Campaigners are increasingly targeting finance. And rightly so – the $millions of capital that can be shifted around at the nod of an analyst provide quite a hefty lever for hitting a company where it hurts: on the bottom line. Here, from Corporate Watch’s finance division somewhere in the sewers beneath Threadneedle Street, we bring you a few tips on how to find out who’s who in a company’s financial support structure.(a)Shareholders
Over two thirds of large British companies are owned by ‘institutional investors’: pension funds, insurance companies, unit and investment trusts. However, you may find a major shareholder who is reasonably symp-athetic to your arguments – such as a trade union pension scheme, or the Church.
For the top shareholders (holding above 3%), use a business directory – such as the MacMillan Stock Exchange Yearbook, the FT Major Companies Guide (and Smaller Companies Guide) or the HemScott Company Guide - in the business or reference section of your local library. Failing that, you could use City Business Library on London Wall (tel. 0171 638 8215). Once you’ve got their names, get addresses from the phone book – if they’ve got a UK office, it’ll almost certainly be in London.
For a FULL LIST of shareholders, you’ll need to use Companies House, at 21 Bloomsbury St, London WC1, or in Birmingham, Glasgow, Leeds, Manchester, Cardiff or Edinburgh (tel. 01222 380 801). For £3.50 you can get a full search on a company, if you wait overnight. The results will be on microfiche - most libraries have reader machines.
Often the real owner of shares is 'represented' by a fund manager or "Nominee", but each nominee entry will have a code for the client before the number of shares. You can look them up in the Index of Nominees and Beneficial Owners, which will tell you who each code stands for. It's published by Fulcrum Research (tel. 0171 253 0353) and costs about £300 – ask your library to order it (see CW7).
It is more difficult the other way round, ie getting details of an institution's investments. The big companies usually won’t tell you their investments. However, many big investment companies have unit trusts. Every three months, fund managers produce a report on their investments and if you phone an investment company and ask about one of their trusts they will send you a copy of this report.
This report may give a picture of how the other trusts within that company are invested.
(b) Analysts
Analysts play one of the most important roles in the City. They advise investors on whether to buy or sell a company.
Fund managers will shift vast blocks of cash into or out of a company on their say so. So companies are keen to keep a good relationship with their analysts, and will invite them to presentations all over the world where they will explain their strategy. If campaigners can persuade analysts to recommend a ‘sell’ on a particular company, it can give quite a big kick.
Companies won't tend to tell you who their analysts are. From early next year, you'll be able to look in 'A citizen's guide to lobbying financial markets' (details below), which will list the analysts for all the baddest oil, mining, biotech etc. companies.
Alternatively, try the Financial Times: analysts are often quoted on the back page of the ‘Companies & Markets’ section. Or search for the company’s name, along with ‘companies report’ (the name of the section) or 'analyst', on the FT CD-ROM at City Business Library, or on www.ft.com - it’s free to search the archive on the web (which covers lots of papers, not just he FT) and get lists of headlines and dates. You have to pay to read the full article, or you can go find them in the library instead.
Extel Survey run a competition each year (latest one was 9th July 1999) for the best analysts in the City, sector by sector. Entrants and winners are worth noting, as they tend to be the most important and influential people. The survey is expensive, but is held in the British Library (note you will have to apply to become a reader; you will also have to order the book a few days before you want to read it – details on 0171 412 7000), and is sometimes referred to in the FT: do a search for "Extel Survey".
c) Others
Major companies have their own financial staff – including lawyers, accountants, brokers etc – but they get advice, consultancy and project management from the many specialist service companies in the City who offer expertise in their field.
Perhaps most important are the bankers (who hold the company’s bank account, and provide short-term finance), brokers (who monitor and deal in shares) and financial advisors (merchant bankers). You can find out who's providing what services for what companies by looking in the directories: MacMillan’s, FT Companies Guide and Hemscott (above).
This is an excerpt from Squaring up to the Square Mile – see box on p.25. See also 'A Citizens' Guide to Lobbying Financial Markets', by Nick Hildyard, Mark Mansley and Monique Baker, available from Corner House (see contacts page), from early 2000.