Corporate Access reports are becoming a staple of Investment Banking presentations to Corporates.  The problem for Bankers in many sell side firms  - is that generating these reports is much harder than it should be.

The Wall Street Transcript’s corporate access software has been designed to maintain the details and accuracy of the data set generated by a sell side Corporate Access business. MeetMax CAM generates clear and accurate reports of what management meeting took place, where, when and the buy side attendees.  These reports are then used for direct discussions with buy side firms about services and compensation.

What is less often discussed, is the considerable value of Corporate Access reporting for the investment banking side of the business. MeetMax CAM generates the most detailed reports available for each Corporate of which buy side firms the Corporate has met with, when, and where. This can be of great value to a banker in his dialogue with the issuer as part of the day-to-day relationship management. In banking, relationship management is critical as the deals are infrequent but very profitable - and it is vital that the bank demonstrate support of the Corporate between deals.

While the role of the Corporate Broker is well established in the UK, it does not have an exact counterpart in

• Advising Corporates on fund raising (e.g. new issues of shares).
• Helping generate interest among investors for the company’s securities.
• Making a market in the stock.

The global settlement of 2003 between the SEC, NASD and NYSE placed strong constraints on using research to provide Service #2 above.  Corporate Access is not subject to these constraints - and is a vital part of Service #2, that is needed to get to Service #1.

We are seeing increasingly that Investment Bankers include Corporate Access reports in their presentation materials for Corporate meetings. MeetMax CAM makes that quick, easy and accurate.

I think 2010 will be the year when buyside firms really get organized about tracking their Corporate Access services from the sellside.   There are a few trends making this likely.

• Critical mass.  After a few years of Wellington and SAC being the only guys driving this bus - there are now a sizeable number of buyside firms tracking what meetings they take so their traders can better figure out who to pay.  This further drives other firms to join the trend.
• They are getting help with new and cheaper tools.  Voting tools used to be exotic - but they are getting simpler and cheaper - and powerful meeting tracker services act as vote support systems or ersatz vote systems.   These are now being marketed by many firms which is just raising the awareness on the buyside.
• Corporate Access (and direct contact with analysts) gets ever more valuable - and guesswork is no longer a basis for buyside firms to allocate payment.

CAM is doing its part too.  We are the best way for brokers to report their meetings - by a long way.  In fact the only way to get into some of these buyside systems. Just doing our bit to help our sellside clients get paid.

This is the year that Voting Systems on the buyside are really going to accelerate in usage.

A lot of the original voting systems - Thomson Extel in particular - use a top down survey approach.  Meaning, as a PM, you vote on Bank X’s research out of 10, their Corporate Access out of 10.  You do not vote on specific meetings or ideas.  But buyside firms are finding it hard to trust this kind of vote - when their PMs are filling out the survey from memory.  They need data - and they know it.   They need to be able to run a simple league table that shows the number of meetings they have taken by bank.  Ideally weighted for meeting value.

Lots of firms will be there to provide such tools this year.  We are now live with FactSet as the first and are about to go live with themarkets.com.

One of our clients has a new 1-on-1 coordinator scheduling meetings for an event happening at the end of the week. She called today to find out how to do the scheduling in MeetMax. Forty-five minutes later, she had all of her meetings scheduled: 61 attendees, 21 with meeting requests, 6 companies, 54 total meetings. Here’s how we did it:

• Schedule requested meetings for the tier 1 attendees first, using a batch scheduler to make this process quick and simple.
• Repeat for lower tiers of attendees, until it looks like there are no more fillable requests.
• Then go through the list of unscheduled attendees, and use the information provided by the attendee, when they registered, to determine who is willing to participate in small group meetings. Schedule these meetings by combining attendees who have indicated similar levels of knowledge of the company with whom they will be meeting.
• Continue this until you have scheduled all attendees and/or filled up the available timeslots for each company.
• Review the rooms grid to make sure that the number of meetings in each timeslot does not exceed the available number of rooms. Adjust the schedules as necessary.

The secret to efficiently scheduling meetings: Collect information about each request (priority, preferred meeting size, knowledge of the subject) when the attendee registers.

What to do if your Institutional Clients don’t pay you commensurate with the Corporate Access work you do for them?  This could be the biggest single question facing Sales Heads who we speak to all the time.

First - do you know which those Clients are?  Which means knowing precisely, for each of your Clients, what you have done for them.

Second - were the Clients aware of all that you had done for them?   The best assumption for this question is “no”.

Third - under-payers can then be classified as either a) we don’t value your services the way you think we do,  b) we do value your services and can pay more but you’ve never been the squeaky wheel, or c) we cannot or will not pay any more.

The last may mean dropping the Client - but a) and b) provide a clear path to the sales rep to talk to the Client about modifying the service mix and getting paid more.

We realize that Corporate Access is a soft-dollar activity for the most part.  (Leaving out the considerable success of Gerson Lehrman, of course).   So invoices will never be sent out looking like this.

That does not mean that banks should forget about Invoicing.  

Institutional  clients are becoming ever more rigorous in  the voting processes they follow - driven by many factors.   A compliance need to justify how they direct commissions.   More sophisticated tools for managing their voting.  A desire perhaps, in these challenging times, to more accurately and generously reward their smaller sellside providers as the bulge bracket banks see their dominance eroded.

