How Under-Covered Public Companies Can Attract Institutional Investors

The Analyst Coverage Crisis

Institutional investors have historically relied on sell-side analyst research to identify investment opportunities. The typical process was straightforward: an analyst publishes an initiation report, the buy-side reads it, and if the thesis is compelling, the portfolio manager takes a position. This system worked when banks funded research through trading commissions and IPO allocations.

That model broke in January 2018 when the European Union's Markets in Financial Instruments Directive II (MiFID II) took effect. The regulation required asset managers to unbundle research costs from trading commissions, forcing buy-side firms to pay explicitly for analyst research for the first time. The impact was immediate and severe.

According to research published by the National Bureau of Economic Research, the average number of analysts covering European-listed companies dropped by approximately 12% in the two years following MiFID II implementation. While the regulation technically applied only to European markets, its effects were global. Major investment banks reduced research headcount across all regions, and the firms that remained concentrated their coverage on the largest, most liquid stocks — where trading commissions could still justify the cost of research production.

The companies left behind are not small or obscure. Many are publicly traded firms with market capitalizations exceeding $10 billion that simply fall outside the top-priority coverage universe of the remaining sell-side analysts. Without analyst coverage, these companies become invisible to a large segment of institutional capital.

The Cost of Being Under-Covered

The consequences of lost analyst coverage extend beyond reduced visibility. Academic research consistently shows a measurable relationship between analyst coverage and equity valuation. Companies with fewer covering analysts tend to exhibit:

• Lower trading volumes — reduced institutional awareness translates directly into fewer buyers and sellers, widening bid-ask spreads and increasing the cost of capital.
• Valuation discounts — studies from the CFA Institute suggest that stocks losing analyst coverage experience an average price decline of 3-5% in the following quarter, independent of fundamental performance.
• Reduced institutional ownership — many institutional mandates require minimum analyst coverage thresholds before a stock can enter the investable universe. No coverage means automatic exclusion from these portfolios.
• Difficulty raising capital — secondary offerings and debt issuances rely on institutional interest, which depends on the information ecosystem that analysts provide.

For a CFO or head of investor relations at an under-covered company, these are not abstract concerns. They represent real erosion of shareholder value and competitive disadvantage in the capital markets.

Strategy 1: Non-Deal Roadshows

Non-deal roadshows (NDRs) are meetings between company management and institutional investors that occur outside the context of a securities offering. Unlike IPO or follow-on roadshows, NDRs focus on educating investors about the company's business model, competitive position, and long-term strategy.

Effective NDR programs share several characteristics. They target investors whose mandates align with the company's sector, market cap, and investment profile. They are scheduled consistently — quarterly or semi-annually — to build familiarity over time. And they provide substantive access to C-suite executives, not just investor relations professionals, because portfolio managers want to assess management quality firsthand.

The challenge is access. Most under-covered companies lack the sell-side relationships to arrange institutional meetings efficiently. Without a broker organizing the schedule, management teams end up cold-calling portfolio managers — an approach with predictably low response rates.

Strategy 2: Investor Days

Investor days bring multiple institutional investors together for a half-day or full-day deep dive into the company's operations, financials, and strategy. They are particularly effective for companies with complex business models that are difficult to communicate in a 30-minute one-on-one meeting.

A well-executed investor day typically includes presentations from the CEO, CFO, and heads of key business units; facility tours or product demonstrations where applicable; and Q&A sessions that allow investors to probe specific areas of interest. The format signals management confidence and transparency — qualities that institutional investors value highly.

The primary obstacle is attendance. Institutional investors receive hundreds of event invitations per year and attend only a fraction. Companies need a compelling reason for attendance, which often comes down to one question: who else is attending? The presence of well-known portfolio managers or analysts creates a network effect that draws additional participants.

Strategy 3: Financial Media Visibility

Financial media coverage serves a dual function for under-covered companies. First, it raises awareness among retail and institutional investors who may not encounter the company through traditional analyst channels. Second, it creates credibility signals that make institutional investors more receptive to direct outreach.

A feature in Forbes, a Bloomberg interview, or a Wall Street Journal mention creates a reference point that portfolio managers recognize. When a company's CEO appears in a respected financial publication discussing industry trends or company strategy, it establishes the executive as a thought leader and the company as one worth investigating.

The connection between media coverage and institutional interest is well-documented. Research from the University of Chicago found that companies receiving positive media coverage experienced increased institutional ownership in subsequent quarters, particularly among institutions that rely on media as a screening tool for potential investments.

Strategy 4: Direct Institutional Engagement

The most direct path to institutional investment is also the most resource-intensive: building relationships with portfolio managers and research analysts one at a time. This approach works best when combined with the strategies above, since media coverage and investor events create natural conversation starters.

Effective institutional engagement requires understanding how different types of investors make decisions. Value investors want detailed financial analysis and evidence of margin of safety. Growth investors want addressable market data and evidence of execution. ESG-focused investors want sustainability metrics and governance data. A one-size-fits-all investor deck fails because it addresses none of these audiences well.

How Crosswell Capital's Three-Party Model Addresses the Gap

Traditional investor relations firms operate in silos: one firm handles media, another handles institutional marketing, and a third might coordinate investor events. This fragmented approach creates redundancy and misses the synergies between media coverage, institutional engagement, and advisor networks.

Crosswell Capital connects all three parties in a single engagement. For under-covered public companies, our model works as follows:

• Registered investment advisor introductions — our network of 35+ RIAs managing $100M+ in assets provides direct access to institutional-grade investors who are actively seeking investment opportunities outside the mainstream coverage universe.
• Financial media placement — our connections with 55+ Forbes finance contributors and other financial journalists facilitate earned media coverage that builds credibility and attracts institutional attention.
• Investor event coordination — we organize targeted investor days and NDR schedules that bring together company management, money managers, and financial media in settings designed to create lasting relationships.

The three elements reinforce each other. Media coverage makes institutional investors more receptive to meetings. Institutional interest validates the company's story for journalists. Advisor network access provides a steady pipeline of qualified investors who understand the company's value proposition.

Learn more about our investor relations advisory for public companies.