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

Becht, Marco; Franks, Julian R.; Wagner, Hannes F.

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

CEPR Discussion Paper No. DP16337

68 Pages Posted: 14 Jul 2021

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)

There are 2 versions of this paper

Date Written: July 2021

Abstract

We analyze the monitoring efforts of a large active asset manager that involve high-level private meetings with portfolio firms that are unobservable to outsiders. Our analysis reveals the inner workings of the asset management organization based on detailed records of contacts with executives and board members of portfolio firms, internal analyst recommendations, voting decisions, and daily fund-level stock holdings. Private meetings generate pronounced trading patterns, with fund managers trading on and around meeting days and votes. Our results show that engagement with target firms generates insights and information advantages, increases trading and is associated with significant abnormal returns.

JEL Classification: G11, G14, G23, G34

Suggested Citation: Suggested Citation

Becht, Marco and Franks, Julian R. and Wagner, Hannes F., The Benefits of Access: Evidence from Private Meetings with Portfolio Firms (July 2021). CEPR Discussion Paper No. DP16337, Available at SSRN: https://ssrn.com/abstract=3886823