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IR and communications • Detailed premeeting briefing on current exposure and portfolio trends for each investor in advance of an interaction. In concert with an effective investortargeting provider, the investor relations officer will be able to confidently approach the investment community with the knowledge that time and resources are being used effectively. 5.7 Market perception feedback Ipreo The market intelligence and surveillance and investor targeting and outreach functions provide critical data and insights on the current and potential states of the shareholder base, which are both imperative to running an impactful IR program. Perception feedback provides a largely qualitative complement that will enable an in-depth assessment of the investment community’s view on various facets of the company. The key to gaining valuable feedback from investors and sellside analysts is the utilization of a third party to conduct the research. Not only will a third party bring expertise to the design and execution of perception research but the indirect connection it has with the company will foster an environment that allows for the free exchange of thoughts and opinions. Perception feedback can be used in advance or after major events, such as an investor day or quarterly earnings announcement, to assess expectations or judge performance. Perception feedback can also be used on a more routine basis in order to keep a constant finger on the pulse of investor opinion. Regardless of the option chosen, expect the following from the market perception feedback providers: • assistance and guidance on the topics that should be covered and the design of the questionnaire; • consultation with regard to the participants most applicable for the study and the timing of the project; • a comprehensive analysis of the study results that provides a synthesis of the feedback topic-by-topic and puts forth recommendations to address the concerns held by the investment community. When conducting an initial perception study, a third party will host a series of conference calls with the investor relations officer to better understand the company’s strategic direction, what was discussed during the pre-IPO roadshow, what has been accomplished since the IPO, as well as its current disclosure and communication practices. This understanding allows the perception feedback consultant to design an effective questionnaire and ask appropriate probing questions during the telephone interviews. The goal is to keep the questions openended to allow the participants to freely discuss the critical factors driving their investment or rating decisions. Themes to cover may include: • Overall view as an investment: competitive strengths, weaknesses, risks, opportunities, reasons for a stock’s discount, suggestions for achieving a premium, events that would cause a decrease/increase in position, fundamental metrics used to assess the stock, relative valuation; • Business and capital allocation strategies: confidence in the current strategy and business model, strategic concerns, how investors would prefer the company to utilize their excess cash, what the potential growth areas are for the company; • Earnings and guidance: reaction to latest earnings release, expectations for the full year, biggest challenges going forward from a results perspective, opinion on information presented; • Peer and industry intelligence: preferred investment choice in the space, best-in-class disclosure and communication practices for the sector; • Senior executive team: overall opinion of senior management’s strategic vision, execution, credibility, capital management, corporate governance structure and expectations for shareholder interactions; • IR efforts: overall satisfaction with IR’s articulation of the company story, accessibility, credibility, frequency and content of communication and addressing misperceptions in the marketplace. Equally important is choosing the appropriate study participants to ensure receiving unbiased, comprehensive feedback. Participants to be interviewed are typically dispersed among five segments: current buy-side institutional holders, potential buy-side institutional investors, recent buyers and sellers, current sell-side analysts and potential sell-side analysts. Global investors, focusing on North America, the United Kingdom, Continental Europe and Asia, should also be included, as participants’ expectations often vary by region. When creating the participant list, those investors should be chosen that are familiar with the company as well as the management and IR teams. The optimal places to locate this information include the company’s pre-IPO roadshow agenda, recent meeting schedules, conference call and webcast participant lists, as well as notes entered in the investment community database and CRM. The consultant will also provide guidance on the most favorable times to conduct a study. Avoid launching the interviewing period if a major company announcement is expected to affect participants’ opinions or during earnings season, major holidays or well-attended industry conferences. Once the interviews are complete, expect the consultant to provide a comprehensive analysis of the study results that includes in-depth, topic-bytopic summaries, which are supported by verbatim comments from the participants. The final study will also identify any disconnects between what the company is communicating and what the investment community is hearing and include actionable, best-in-class communication recommendations to address the investment community’s concerns. Based on these findings and recommendations, the company can tailor its disclosure and messages to shift perceptions closer to the preferred state. Companies most commonly utilize large-scale perception studies annually in order to get an in-depth assessment of investor sentiment. These studies are a terrific benchmarking tool, and the results, in part or in their entirety, are 60 NYSE IPO Guide
