The battle for book-building 2.0
Investor Access, the electronic book-building initiative run by US-based fintech Ipreo, celebrated its first year of operation in early November with some healthy usage statistics.
For instance, 27 banks were publishing deals on the system by October, up from 11 in January, and more than 90 investor organizations have placed orders on the platform. It now claims involvement in 80% of euro issuance and 65% of sterling issuance. Impressive stuff. There is just one problem: the US. There is a glaring absence of large US players in its roster of participating banks, spearheaded by HSBC and BNP Paribas.
Investor Access has taken off far more quickly in Europe, where the market is much more fragmented and automation can deliver big efficiencies. In the US, progress has been slow.
This is something that cannot be ignored, given that market’s domination of fee pool and issuance volumes. In the first half of 2017, the US accounted for 40% of global debt capital markets volume and 58% of global DCM underwriting fee revenue.
It is not just the very lucrative nature of the bond underwriting status quo at US dealers that is a hurdle for Investor Access.