How meetings influence investment decisions
It takes an average of three meetings with a company before an investor takes a position. Regionally, there is little difference in how many meetings it takes before an investor takes a position, with it taking slightly more meetings on average among North American companies than it does among European or Asian companies.
Similarly, there is little difference according to company size: small-cap firms have an average of 2.7 meetings with investors before they take a position while large and mid-caps have an average of 3.1 meetings.
Engagement with management is the most-mentioned factor for investors in how many meetings it takes for them to reach an investment decision. The clarity and quality of reporting and good general IR can also make it easier for investors and reduce the time needed on meetings. The complexity of a business and its strategy, as well as the industry it is in, are further factors mentioned by some investors.
A majority of more than six in 10 IROs say the number of meetings it takes before an investor assumes a position in their company is not affected by whether the meetings are in person or virtual. But more than a third say it takes more virtual meetings for an investor to take a position, compared with just 5 percent who say it takes fewer virtual meetings.
The view that more virtual meetings are needed before an investor takes a position is most common among European IROs and least common among North American IROs, where just over a quarter hold this view. According to company size, this view is most held by IROs at small-cap firms and least held among mega-caps.
When asked to comment on their view, IROs who think the number of meetings is unaffected by the format they are in cite the efficiency of virtual meetings and note that other factors are more important than the meeting format, such as the quality of reporting. IROs who say it takes more virtual meetings for an investor to take a position often mention that virtual meetings are easier to arrange so investors can be more casual in their approach to them. In-person meetings can be more in-depth and trust between company and investor can be established more quickly.
No, it takes the same number of virtual as in-person meetings
Yes, more virtual than in-person meetings are needed
The views of investors in taking a position broadly match the experiences of IROs. While the majority of investors take the same number of virtual as in-person meetings before making an investment decision, twice as many say they need more virtual meetings before they are ready to take a position as say they need fewer meetings.
There is little difference between the buy side and the sell side on this issue. Among European investors there is no net difference in whether they need more or fewer virtual meetings before making an investment decision. More than four in 10 Asian investors say they need more virtual than in-person meetings before taking a position.
Investors unaffected by the format of meetings in their investment decisions give many of the same reasons as IROs. These investors see the information received and the content of a meeting as more relevant to their investment decisions than the style of a meeting, while many see that technology has made virtual meetings as effective as in-person meetings.
Investors that require more virtual meetings before making an investment decision often say it is easier to get a read on management with in-person meetings and that they can become more comfortable and more confident with a company in this format.
No, it takes me the same number of virtual as in-person meetings before I make an investment decision
Yes, I need fewer virtual than in-person meetings before I make an investment decision
Yes, I need more virtual than in-person meetings before I make an investment decision
