US asset manager T Rowe Price has dispelled reports that it is to bypass Wall Street banks on corporate access.
The Wall Street Journal had reported that T Rowe Price and a number of asset managers were organizing private conferences as a way to bypass banks to gain access to management of companies, indicating a possible new trend – especially as Mifid II begins to take a tighter hold in the US.
The move would put at risk millions of dollars in fees that banks make from introducing investors to top executives.
Connecticut-based consultancy Greenwich Associates estimates that corporate access was worth $900 mn to banks last year – about 12 percent of their total equities revenues – boosting trading revenue and helping to draw corporate clients into closer business relationships.
But T Rowe Price put this idea to bed in a statement, which reads: ‘Recent press reports have suggested that big investment firms, including T Rowe Price, plan to discontinue the long-standing practice of [using] Wall Street firms for access to companies in which we invest. In fact, T Rowe Price continues to find value in the access to corporate leaders that Wall Street has facilitated over many years.
‘To best meet our investors’ needs and better serve our clients, we are supplementing that practice by joining with other major asset management firms to plan separate corporate access events that will provide a unique and tailored research experience for our company’s investors. As a fundamental investment research firm, in-depth meetings with company management teams continue to be integral to our investment process and to our ability to make informed investment decisions on behalf of our clients.’