LONDON - Here's a nifty holiday gift for money managers, trustees, brokers, investor relations specialists and the odd takeover artist: a subscription to Citywatch Ltd.'s U.K. share ownership services.
London-based Citywatch experts have compiled a massive resource of institutional ownership of Financial Times-Stock Exchange 100 stocks that can reveal who is buying or selling which shares and how money managers are positioning themselves in the market, by sector and by individual stocks.
For example, Citywatch data can show the top 10 institutional buyers of U.K. electricity industry stocks - an industry that has been swept by takeover mania in recent months.
Data show that, as of Sept. 30, Prudential Portfolio Managers Ltd., London, has 5.01% of its U.K. equity holdings in electricity stocks, followed by Sepon, the account reflecting total positions of London Stock Exchange marketmakers, at 2.32%, and Standard Life Investment Management at 2.24%. (Citywatch officials declined to disclose holdings in individual stocks.)
In addition, Citywatch is developing profiles of the top 100 U.K. money managers that illustrate each manager's U.K. holdings, weighted by industry and by market capitalization.
The data can be used for a variety of uses:
Money managers can see what other investment houses are doing in the market, whether competitors are favoring, say, electronics stocks or selling consumer durables.
Trustees evaluating prospective money managers can judge whether managers actually do what they say they do. (Data might be blurred by combinations of discretionary, non-discretionary, unit trust or investment trust holdings, although many of these irrelevant accounts can be stripped out.)
Brokers can target potential buyers, seeing who is keen on certain industries or stocks, and whether they favor large-, medium-, small-capitalization or even fledgling stocks.
Investor relations experts can identify who is hot on their company's stock, and perhaps more importantly, who is not. For example, they can see whether a manager is buying other stocks in their sector, but not theirs.
Potential acquirers of U.K. corporations can determine who the shareholders are - including both the beneficial owners and their external money managers.
Financial institutions looking to buy U.K. money managers can look through to potential targets' U.K. equity investments.
While similar data on U.S. stock holdings long has been available through Securities and Exchange Commission filings made by institutional investors, what Citywatch experts have done in the United Kingdom takes more painstaking research.
"It's an enormous task, which is why it never has been done adequately before," said Mark O'Hare, director.
During the past two years, Citywatch employees have combed through the shareholder registers of each FT-SE 100 company, culling the names of each owner.
But most institutional shares are held in nominee name, thus shedding little light as to who the real owner is. A company such as British Telecommunications PLC has nearly 2 million shareholders, including a few thousand nominees, Mr. O'Hare explained.
The key to unlocking the data comes from labor-intensive research. What Citywatch has done is go, company by company, through other company records that identify the true owners.
Thus, Citywatch records divulge that Midland Bank Trust Co. Account 19736940 actually is the Bass PLC pension fund and Legal & General Investment Management Ltd. is the manager of that portfolio.
(Where Citywatch does run into some difficulty is with American depository receipts, because the underlying ownership usually is not available.)
Subscribers to Citywatch's basic "Fund Manager Database" can call up a stock, a sector or a manager and determine ownership of industries or stocks. The service reveals current and month-old holdings. The basic service costs 2,750 ($4,345) annually.
To reveal longer-term buying and selling trends, Citywatch produces a "Tracker Database," which shows manager holdings over a rolling 12-month period. The research firm also will tailor analysis for individual clients.
In addition, it produces the money manager profiles, which reveal U.K. holdings by leading British money managers.
The service reveals managers' biases in terms of sector and market capitalization. For example, it can pick out which managers are buying into the London Stock Exchange's new Alternative Investment market for small-cap stocks - a valuable product for brokers trying to market these shares. Citywatch already has signed up the U.K.'s top 10 brokerage firms as clients. The manager profiles also examine how much each manager's stock picks deviate from the index and how much the manager turns over U.K. stocks.
The service does not, however, include a manager's non-U.K., property and cash holdings, and whether shifts in asset allocation or infusions of cash have affected turnover. Thus, turnover ratios can be somewhat misleading, and it is impossible to see what a typical U.K. global balanced manager's portfolio looks like. One can, however, gain insight into a U.K. equity specialist brief.
Data is available in disk form and operates on Microsoft Windows.