New-age IR: a younger, international breed of IROs

Isabel Lütgendorf may not seem like the typical IRO of a company listed on London’s Alternative Investment Market (AIM). Brazilian-born and in her early thirties, she is a far cry from the stereotypical, locally bred male IRO in his forties.

Lütgendorf, who joined renewable energy company Clipper Windpower in September last year, is one of a growing number of younger, more international and – more often than not – female professionals populating the IR arena.

Clipper isn’t your average AIM-listed company, either. It specializes in one of the hottest sectors of the future – renewables – and is headquartered in California rather than London.

Educated in the US, Lütgendorf was snapped up by Clipper while working in IR at Cookson, a materials science company founded in north-east England in the early 18th century. Lütgendorf says it was a tough decision making the leap from a solid IR position in a well-established company quoted on the main market to a fast-growing 21st-century start-up. ‘I had to decide between something I knew was very safe and something totally unknown and a bit risky,’ she confesses.

Her main concerns were whether IR would be important in the new company and whether she would struggle to get analyst coverage. Luckily, these fears proved to be unfounded. ‘I researched the amount of analyst coverage we’d be getting,’ she explains. ‘As renewables is such an attractive sector, we have amazing coverage from more than 15 analysts.’

Vital perceptions
Obviously firms vary enormously in their perception of IR, and that is something Lütgendorf had to take a gamble on. ‘I had no idea how important IR was going to be at Clipper, but fortunately it turned out to be very important there,’ she smiles.

The transition from the main market to AIM didn’t pose much of a problem. ‘It’s completely different on AIM,’ Lütgendorf explains. ‘It’s more relaxed and much easier in terms of regulation.’

Some complications did lie in store for the new IRO, because Clipper is a Reg S company: despite being based in California, the firm’s shares cannot be traded in the US. ‘When I first joined I spent a lot of time trying to get my head around all the rules to figure out what we could and couldn’t do,’ Lütgendorf recalls.

An increasing number of investors are making it their policy not to invest in AIM-listed companies, leading many firms to switch to a main market listing. Clipper does not have this problem, however, despite its dearth of US investors. ‘Our problem is really dealing with the demand, rather than having to find the investors,’ asserts Lütgendorf.

Even so, Clipper carried out a perception study to see what its investors thought about getting a main listing. The general conclusion was that it wasn’t the best time to have management focusing on listings rather than operations. ‘If you work at a smaller AIM-listed company, in a sector that’s not so exciting, you will struggle to attract investors,’ Lütgendorf remarks. ‘But renewables is such a hot industry, I think you’ll find there are always enough investors.’

As with all younger companies, Clipper has not been spared its fair share of teething problems. The company recently came into the public eye after £25 mn ($49.5 mn) in extra funds was sought from shareholders in March to help complete a hefty wind turbine contract. Barely a month later, Lütgendorf was flying to the US to announce that private equity group One Equity Partners would be injecting a further $150 mn into the company.

Starting from scratch
Before Lütgendorf took on her role at Clipper, the company’s IR was being taken care of by Lord Moynihan, who was also the company’s executive director and chair. ‘Investors were delighted that he was dealing with them, but he obviously wasn’t able to dedicate his time purely to IR,’ says Lütgendorf. ‘As he was on the board of three other firms, he didn’t have time for the more mundane aspects of IR.’

Now that Lütgendorf has fully settled into her role at Clipper, she admits she has better investor contact than when she was at Cookson. ‘In a smaller firm you pretty much have a blank sheet of paper and you shape your role as you go along,’ she explains. ‘Job descriptions don’t mean a lot, and you tend to wear several different hats.’

IR meetings at London-based Cookson would generally be jointly run by IR and management. Clipper’s management, on the other hand, is in the US, resulting in a lot more responsibility for Lütgendorf. ‘I’m sitting here in London, which is where all the investors are, so it’s a more interesting position to be in,’ she explains.

IR at Clipper invariably takes on a whole new dimension as management is so far away, with an eight-hour time difference. ‘IR is not about replacing management; it’s about acting as a bridge between management and investors,’ explains Lütgendorf. ‘With remote management, Clipper uses that bridge much more. If investors need an answer immediately, they might come to me instead of going straight to the CFO.’

Lütgendorf may well have adjusted to the situation, but what do the investors make of the limited management access? ‘Oh, they do get to see management,’ she insists. ‘Either we arrange conference calls or we’ll meet with those people when we’re on a roadshow, which happens three times a year.’

IR on a shoestring
New age IROs are not easily fazed, particularly when it comes to budget-related issues. Lütgendorf thinks many seasoned IR professionals would have been put off by the prospect of not having a Bloomberg at their desk.

‘Working at Clipper I have learned that the basics of IR require very little budget,’ she reveals. ‘You can survive by relying on broking as much as possible, and little else.’

The comfy option of joining a large IR team at a company already trading for 20 years does not appeal to Lütgendorf. ‘How do you improve from there?’ she muses. ‘You probably start craving nice little extras to help make you more efficient, but when you don’t have that base, creating it is what matters. It all boils down to knowing your shareholders, knowing your sell side, understanding the legislation and knowing your company. Those four things do not require any fancy gadgets.’

Clipper has managed to quench Lütgendorf’s thirst for a new challenge. ‘It’s partly about coming from a big company to a small company,’ she explains. ‘But it’s also about going from a company that was shrinking [Cookson was selling off a lot of its divisions last year] to a firm that’s growing faster than it can handle, with an order book full of more sales than we have turbines available.’

Lütgendorf knew she’d be in for a rocky ride doing IR at a more fledgling company based on the other side of the world, but that fits well with her sense of adventure. Not all IROs would be up for it, and the time differences involved mean she has very little control of her personal time. ‘You really can’t look at Clipper now – you have to look at Clipper in three years from now,’ she says.

And maybe three years from now Lütgendorf will have already embarked upon a new challenge. New age IROs do not settle for the easy life.

Award-winning IR
Isabel Lütgendorf scooped three awards for best IR at Cookson, including the grand prix for best investor relations by a FTSE 250 company, at the IR Magazine UK Awards 2007. The previous year, she picked up an award for most progress in IR by a non-FTSE 100 company.