Lloyd Bevan takes stock of roadshows, site visits, investor days and investor conferences after years of mandatory virtual engagements and discovers how IR events will evolve
The past 18 months have been a critical time for investor events. Roadshows, investor days, site visits and investor conferences have all been in a state of flux as they transition from being held almost entirely virtually during the Covid-19 pandemic to seeing a gradual return to in-person events as social restrictions have been lifted.
IR Magazine will shortly publish a research report examining investor event activity from Q3 2021 up to the end of 2022. As well as monitoring the number of in-person and virtual events held in this time, the report looks at the attitudes of IROs and investors toward these formats and what these mean for such events in the foreseeable future.
The report finds that around a third of roadshows, investor conferences and investor days from Q3 2021 to Q3 2022 were held in person. This increased over the last six months of 2022 to the point where around half of investor days and conferences were in-person events and more than four in 10 roadshows involved going back out on the road.
Satisfaction guaranteed?Given a sufficiently lengthy period in which IROs and investors have been experiencing both in-person and virtual formats at the same time, they have been able to evaluate both formats side by side, assessing their satisfaction with each in real-time comparison.
As part of the research for the report, IR Magazine asked IR professionals and investors at the end of last year to rate their satisfaction with in-person and virtual formats for each event type. For each event, both IROs and investors express greater satisfaction with in-person than virtual formats. For the most part, the gap in satisfaction is clear, the exception being investor views on investor conferences, where there is a marginal gap in satisfaction between the two formats.
Julia Vater Fernandez is IR director at VTEX, an NYSE-listed digital commerce company mainly operating in Latin American markets. ‘For me, the findings are not shocking,’ she says. ‘In-person events are critical in building stronger relationships between investors and companies. The human factor is an essential part of the decision-making process and in-person interactions offer a level of engagement that virtual meetings simply can’t match. While the virtual format can be a helpful tool for investor relations, it can’t fully convey the cultural messages and body language that are key indicators of investor sentiment.’
Hethen Hira, head of IR at South Africa-based Pan African Resources, agrees. ‘IR professionals and investors can get a better understanding of the caliber of management, and knowledge of the business comes through the body language of both sides, especially when meeting investors for the first time,’ he points out. Hira specifically says of investor conferences: ‘One is uncertain of the level of interest or attention paid during large-platform virtual conferences.’
During the Covid-19 pandemic, both IROs and investors often said this informality and ability to get non-verbal readings were key factors they missed with virtual-only engagement. This view has been reaffirmed with the return to in-person events.
Mike Wang, IR manager at Taiwanese technology company BizLink, says virtual events were the only choice during the Covid-19 years of 2020-2022. ‘But while virtual events saved on costs and time, an essential piece of the relationship between IROs and investors was missing,’ he says. ‘My recent attendance at in-person events supports the view that the preferred format is still a face-to-face meeting where hands can be shaken, reactions can be read and casual conversation can be started instead of the business-only attitude prevalent in virtual events.’
Value of virtualWhile participants are more satisfied with in-person events, this does not mean they are unsatisfied with virtual events. In specific instances, IROs can see the value of virtual over in-person events and have a nuanced view in comparing the different formats.
Thelke Gerdes, head of IR at Signify, says her Dutch lighting company resumed physical meetings in 2022 and their experience has so far been mixed. ‘On the one hand, it is great to see investors again in person and I believe broker conferences, site visits and capital markets days will be most beneficial in a physical format,’ she says. ‘On the other hand, setting up roadshows post-Covid has become a lot more complex. Many investors are now working remotely, particularly on Mondays and Fridays, limiting the number of available days for roadshows.’
Not only does Gerdes find that in-person roadshows are now harder to plan, but she also finds they have seen a shift away from the traditional financial centers. ‘Virtual meetings have given us the opportunity to cover investors in regions our management does not visit,’ she details. ‘In future, we will organize physical roadshows only if we can set up a full day of quality meetings.’
Back to the future of eventsThe common position is, therefore, one where participants have a preference for in-person events but still see value in the virtual format. Given this, IR Magazine asked IROs and investors to predict what they thought the future ratio of in-person to virtual events would be.
