Both the sell-side and buy-side of the capital markets have suffered significant disruption in the past decade. For the sell-side, regulations like Sarbanes-Oxley and MIFID II have fundamentally changed their access to and relationship with the buy-side. For the buy-side, the emergence of low fee passive exchange traded funds, increasing regulations, and rising compliance costs have shifted the industry away from active fund management.
These changes have led to large scale layoffs of active fund managers, equity analysts, sales desk professionals, and investment bankers. The professionals left standing must now cover a much larger constellation of industries and companies. In this crowded, saturated market, even the most compelling investment story can fall flat if it’s not reaching the right audience.
Unfortunately, many management teams squander time and resources chasing meetings with unqualified investors and grifters posing as qualified sell-side professionals. Not only does this waste time and resources while generating little traction, it can also push management teams towards decisions that fail to align with their long-term shareholder base.
Without a precise targeting and engagement strategy, companies risk weak exposure and subsequent lack of interest from both the buy-side and the sell-side. On the buy-side, this means low-quality institutional ownership, and a fragmented shareholder register that undermines valuation and stability. On the sell-side, it means a lack of broker dealer support, an essential component to a public company’s capital markets success.
