Financial institutions, private acquisition of corporate information, and fund management

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Abstract
The article describes how 27 large UK financial institutions (FIs) sought to acquire an information and influence advantage from the relationships they enjoyed with investee companies in their portfolio. The financial institutions invested much time and effort cultivating these links and contacts. The primary aim of this relationship investment decision was to produce added value in stock selection and asset allocation decisions. The resulting fund performance was the means for inancial institutions to satisfy a fiduciary duty to supply their clients with their preferred mix of return, diversification and liquidity. This problem area is investigated by using financial institutional case data to describe FI behaviour when interacting with their relationship investee companies. The article ends by analysing the case data and case structures through the perspective of inance theory.