CFA Society seeks to cut
conflicts in investor conference
Society plans conference run by investors ‒ not brokers ‒ this May
In recent years, access to company management has become a highly prized
slice of portfolio managers’ commission pie.
As a result, a burgeoning number of sell-side conferences, aggressive
institutional sales desks and independent non-deal roadshow organizers have
competed fiercely with one another for IROs’ attention and a piece of
But the relationship is fraught with potential conflicts as conference
invitations and roadshow lineups are often dictated by the potential for
trading commission and corporate banking.
Activity has also tended to focus on the coasts and larger money centers,
ignoring investors in some middle-market metro areas.
Now the CFA Society of Minnesota is trying to shake up that equation.
‘If I look back, we used to have annual investor conferences sponsored by
Dain Rauscher and Piper Jaffray – they were big events locally,’ says Robert
Buss, current president of the
CFA Society of Minnesota, which boasts a membership of 1,200 investment
professionals across the upper Midwest.
InvestMNt to launch
Buss and other colleagues are stepping into the fray, launching
InvestMNt, which will
bring an estimated 250-300 local institutional investors and 40 public
companies together in a day-long conference this year on May 24.
Buss says he and other Twin Cities CFA Society officers decided to mount the
first ever society-sponsored investor conference as a way to cut out
sell-side conflicts and bring local public companies together with local
investors. ‘We felt uniquely positioned to do this,’ he states.
Most institutional investors want to meet a cross-section of companies and
managements, regardless of which firm does the most banking business or
generates the most trading commissions, Buss observes, but the old model of
broker-sponsored conferences and roadshows has failed to meet those needs.
‘This is a conference developed by investors, not a brokerage firm.
Invitations will not be limited to companies with investment banking
relationships or potential but instead to the broader Minnesota investment
community,’ the society proclaims in promoting the conference.
Meet companies close to home
InvestMNt is also a way for the financial community in the Twin Cities to
meet companies close to home, instead of both flying from Minneapolis to New
York to get together in a hotel conference room.
‘We’ve got a great list of public companies in Minnesota. Anything we can do
as a state to publicize that, we should,’ says Buss, who is also a managing
director at Disciplined Growth Investors, an independent investment adviser
in Minneapolis with $2 bn under management.
A decade ago, the Twin Cities enjoyed a reputation as a major US money
center – not as big as New York, Boston, Chicago, or San Francisco perhaps,
but certainly in the top 10.
Since 2000, consolidation within industry has diminished the region’s heft
and ranking, though not its reputation as a home for savvy investment
Minnesota is home to more than 490 public companies and boasts more Fortune
500 companies per capita than any other state, according to the society’s
The Twin Cities metro is also home to 56 institutional asset managers, hedge
funds and private equity firms managing an estimated $415 bn.
In addition, more than 90 corporate, non-profit and government pension plans
and endowments around the state manage another $210 bn in assets.
Reenergize sense of community
Another goal of InvestMNt is to reenergize Twin Cities’ financial
professionals’ sense of community, which has been beaten down in the recent
tough job market, Buss says.
According to the US Bureau of Labor Statistics, Twin Cities’ employment in
the securities and investment sector has dropped by 25 percent over the past
decade, from 20,000 to 15,000, with much of the decline following the recent
financial market meltdown and recession.
In the past year alone, employment in the sector has dropped by more than 5
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