IR and communications typically a component of the information reviewed by the company’s board of directors. 5.8 Investment community database and CRM Ipreo One of the biggest challenges faced by investor relations professionals is not only the amount of investor intelligence and data they are inundated with on a daily basis but also the challenge of obtaining the high-quality information that is required to plan and implement smart strategy and tactics. In order to navigate the sea of data effectively, a global investor community database and CRM are required. A global database system will provide access to a wide array of information from the desktop and from the road. Critical elements of a database system include: • a secure web-based environment that allows for individual log-in credentials among team members along with the ability to share information and collaborate across the team; • support of dedicated, knowledgeable and global account management team that provides 24/7/365 access; • access to global investment community data and analytics including: • detailed contact and background information on investment staff at buy- and sell-side firms; • comprehensive information on the background, investment styles and investment approaches of buy-side institutions at the firm and fund levels; • complete portfolio information for every publicly listed equity around the world; • detailed, global fixed-income portfolio information; • advanced screening capabilities enabling access to the information required; • sell-side research reports and detailed earnings estimates; • calendar of investment community events as well as real-time and corrected transcripts of results and investor presentations; • real-time market data and news; • a robust CRM system to manage and report on the team’s interactions with all participants in the investment community, including: • ability to easily manage, input and track one-on-one meetings, group meetings, phone calls and e-mails; • ability to customize CRM data points to best fit the company’s issues and requirements; • list management tools; • e-mail distribution; • one-click reporting to view items such as event itineraries, institutional and contact profiles and post-roadshow feedback reporting; • management-ready reports that highlight the effectiveness of IR and executive meetings with the investment community; • ability to export data and reports into Excel, Word, and PDF formats; • integration of proprietary CRM data with surveillance ownership information, investor targeting and perception feedback information. The investment community database and CRM system are typically the central tool utilized by investor relations departments of any size to coordinate and manage activities on a daily basis. A database system has the ability to grow along with investor relations needs and requirements. At its core, a database system provides the user with a wealth of information that is critical and essential to any IR professional. For instance, when an incoming call or meeting request is received from an unfamiliar investor, the database user can quickly pull up the investment firm by name, review its background, investment philosophy, activist history, portfolio composition and metrics such as investment style and portfolio turnover. Additionally, the user can also view background information such as employment history, coverage details and educational background of the analyst or portfolio manager making the call. This data educates the user as to the investor’s relevance and allows the user to make an informed decision about the amount of time he or she will provide to the investor. Is a phone call sufficient? Should there be a one-on-one meeting with this investor? Should this investor be provided access to the CFO or CEO? These are all critical questions that need to be answered on an ongoing basis by investor relations professionals to properly manage their own time and the time of their management team. For a company that has successfully completed the IPO process, the first step in using its investment community database is to seed historical investor activities with the itineraries from the IPO roadshow. Additionally, the notes from the IPO roadshow meetings should also be brought into the system. The IPO is a perfect opportunity to utilize the support of the database provider to understand best practices for managing the data, leveraging their tools to import the company’s data and establishing customized views and data tags relevant to the company’s story. The activity data from the IPO will provide a perfect foundation for future investment community interactions. Another opportunity for getting immediate value from the database is to utilize the final share allocations provided by the investment banking team. The database provider will be able to map the investment firms on the allocation list with the investment firms in the database and import the number of shares that were purchased by each firm at the time of the IPO. This will allow tracking the progression of the shareholder base from day one of trading through to the time it is first updated by the surveillance provider or by ownership updated via public filings and beyond. An investment community database also allows moving beyond the current ownership of stock to access the global portfolios of investment managers and funds from around the world. The owners of the company’s peer group can be easily tracked and the strengths, weaknesses and opportunities of each company’s ownership profile can be analyzed. The database will also allow the user to run detailed screens of investors by categories, such as location, investment style, portfolio turnover, or recent buying and selling activity in a particular stock or across a sector or peer group. Investor screening will enhance the user’s ability NYSE IPO Guide 61
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Contributor profiles NYSE IPO Guide
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