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Study: German investors are expanding their involvement in medium-sized listed companies
The study series, published annually since 2014 based on data as of September 30, analyzes the shareholder structures of the companies that are listed in the three German indices MDAX, SDAX and TecDAX and thus represents "German listed medium-sized companies." According to the results, investors from Germany held 19% of the free float shareholdings of all MDAX companies (previous year: 17%) as of the reporting date in 2016. Domestic investors managed to expand their TecDAX share by one percentage point compared to the previous year to 29%. Despite the increased involvement of German investors in the MDAX and TecDAX, North American investors are still ranked first with 31% in both indices. The SDAX paints a similar picture: German investors have massively expanded their involvement by increasing their index-adjusted assets by +34% to currently €4.1 billion, increasing their share of institutional free float by three percentage points to 28%. At the same time, investors based in North America ranked first (30%) while Germans and North Americans shared first place with investors from the UK and Ireland last year.
The study that has now been presented is the fourth investigation from the series "Who owns listed medium-sized companies?" and updates the analysis from January 2016 to include the latest available data.
The main results at a glance:
» With respect to institutional free float in the MDAX, German investors rank third with a share of 19% as of September 30, 2016, after North American (31%) and British & Irish (22%) investors. In 2014, the gap in the MDAX between German institutional investors and the second-placed British and Irish was still eight percentage points (17% vs. 25%). In 2015, this gap had narrowed to six percentage points (17% vs. 23%) and is now only three percentage points.
» Overall, MDAX companies recorded a decline in assets invested by institutional investors of approximately -€9.0 billion. Only investors based in Germany and Scandinavia expanded their positions (approx. +€372 million and approx. +€365 million respectively). In the SDAX and TecDAX, inflows in total invested assets were observed (around +€2.2 billion or around +€1.0 billion, all figures adjusted for the respective index performance).
» As in the previous year, the Norwegian state, with nominal invested assets of around €5.4 billion across all three indices, is the largest individual investor, although only 1.1% of the total portfolio of Norges Bank is invested in the German medium-sized indices. The MDAX accounts for the lion’s share at approximately €3.9 billion. In the case of SDAX and TecDAX shares, the Norwegian state fund is also one of the three largest investors, with approximately €465 million and approximately €974 million respectively.
» Index funds, which represent the third most important investment style across all three indices, have now experienced a negative development following strong growth in previous years. Although only one percentage point of the institutional free float share was lost in the TecDAX, the assets adjusted for index performance decreased by around €-1.7 billion across all three indices, which corresponds to a drop of nearly -9% compared to the previous year.
» With respect to the shares in the institutional free float of growth- and value-oriented investors, the latter managed to almost exclusively expand their institutional free float across all three indices over the course of the year, while the shares of growth-oriented investors remained largely stagnant or even declined. If we look at the invested assets adjusted for the respective index performance, the investment volume of value-oriented investors stagnated (-0.4%). In contrast to growth-oriented investors, a cumulative decline of around -€3.4 billion (-6%) was registered across all indices.
» As in previous years, London, Frankfurt, Paris and New York were the dominant top quartet of the most important roadshow targets based on the investment volumes of the fund companies on site. None of the top 10 roadshow destinations of the three indices was located outside Europe or North America.
cometis AG CEO Michael Diegelmann comments: "We are seeing a clear shift from Anglo-Saxon to German investors in German medium-sized listed companies. Nevertheless, the continued impressive international diversification of the shareholder structures of the companies we analyzed shows the high interest of capital market participants in companies based here. A targeted and active approach of investors as part of 360-degree investor relations work is a very important building block in actively influencing the composition of the shareholder structure."
Andreas Posavac, Managing Director of M&A & Governance Advisory Europe at Ipreo, summarizes "The strengthening of local investors in medium-sized companies is a development that should play a role in the investor relations strategy, especially with respect to Brexit. We view the active approach of investors and the reaction to the developments on the global equities market to be the most important steps towards risk management and fair valuation; we therefore advise issuers to regard these developments as an opportunity rather than an extra requirement."
The detailed study results are available for download free of charge on cometis AG’s website at www.cometis.de. Further explanations on the study can be obtained from cometis AG and Ipreo Ltd by contacting the respective individuals listed below.
Since 2000 cometis AG is active as a consultancy focusing on strategic and operational financial communications and investor relations. Our team of more than 25 employees consists of economists, journalists, business lawyers and designers. Thereby our mainly medium-sized clients profit from our profound knowledge gained in more than 500 capital market projects. In the past years we have successfully conducted more than 25 IPOs. Besides, we have steered the communication of our clients in numerous corporate finance and M&A transactions as well as particular situations. Our business activities include the development of IR and corporate communications strategy, the creation of press releases, annual reports, presentations or websites, as well as management coaching in preparation for interviews with journalists, analysts and investors. Due to our membership in the "Public Relations Global Network" (PRGN), which unites more than 40 owner-managed PR and IR consultancies across all continents, we are able to offer our services worldwide.
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