Investor Relations

How to Get the Investors You Want

The recent Canadian Investor Relations Institute (CIRI) member event in Montreal, “ How to Get the Investors You Want ”, was an extremely insightful and productive sharing of ideas. Our conversation centered primarily on the results of a survey among CIRI participants. The survey focused on uncovering IR best practices among colleagues. It was interesting to learn that the vast majority of the event’s attendees do, in fact, engage in investor targeting in some capacity; however, participants seemed to incorporate a wide variety of screening metrics into their workflow.

We discussed the benefits of including economic profile and a Generalist mentality into the screening process to provide a broader and more opportunistic pool of capital. The Generalist-oriented screen and economic profile also assists IROs and CFOs in increasing the overall efficiency of their time allocation.

In addition to the screening process, our colleagues voiced their respective frustrations with matters relating to outreach. TSX-only listed companies continue to have frustration figuring out their equity and debt ownership due to the only disclosure law in Canada being the Early Warning filing required when 10% or greater of a company’s shares have been acquired by an investor. In addition, TSX-listed companies that also have a NASDAQ or NYSE listed security express less frustration than their TSX-only listed counterparts due to the quarterly required 13F filings. However, these companies find frustration in the lack of transparency and time-lag of the filings as well as the lack of available information on Canadian and global investors that do not file 13Fs. Companies without access to a shareholder identification platform to figure out their shareholder base result to blind, direct outreach with the investors they have had interactions with.

The panel also discussed the evolution of an IRO’s relationship with the sell side. Many of the event attendees acknowledged that the contraction of the sell-side has continued over the past three years. This contraction seems to have altered the agenda of the sell-side, predominantly by increasing the number of faster money trading firms into meetings. Needless to say, quality of meetings has been an increasing concern, especially over the last year. To combat this trend, participants admitted to the increased practice of proactive outreach and an increased focus on targeting at the people-level.

Moreover, IROs and CFOs admitted that they feel they continue to meet with the same people. In response, the panel discussed how other clients typically broach this particular topic, which again emphasized the importance of incorporating economic profile into the screening process. Other supplemental metrics focused on capital efficiency also entered into the conversation, specifically economic profit, shareholder wealth, and EVA/MVA models. Overall, the discussion acknowledged the importance of focusing more on the sector-agnostic component of targeting.

Lastly, there was an overwhelming emphasis on the increasing presence of ESG/SRI in discussions with investors. While this has been primarily relegated to the European markets, it has made a distinct impact among North American investors as well this year. Participants underscored the importance of understanding the competitive landscape of corporate governance and how grasping the relative strength of corporate governance policies are critical to attracting the best long-term investors. CIRI Montreal did a great job organizing the event and turn-out was promising. This was our first year participating on the panel and we were pleased to be able to share our insights and experience with this group of senior-level IROs.

Seven Recommendations to Best Identify Investor Opportunities:

  • Separate the stock into investment profiles
  • Link frequency of meetings with buying/selling, not only within the stock but among the various investment profiles the stock offers
  • Calculate the opportunity cost of time for investors met
  • Implement a sector-agnostic approach and extend beyond the “carousel”
  • Increase proactive outreach to investors
  • Constantly measure efficiency/effectiveness of segmented investment theme
  • Understand the relative positioning of your corporate governance policies


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