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

62 Pages Posted: 21 Apr 2021 Last revised: 13 Jul 2024

See all articles by Marco Becht

Marco Becht

Solvay Brussels School of Economics and Management (ULB); European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)

Julian R. Franks

London Business School - Institute of Finance and Accounting; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Hannes F. Wagner

Bocconi University - Department of Finance; Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research; European Corporate Governance Institute (ECGI)

Multiple version iconThere are 2 versions of this paper

Date Written: July 13, 2024

Abstract

We use large language models to analyze the content of 4,700 private meetings between a large active asset manager and its portfolio firms. The high-level meetings convey mostly soft information about the firm, and little about industry or market. Fund manager meetings focus on business models and financial metrics, while governance specialist meetings focus on ESG risks. 0.4% of meetings discuss material non-public information. Trades by fund managers increase with meetings attended by senior management, rated as unusually good or bad, where the tone is significantly positive or negative, or assessed as creating consensus. Meeting-informed portfolios can generate significant outperformance. 

Keywords: active investing, corporate governance, direct access, financial analysts, fund managers, generative pre-trained transformers, large language models, natural language processing

JEL Classification: G11, G14, G23, G34

Suggested Citation

Becht, Marco and Franks, Julian R. and Wagner, Hannes F., The Benefits of Access: Evidence from Private Meetings with Portfolio Firms (July 13, 2024). European Corporate Governance Institute – Finance Working Paper No. 751/2021, Available at SSRN: https://ssrn.com/abstract=3813948 or http://dx.doi.org/10.2139/ssrn.3813948

Marco Becht

Solvay Brussels School of Economics and Management (ULB) ( email )

42 Avenue F. D. Roosevelt
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Brussels, 1050
Belgium
+32 2 6504466 (Phone)

HOME PAGE: http://www.solvay.edu/profile/marcobecht

European Corporate Governance Institute (ECGI) ( email )

Palace of the Academies
Rue Ducale 1 Hertogstraat
Brussels, 1000
Belgium

HOME PAGE: http://www.ecgi.global/users/marco-becht

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Julian R. Franks

London Business School - Institute of Finance and Accounting ( email )

Institute of Finance and Accounting
Sussex Place - Regent's Park
London NW1 4SA
United Kingdom
+44 20 7262 5050 x3449 (Phone)
+44 20 7724 3317 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: https://ecgi.global/

Hannes F. Wagner (Contact Author)

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

HOME PAGE: http://mypage.unibocconi.eu/hanneswagner

Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research ( email )

Via Roentgen 1
Milan, 20136
Italy

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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