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IR and communications<br />
intelligence and surveillance information as<br />
follows:<br />
• Ownership trends are accurate (i.e.,<br />
firms reported as purchasing shares are<br />
in fact buying the stock).<br />
• Ownership positions are within a 1/2<br />
range of 20% (i.e., a firm being reported<br />
as buying 900,000 shares when it<br />
actually bought 800,000 shares is<br />
acceptable).<br />
• There is transparency and a<br />
conviction level with each position.<br />
A credible market intelligence and<br />
surveillance provider will give detailed<br />
background on material position<br />
changes in order for the issuer to<br />
understand its accuracy, as ownership<br />
information is often shared with<br />
senior management teams and the<br />
board of directors.<br />
Identifying ownership changes,<br />
while important, is just one aspect of<br />
a market intelligence and surveillance<br />
program. The provider should be the<br />
company’s connection to the capital<br />
markets and act as an extension of its<br />
investor relations team. Feedback from<br />
market participants, such as traders,<br />
sell-side analysts and buy-side portfolio<br />
managers and analysts, should be<br />
expected. This feedback should assist<br />
the company and its senior management<br />
team in understanding the primary<br />
drivers behind both short-term trading<br />
and longer-term institutional ownership<br />
trends. Additionally, a credible market<br />
intelligence and surveillance provider<br />
has a broad client base, a deep talent pool<br />
and access to a variety of data sources.<br />
Combined, this exposure, expertise and<br />
access to data will allow a company to<br />
leverage the team to understand and<br />
implement best practices across a variety<br />
of investor relations functions, such as<br />
internal and external communications as<br />
well as investor outreach, and will allow it<br />
to be at the forefront of market issues and<br />
developments.<br />
5.6 Investor targeting and outreach<br />
Ipreo<br />
Knowing the owners of the stock and<br />
their motivations, as described in the<br />
market intelligence and surveillance<br />
section, are both fundamental to investor<br />
relations. Just as fundamental to investor<br />
relations is the strategy and execution<br />
of outreach to prospective institutional<br />
shareholders and the assessment of the<br />
investment opportunity and portfolio risk<br />
that is inherent in the company’s current<br />
institutional shareholder base. Investment<br />
managers continue to place a high level<br />
of importance on gaining access to the<br />
senior management teams of publicly<br />
listed companies. These interactions play<br />
a critical role in the research process that<br />
could lead to investment (or divestment)<br />
in the stock or peer companies. Given<br />
the importance of these interactions to<br />
the investment community, the investor<br />
relations officer is often deluged with<br />
meeting requests directly from investment<br />
managers or through sell-side brokerage<br />
firms, which provide “corporate access” as a<br />
key service to its investment management<br />
clients. Of course, the investor relations<br />
officer’s time and the senior management<br />
team’s time are not unlimited (a business<br />
needs to be run!) and not all investment<br />
managers are equally worthy of time and<br />
attention.<br />
An effective investor-targeting program<br />
requires five processes:<br />
1. understanding the company as an<br />
investment;<br />
2. evaluating the current shareholder base;<br />
3. identifying potential investors;<br />
4. communicating with current and<br />
potential investors; and<br />
5. monitoring and measuring<br />
effectiveness of outreach.<br />
Each of these is an ongoing process,<br />
and an effective provider will be able to<br />
contribute to the actions the IR team<br />
conducts in each step, as well as help to<br />
optimize the usage of scarce resources<br />
in maintaining communication with the<br />
investment community. The investor<br />
relations officer should look for a<br />
provider of services that can contribute<br />
by providing both information and<br />
advice at each step:<br />
1. Understand the company as an<br />
investment: the flexibility to view the<br />
company’s investment story in the<br />
same context as potential investors<br />
managing diverse strategies—relative<br />
to industry-specific fundamentals,<br />
regional focus or even a global<br />
perspective—as well as transparency<br />
on the inputs to the process.<br />
2. Evaluate the current shareholder base:<br />
helping to identify risk within existing<br />
positions, as well as opportunity<br />
available from current shareholders<br />
(either the ability to expand positions<br />
in existing portfolios or the ability to<br />
build new positions in new portfolios<br />
managed by the same firm).<br />
3. Identify potential investors: delivering<br />
both qualitative and quantitative<br />
information describing not just<br />
the match between the company’s<br />
investment story and the portfolio but<br />
also the communication conduits with<br />
the firm (who are the decision makers<br />
and how to approach them).<br />
4. Communicate with current and<br />
potential investors: offering justin-time<br />
information to support the<br />
company’s interactions in any format<br />
(conferences, nondeal roadshows,<br />
analyst days, phone conversations).<br />
5. Monitor and measure effectiveness of<br />
outreach: including both backwardlooking<br />
and forward-looking advice on<br />
the communication process, including<br />
identifying “success stories” as well as<br />
those situations where your time may<br />
have been used better.<br />
A provider of targeting and outreach<br />
advice will help guide a company to a plan<br />
that best utilizes the investor relations<br />
officer’s and the management team’s time<br />
and puts the officer in front of the most<br />
appropriate and impactful investment<br />
managers. The type of analysis and<br />
reporting provided generally includes:<br />
• Top-down/Strategic:<br />
• Global analysis of the market-bymarket<br />
opportunity for additional<br />
investment from prospective<br />
investors;<br />
• A view of positions within<br />
your current shareholder base<br />
potentially at risk.<br />
• Bottom-up/Tactical:<br />
• Just-in-time money center analyses<br />
prior to any non-deal roadshows;<br />
• Analysis of attendees and meeting<br />
interest at brokerage-sponsored<br />
events to prioritize exposure to the<br />
best investors;<br />
NYSE IPO Guide<br />
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