So while Institutional Clients develop what amount to sophisticated Purchasing and Accounts Payable departments, not all sellside firms have yet responded by developing equally sophisticated Accounts Receivable procedures.  And yet for any business, improving Accounts Receivable is often the easiest and quickest path to improving the cash flow.

Specifically, banks should be generating and delivering detailed reports for each and every Client that receives any kind of Corporate Access benefit - including Conference meetings, non-deal Roadshows, Company Visits, Conference Calls, Analyst lunches, Analyst Roadshows, Field Trips.   These reports need to be complete, accurate, detailed and timely.   They should be considered as if they were an invoice.  Sample.

Complete - every type of “billable” activity needs to be included.   Imagine if a wireless company didn’t invoice for calls made in Texas, or for those made on Tuesdays.  Activity not counted and reported is revenue left on the table.

Accurate - obvious errors are simply an invitation to a Client to discard the entire report.  The more that is done by hand, by busy salespeople, for example, or by copying and pasting data between systems - the greater the room for error.

Detailed - many Clients need full details on each meeting.  Who was there, was it a 1×1 or a group, where it was, what type of meeting it was, when did it start.   They need this to let the PM attribute the correct number of votes.  Without it, they will give the minimum number, or none at all.   Reports also need to be formatted in a way as to make Client processing as easy as possible.  

Timely - if the reports are not delivered on time, they may not be counted, or votes may be applied with minimal consideration.

These times demand that valuable services that are provided to Clients are fully compensated.  One component of that it to invoice for Corporate Access services - to show how serious you are about getting paid for it.

One brighter spot for smaller sellside firms this year, is that there is a lot of institutional market share up for grabs.   Bear and Lehman and Merrill/BofA have opened up a sizeable chunk of share, and many hedge funds are reassessing their allocations to those  remaining bulge firms.

But smaller sellside firms will need to get organized qujickly if they want to take advantage of this opportunity.

A helpful starting point is to  think like an attorney.   Not litigiously (please) but in tracking billable hours.  That attorney phone call to discuss the project.  Is it free?  That lunch to review progress?    That piece of research?  No, no and no.   Attorneys are ruthless at keeping track of every possible billable minute.  If an associate doesn’t bill 50 hours a week, they are in trouble, and if they don’t track it, it isn’t billable.

Brokerage firms don’t bill for hours but they assuredly bill for activities.  Billable Activities – any and  all activities that a Client might give you a vote for.   These include Corporate access meetings, 1×1s, field trips, client visits, analyst visits, substantive analyst calls, lunches with industry experts, conference calls or video conferences.  What is not billable?  Sales calls, voicemails, emails.   

Which is why CRMs (customer relationship management) systems make such incredibly poor billing systems.   They mix billable and non-billable activities together, and they are also very poor at reporting.  Law firms don’t use their CRMs for billing, and attorneys generally don’t prepare the bills.  They discuss them with clients.  CRMs are one thing, billing systems another.

Likewise, brokerage firms need to track Billable Activities.  Ruthlessly.   And these billable activities need to find their way into a central “billing” system that tracks everything.  And report  it accurately Client by Client.   So that the salespeople can start negotiating their way to a bigger share of commissions - based on hard substantiated facts, and leaving nothing out.   

Many brokerage firms keep different activities in different systems.    Analysts use one tool to monitor phone calls with Clients. Roadshows are kept in another system.  Conferences another.   This is  not an obstacle - it can even be a good thing - and is not an excuse for inaction.   Because these different systems can be ported to a single billing and reporting system - without causing any change at all in how people work.

Investment banking revenues are of course a little slower right now for banks.   But they need to keep their conferences going because it drives their institutional trading business.  So they are looking to improve the economics.

One trend we are seeing come into play is charging non-clients to attend.  For years, banks didn’t mind too much who attended their conferences.   Notionally they were for Clients only, but they didn’t go to much effort to keep non-clients from attending.   Now they are looking to charge non- clients to come - thus making them a profit-center.  Non-clients may still not get 1-on-1 meetings.

We’ve had to do a fair bit of work on MeetMax to accommodate the  need for this.

Today, more and more companies organize Analyst Days as a way to provide a deeper perspective to Investors, in contrast to brokerage conferences, where presentation time is limited.

There is no excuse for not using the same sophisticated registration and event management systems as are used by brokerage firms.  Investors expect it.

What are the benefits of using a purpose-built registration tool for your analyst days or AGM? 

• Better Response 
• Save time 
• Survey your Investors at the same time
• Schedule management 1×1s 

A system Investors are familiar with and which saves them time in registering - such as TWSTEvent, which is used for most investment bank conferences - will yield a higher response from Investors.

You save time if all your response data is in one place, along with sign-ups to lunch and other events, and if you can check the data and download it from any PC.

Ask your registrants a few questions as they register, to get some pre-event feedback. Their attitude to the sector, awareness or response to recent announcements, aspects of your company they would like to hear more about. It takes very little time for the registrant, and you get valuable feedback to help design the event.

Do you give attendees an opportunity to meet senior management in 1×1 meetings? Then let the investors indicate their interests when they register.