Consider effective direct, virtual and in-person engagements
Given their different mindset from institutional investors, IROs need to consider the targeted tactics needed to maintain and develop their retail shareholders. Outlining his approach, Ian Selig of Safehold has implemented numerous strategies to build the firm’s retail investor base.
‘A crucial difference between retail and institutional outreach is the need to reach larger audiences,’ he explains. ‘At the heart of this for us is retail-specific conference attendance, sponsorships and keynotes from our senior management. Additionally, we’ve created our own initiative – the Retail Speaker Series – which entails traveling throughout the US and hosting lunch-and learn presentations with financial advisers, brokers and high-net-worth investors. We hold around 25 of these events annually, where a 20-minute presentation is typically followed by more than an hour of thoughtful and spirited Q&A.’
BASF’s Andrea Wentscher details the dedicated retail investor channels and events her firm uses, and points to the importance of virtual engagement post Covid-19: ‘We receive most inquiries from retail investors by phone or email so we have a central email address and a dedicated shareholder hotline. Contact details for all our IR team members are available online, so retail investors can reach any one of us with their questions.
‘Additionally, we provide private shareholders with insights about BASF at approximately 10 presentations annually. As a result, I have direct contact with around 2,000 existing or potential shareholders each year.’
A crucial difference between retail and institutional outreach is the need to reach larger audiences
As the pandemic made it impossible to hold in-person events, BASF decided to offer virtual formats, which received very positive feedback, Wentscher adds. ‘Both the number of participants and the number of questions increased over time,’ she points out. ‘Several retail investors prepared their questions in advance and the threshold for asking a question online was much lower than in physical meetings. This meant we received direct and open feedback on topics that are of interest to this target group.
‘We decided to continue offering virtual company presentations for retail investors after the pandemic. The format has proven itself over the last three years and offers a good complement to face-to-face meetings. Investors can get a direct update regardless of where they live or how mobile they are.’
We provide private shareholders with insights about BASF at approximately 10 presentations annually
Detailing a flaw in UK company law where his company is playing a key role in campaigning for change, M&S’ Fraser Ramzan says: ‘We set up our Private Shareholder Panel in 2016, giving retail investors access to the M&S board.
‘The panel comprises a selection of private investors who are invited to meet with the chairman and members of M&S’ senior management team regularly throughout the year, during which they hear business updates and provide their input on the business’ direction of travel.
‘But this cohort is currently limited to those retail shareholders who hold shares in their own names. We’d like to extend the right to participate to all shareholders – including those who hold in nominee accounts – but, due to outdated company law, M&S is currently restricted from engaging with this group of shareholders.
‘That’s why we’re proposing that digital is made allowable for all shareholder communication and an email address should be a prerequisite of purchasing equity.’
