Greenwich Report Warns: Don’t Ignore Hedge Funds

Jan 28 2008 | 11:14am ET

U.S. companies should be adjusting their investor relations strategies to cater to the growing influence of hedge funds, according to new research from Greenwich Associates. 

Hedge funds already account for close to half of the trading volume on the New York Stock Exchange by some estimates, and research from Greenwich suggests they will continue to expand their presence in global financial markets.

The research firm also revealed an important finding that might come as a surprise to corporate investor relations professionals: U.S. institutional investors paid Wall Street nearly $1.75 billion last year in equity brokerage commissions specifically designated to compensate brokers for coordinating and facilitating face-to-face meetings between the institutions and corporate management teams at private gatherings or industry conferences.

While that figure represents about 35% of total U.S. institutional commission payments, hedge funds use about 42% of their commissions to compensate brokers for delivering meetings with company management teams.

“Corporate IR professionals should be intimately familiar with what the booming business brokers have built selling access to company management teams,” said Greenwich Associates consultant Bill Bruno. “More specifically, IR professionals should be aware that the time of their top executives is a valuable asset that companies should be managing strategically and for their own benefit.”

The typical hedge fund analyst covers fewer industry groups (4.2 in 2007) than the average among buy-side analysts as a whole (5.1). However, hedge fund analysts cover 60% more companies than their Wall St. peers across the buy side, a whopping 87 companies on average in 2007—up from 75 the prior year—versus just 54 for the buy side as whole, according to the report.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.