2024 Investor Engagement Trends & Insights

In 2024, we engaged with hundreds of companies globally—in their offices, at ours, and during investor relations conferences. Our team attended IR conferences inAustralia (AIRA), Canada (CIRI), the U.S. (NIRI), and the UK (IR Society),gaining firsthand insights into the challenges companies are facing in today’s capital markets landscape. A universal challenge emerged:

Companies across market caps are spending a disproportionate amount of time engaging with short-term investors, and are finding it increasingly difficult to attract new, long-only investors.

A recent Bloomberg article articulated an underlying issue compounding these challenges. In addition to regulatory pressures that altered the corporate access landscape, the sell-side continues to shrink. One data point that jumped out to us is:

The steep decline in the number of analysts at the world’s 15 largest banks—from nearly 4,600 to just 3,000.

Equity research analysts are spread thinner than ever before. The results are myriad. Most notably, many companies have lost coverage, and analysts have been directed to focus on a narrower audience of institutional investors—primarily high-turnover hedge funds.

Several studies suggest stocks that fall off the sell-side radar often struggle to attract investors, distorting valuations and making markets less efficient. For instance, according to a small- and mid-cap strategist at Jefferies:

Small-cap companies with no analyst coverage have underperformed those with more than 10 analysts by nearly 3 percentage points annually since 2001.

Unfortunately for companies, traditional corporate access channels are failing to meet this need. Conferences and non-deal roadshows organized through the sell-side lack the representation of the long-only investor community. Long-only investors are decreasing their reliance on bank resources as the evolving regulatory landscape, including MiFID, continues to impact budgetary decisions. Meanwhile,

Banks are prioritizing high-turnover hedge funds, which generate approximately 80% of their market revenues.

This leaves companies dedicating significant time and resources to meetings with short-term, trading oriented investors.

Our analysis of meeting trends among a sample set of 100 Rose & Company corporate clients, ranging from mega-cap to small-cap, confirms this trend. Over the last three years:

70% of investor meetings organized through traditional corporate access channels were held with high-turnover funds, averaging an annual portfolio turnover of 91%.

S&P’s 2023 Benchmarking Analysis Report supports these findings, indicating that among 70+ issuers across various sectors and market caps, 76% had a fast-money investor as their most frequently engaged firm.

Engaging with high-turnover funds is inefficient, as these short-term investors lack long-term commitment, making it a poor investment of companies’ resources and time.

The message is clear: Companies must differentiate themselves, build their own voice, and engage directly with the buy-side to remain relevant and access the right investors in an increasingly passive, quant-driven market.

Effective investor engagement requires identifying and building relationships with investors who have a longer holding period, as they provide stability and align better with long-term corporate goals.

Over the past year, Rose & Company partnered with over 100 corporate clients to address these challenges, deploying strategic investor outreach programs designed to identify and engage with suitable high-quality, long-term investors. Among other things, we:

• Facilitated 7K+ meetings with investors that meet our strict criteria (1) Long-term investment horizon, (2) Ability to take a meaningful position, (3) Ownership of similar stocks in terms of market cap, trading, liquidity, and exchange, and (4) Presence of senior decision-makers.
• Expanded our global team by 40%, strengthening our physical presence in key North American and European markets while also broadening our reach into the institutional investor community.

Our iterative feedback process has been instrumental in shaping client messaging strategies and addressing investor concerns. We have been privileged to collaborate with clients on high-profile investor days, helping them effectively articulate vision, strategy, and performance.

As we celebrate our 10-year anniversary, we remain dedicated to advocating for our clients, ensuring a complete alignment of interests. Our interests are aligned with the board, management, shareholders, and employees with a singular purpose of driving valuation.

^{Source: Bloomberg. "Wall Street Analyst Pay Drops30% as Banks Slash Equity Research." January 8, 2025}