There is a clear majority who expect future site visits to be almost entirely in person. For other investor events the view, to varying degrees, is that there will be more in-person than virtual events. The median view for IROs is that roadshows, investor days and conferences will be 65 percent to 90 percent in person.
For investors, the central view is that there will be a reasonable mix of both, although more investors think future events will be mainly in person than think they will be mainly virtual.
‘I’m aligned with the discovery,’ Vater Fernandez states. ‘Virtual events have proven to be highly effective for investor days. They provide more extensive reach and significantly lower costs related to such events. In terms of roadshows, the nature of the event will dictate whether it is held in person or virtually. Site visits are expected to return to pre-pandemic levels as they allow investors to feel the environment of the premises and gather more soft data that cannot be obtained through virtual interactions.’
Hira explains why he thinks there will be a space for virtual in future. ‘The results fit in with our experiences and the virtual option is relevant to have, especially where large travel distances may be a deterrent,’ he says. ‘Having a virtual platform could at least provide some basis for information and detailed in-person follow-up should the investment case prove worthwhile.’
Jay Roueche, treasurer and vice president of IR at Flowserve, the Texas-based industrial machinery manufacturer, sets out why he thinks there will be a more equal mix. ‘As a company that gets invited to more than a dozen investor conferences a year, I suspect it will be closer to 50/50 in person versus virtual,’ he predicts. ‘For second-tier conferences or hard-to-reach locations for non-deal roadshows, I think hosts will have a better chance of getting company participation by going virtual. But for the best conferences, site visits, investor days and dense non-deal roadshow locations, in person is the way to go.’
Site visits are the main event type where there is a clear enthusiasm for a return to the pre-pandemic, in-person norm. But one investor we spoke to, Juha Varis, senior portfolio manager at Finland-based S-Bank, makes the case for keeping more virtual site visits.
‘I think in five years’ time they might be the new norm,’ he says. ‘Of course, they want to avoid showing any secrets/details in the production process to outsiders, but there are still clever ways to do it. Just walking around a machine hall does not make you any wiser, so using two days to travel and see a factory many times is mainly a waste of time.’
The effects of changeWhile Varis’ view bucks the trend, it shows how evaluation of the in person versus virtual mix can produce a reassessment of the nature of investor events, which goes beyond the format in which they are held.
Gerdes outlines her evaluation of these events: ‘Roadshows will stay – but it is possible that brokers will provide less support and that companies will organize them on their own. Conferences will shine given the increasing complexity of organizing roadshows in a post-Covid world. Investor days are here to stay, but I’m not sure whether they will be mostly virtual, in person or both. They are a great platform for companies to present their IR strategy. Site visits will also stay; the format and experience itself cannot be replaced.’
Vater Fernandez identifies a broader knock-on effect of virtual engagement: ‘The virtual format has allowed for the maximization of investor reach but hasn’t replaced in-person events. Instead, it has replaced traditional telephone calls, where platforms like Zoom or Teams provide a better mimic of in-person interaction, helping build a stronger ongoing relationship.’
Roueche says new arrangements will have a positive effect on senior management involvement. ‘I believe the combination of virtual and in person will result in much more C-suite participation,’ he says. ‘For the second-tier events, eliminating travel means it’s much easier for the C-suite to still join in virtually.’
One way in which virtual and in-person formats co-existing can affect the landscape is the formation of a hybrid style, where one single event has both in-person and virtual elements to it, an approach certainly favored by Wang.
‘Future events will indeed be a mix of in person and virtual, and perhaps both can be offered from time to time for a select event or kind of event,’ he says. ‘I have not yet seen this, but it is possible that given the differences in preferences and schedules, offering such an option will begin to show up.’ This is part of the recognition that ‘virtual is here to stay,’ he adds.
Despite the preference for in-person events, this is welcomed by IROs and investors alike.
‘After almost three years of virtual meetings, I can confirm that live meetings are better,’ Varis says. ‘But we don't need to go back to ‘the good old times’ – not every meeting has to be live. I think a live meeting once a year and the rest held virtually could be a new gold standard.’
Vater Fernandez adds: ‘Both virtual and in-person events have pros and cons. They should be carefully considered based on the specific needs and goals of the event but most interactions will go back to being in person.’
IR Magazine's Investor Events report will be published in May
