Mike Stiller, co-head of Strategic Capital Intelligence at Nasdaq IR Intelligence, spoke with IR Magazine about the evolving landscape of investor relations and how data is driving the business.
The implementation of MiFID II last January has disrupted the investor relations landscape; one area we have found impacted by this disruption is the downturn in conference attendance for some of the largest public companies in the world.
New data from Nasdaq IR Intelligence reveals that the largest global public companies by market capitalization participated in two or three fewer conferences in 2018 compared to the previous year.
On average, mega-cap companies participated in 12 conferences last year while large-caps participated in nine, which represented an average decline of two to three conferences, according to Nasdaq’s research. Meanwhile, mid-caps participated in seven and small-caps participated in five, which was unchanged year over year.
Mike Stiller, co-head of Strategic Capital Intelligence at Nasdaq IR Intelligence, noted that the slip in conference attendance for the larger companies comes as clients have said they’re getting less out of conferences than they used to.
“It comes down to who is in the room,” Stiller told IR Magazine. “Clients tell us that they see a lot of the same people over and over again. The onus is on IR teams to find new people to talk to.”
Investor marketing remains as intensive as in previous years. But the data shows that two-thirds of all in-person investor meetings are happening outside of sell-side conferences, which is the result of a rise in direct engagement, according to Stiller. He has also observed an increase in IROs with a sell-side or financial planning and analysis background.
“There are new people in the IR seat, and they know how the machine works,” Stiller said. “They know how the sell side operates, but they also know the key accounts on the buy side and the people to talk to in their sector.
To study the emerging trends in investor targeting, Stiller and his team looked at how much time IR teams spent engaging with existing versus prospective holders, finding that large-cap companies spend 55% of their outreach with prospective shareholders on average, while mid-caps spend 67% and small caps spend 77% of their time on targeting potential new investors.
On average, it can take two quarters and two meetings, of which at least one is with management, to bring in a new investor into the fold. More selective stock pickers may require five meetings. But that time with investors pays off, with the average initial investment at about $140 million, according to data from Nasdaq’s Strategic Capital Intelligence.
Read the full interview here.
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