The Benefits of Access: Evidence from Private Meetings with Portfolio Firms

We analyze over 4,700 private meetings between a large active asset manager and portfolio firms, unobservable to outsiders. These meetings are conducted by both fund managers and governance specialists; both generate insights and information advantages that influence trading decisions of fund managers. Meetings contain soft rather than hard information, and fund managers trade on and around meeting dates, generating excess returns. Trading is more pronounced for i) high level meetings, (ii) meetings with very positive or negative tone, (iii) meetings rated as unusually good or bad, and (iv) meetings changing internal recommendations to buy, hold or sell. Overall, meetings generate profitable trading decisions.