less than half of their portfolio for more than a year. These results suggest that these investors appear to have a shorter-term horizon and if they are unhappy with a company’s performance they may be more open to liquidating an investment. Investors in Asia are more demanding and have a greater choice of investments than ever before. 1 World Bank East Asia and Pacific Economic Update, October 2013, World Bank 2 World Wealth Report 2014 from Capgemini and RBC Wealth Management 3 IMF: Asia’s Stock Markets: Are There Crouching Tigers and Hidden Dragons? By Fabian Lipinsky and Li Lian Ong, February 2014 4 World Federation of Exchanges members, October 2014 Monthly Report MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
  • 26. MSLGROUP’s Global Institutional Investor Insight Report, December 2014 24 MSLGROUP.COM Taken together, these results, i.e., the high portfolio turnover rates observed and the fact that investors in Asia have a far greater choice of investments today, suggest that investors in the region can be more selective where and for how long they allocate their investor capital. While the majority of respondents in all geographies were in agreement that investor communications have improved over the last five years, respondents to MSLGROUP’s study in Asia were less convinced, with investors in China far more likely to believe that investor communication has worsened. The survey results suggest that there are a number of areas that have become more important to investors in Asia in terms of influencing their investment decision-making process. Among these is a clearly articulated equity story. Companies must be able to do a good job of telling their equity story—no surprise. Perhaps more interesting, however, is the importance investors in Asia appear to place in media, whether that be traditional or digital. The vast majority, 86% of the institutional investors surveyed in Asia, consider a strong media image to be an important non-financial factor in driving a company’s valuation. Companies that take the time to extend their awareness through an appropriate media relations strategy have the opportunity to benefit from a greater share of mind among investors. Beyond the equity story, there also appears to be a clear appetite for companies that take their environmental, social and governance (ESG) behaviour seriously. The results of our survey indicate that investors in Asia are also looking for more sustainable growth, suggesting that those companies that embrace ESG and incorporate a sustainable approach into the fabric of their businesses will have the chance to benefit from access to a broader group of investors. Taking the time to clearly report ESG performance is likely to grow in importance as we start to see increasing regulatory requirements such as those the Hong Kong Stock Exchange is looking to bring into effect in 2015. The proposed regulations will require companies to either report on a set of core criteria in terms of their ESG commitments, or if the decision is taken not to report, management will have to provide an explanation as to why the company is not reporting. The opportunity of a burgeoning pool of funds available for investment does not come without challenge. In such fast-paced markets, there will of course be a tension between short-term performance and long-term growth. It is imperative that corporate executives meet the needs of Asian investors when it comes to communicating both in form and content, if they are to achieve a balanced shareholder base that includes investors from the region, and, most importantly, a fair market valuation.
  • 27. 25 Methodology This survey was conducted by Clarus, an MSLGROUP agency. Between August and September 2014, 500 institutional investors and financial analysts were interviewed by telephone. The countries covered were the U.S., Canada, UK, France, Switzerland, Luxembourg, Singapore, China, Hong Kong, Australia, and Japan. The sample was randomly drawn from a database of active buy-side investors and sell-side analysts. Interviews were conducted in each country’s native language or English, depending on the respondent’s preference. The breakdown of the survey by region was as follows: 500 interviews worldwide, including: √ 175 in Europe (France, UK, Germany, Switzerland, Luxembourg) √ 175 interviews in North America (U.S. and Canada) √ 150 interviews in Asia (Singapore, Hong Kong, Australia, Japan) MSLGROUP’s Global Institutional Investor Insight Report, December 2014 MSLGROUP.COM
  • 28. MSLGROUP.COM If you would like to find out more about how MSLGROUP’s global Financial practice and its experts can help you, please contact one of the team below: MSLGROUP’s Global Institutional Investor Insight Report, December 2014 26 MSLGROUP.COM In London: Roland.Klein@cnc-communications.com In New York: Tom-Davies@kekst.com In Paris: Jerome.Goaer@consultants.publicis.fr In Shanghai: Glenn.Osaki@mslgroup.com In Stockholm: Peter.Benson@jklgroup.com In Tokyo: Jochen.Legewie@cnc-communications.com Designed by MSLGROUP CREATIVE+