Investor targeting series: How they do it at Technicolor
How do you plan your roadshow activity over the year?
We create a yearly plan – leaving room for some adjustments, of course – for senior management roadshows after quarterly and annual results. During these, we focus on our existing investors and in certain regions we’ll aim to see a few potential investors as well. We also take part in a number of conferences, 90 percent of which will be attended by the IR team only. We use the organizing brokers to suggest potential investors and to set up our meeting schedule.
During the relatively calmer periods of end of November/beginning of December or May/June, we’ll do more roadshows (both with senior management and IR-only) where we aim to meet about 60 percent of new names. Because of Mifid II, we have an increasing number of investors reaching out directly, so we’ll offer meetings and prioritize those we’ve spoken with on the phone or investors with slightly different profiles that we’ve met at conferences.
Some funds will be happy with two or three meetings a year while others that are working on their models will require a lot of one-to-one interaction.
How do you identify new investors to target?
We do a mix of database searches on the top 10-15 investors in our peer group that have a good understanding of our sector; the most detailed information we get is about US-based funds. We also speak to local brokers.
Do you rely on brokers to support your targeting efforts?
We have relationships with brokers covering not us but our peer group, which help us target smaller, Tier 2 US-based funds. These local brokers have a much deeper reach in the US than the global names. Big brokers will usually want to put you in front of their clients and some of them will outright refuse to add certain asset managers to your roadshow schedule because they’re not client of theirs. We expect things will get worse with Mifid II, as the number of brokers used by institutions will go down.
What are the main targeting challenges you face?
Targeting is more challenging for mid-cap firms because there’s a great variety of fund profiles and a lot of smaller-sized funds that are not necessarily working with brokers. It’s difficult to get information on these funds and profiles differ greatly from one market to another. We’ll deal with sector funds but also mid-cap funds: there are many players and it’s not always easy to define which ones we should target.
With Mifid II, we’ll most likely receive less research and more direct requests from investors. We’re going to have to do more targeting in-house, as brokers will be able to introduce us only to their clients.
How do you typically approach meetings with new investors?
Most new investors we meet have done their homework and have a list of questions ready. As a rule of thumb, we’ll usually have an IR-only meeting where we’ll discuss a number of basic questions related to our business model before we offer access to senior management. Meetings with senior management will be for investors to validate an investment strategy. We may have an exploratory meeting with management if the fund is very large and represented by another fund in our shareholder base.
Some funds that are invested in our competitors will call us for information on the sector –we can usually tell when questions are all about one of our businesses. It’s interesting to get information on the investment theories of our peer group and the industry in general. Those meetings will be IR-only, of course.