Manage briefings and collaborations
Conferences and non-deal roadshows play a regular part in many an IR calendar but, when it comes to these events, it’s vital for IROs to ensure they are making the most of every opportunity to provide input into what’s said, to whom and in what format.
Andrew Hanson of Victrex advises that sales desk briefings are an under-rated way of getting good access to sell-side analysts at an investment case level. ‘All sell-side analysts will say their conference is the best,’ he comments. ‘We try to ensure non-deal roadshows are a collaboration – our ideas and theirs – with a willingness to target different geographies and funds. As a chemical manufacturer with tangible products, particularly those going into cars, smartphones and medical devices, we find site visits are extremely useful in providing an opportunity to understand how our products help contribute to a better society.’
Echoing this need for a two-way approach, Foresight Group’s Liz Scorer adds: ‘I think the best engagement stems from being open about your expectations. Too often, IR can be on the back foot, allowing the sell side to take the lead. We might not always get exactly what we want but, by being really clear about what we’d like, who we want to see and how we’d like to do it, we as IROs can have more of a say and get better value.
‘It’s also important to ensure your sell side is providing the latest updates to you. At a recent briefing we had an attendee we weren’t expecting and I had to go back to the sell side and reinforce that we need to know in advance if more people decide to join a meeting so management can assess whether it wants to add any particular input.’
For Timken's Neil Frohnapple, a former sell-side analyst who worked at multiple firms over his career, experience of both sides of the coin has given him valuable insight into the processes. ‘I learned that some sell-side firms are stronger and more effective in certain territories than others,’ he says.
The best engagement stems from being open about your expectations
‘Therefore, before allocating a non-deal roadshow to a sell-side analyst, I will have a candid conversation with him/her to find out where his/her sales teams are strongest outside of New York. Some sell-side firms are also willing to share a list of buy-side firms they have good relationships with in a given territory. This helps me ensure that partnering with the sell-side firm in a particular region would be a good fit.
‘For non-deal roadshows, I proactively send the sell-side analyst a target list of investors we would like to meet with before the sales team begins to confirm meetings. I specify the number of one-on-one meetings we need with long-only investors to ensure it is a productive day for our team and clearly communicate any other expectations.
‘The sales force will typically default to filling meetings with its highest-paying clients, which is why it is important to proactively provide a target list and set expectations. Finally, if the firm is working hard to fill the schedule with our targets (and is being successful), then we’re more willing to meet with a non-targeted fund to help the sell-side analyst better monetize the trip.’
