Asian Targeting Evan Bernstein Director Corporate Services Adam Knight Analyst, Data & Analytics

Transcription

1 Asian Targeting New York Washington D.C. London Paris Vienna Frankfurt Hong Kong Tokyo Cape Town Evan Bernstein Director Corporate Services Adam Knight Analyst, Data & Analytics

2 Russian Investment Overview Asia Scandinavia Cont. Europe UK & Ireland N. America 0, , , , , , ,0 $ Value Q1-15 Q2-14 Q1-14 Asian investment into Russian equities is quite a way behind other regions. So how do you increase that level of investment to match regions such as North America and Europe? 2

3 What is Investor Targeting? Investor targeting (or shareholder targeting) is the process used by companies to identify and approach appropriate (potential) institutional investors. At point of origination companies rely upon the bookrunners to match their company with interested parties. In the secondary market who s responsibility is it to find suitable targets? 3

4 Identifying Potential Investors Consider All Factors for Each Investor, Portfolio, and Contact: Quantitative: Peer Holdings Industry Holdings Geographic Focus Investment Style Fundamental Match Purchasing Power Portfolio Inflows / Outflows Qualitative: Prior Communication History Typical Amount of Communication Needed Equity Coverage Structure (Analyst / PM, multiple offices) Management Discussion Tendencies Changes to Firm Structure / Mandates 4

5 Understanding the Shareholder Base

6 Fundamental Analysis - Size As part of the fundamental review, one factor we would look at is the free float market capitalisation. In the case of Asian investment different investment centre s prefer different size companies. 6

7 Fundamental Analysis Investment Style Growth GARP Value 91,0% 91,9% 72,7% 63,8% 71,3% 2,3% 15,9% 5,3% 8,5% 10,9% 6,2% 11,1% 2,7% 13,3% 11,6% Mega Large Mid Small Micro Mega Large Mid Small Micro Mega Large Mid Small Micro Predominately, investors of Russian equities have favoured Growth strategies to match the GDP growth of the economy. Both Value and GARP ( Growth at a Reasonable Price ) have played a bit role among Asian investors of Russian equities. Among North American investors we have seen several Value players increasing their exposure to Russia. 7

8 Миллиарды Миллиарды Will all Asian outreach be proactive? North America $Value Europe $Value No. It would seem it is only a matter of time before the Asian market evolves and Exchange Traded Funds ( ETFs ) become part of its arsenal. Investment in ETFs has more than doubled in the past 5 years In Europe the development has not yet matched levels as seen in North America but its growth has been astounding. 8

9 How to tap into High Net Worth Individuals? China will look launch a 2 nd QDII program, known as QDII2. This version of the program however will allow individual investors, rather than institutions, to invest outside of the domestic market. The pilot will start in 6 cities in mainland China: Shanghai, Tianjin, Chongqing, Wuhan, Shenzhen and Wenzhou. Individuals with at least $160,000 in financial assets will be able to apply to join the scheme. In March, Shanghai said it hoped to start QDII2 in its free trade zone this year. "A lot of Chinese HNWs [high-net worth individuals] have had almost all their wealth linked to the fortunes of the Chinese economy. That has served them very well but with Chinese economic growth slowing after a tremendous run some HNWs are rebalancing their portfolios away from China. Jill Turner, immigration law expert at Pinsent Masons, Jan UK based law firm Pinsent Masons undertook a study of the number of UK visas approved to Chinese HNWs in the past year. The study shows the number of visas given to Chinese investors has almost doubled on the previous year. 9

10 Proof of Concept