IROs note: ‘We’ve seen an increase in our international shareholders’
The enforced move to virtual meetings, conferences and non-deal roadshows in response to the Covid-19 pandemic has given public companies a chance to enhance their overseas marketing, according to several panelists at the IR Magazine Forum – US 2021.
Prior to the pandemic, access to international investors was hampered by the cost – in terms of both financial concerns and management’s time – of traveling overseas. But both Victoria Hyde-Dunn, head of investor relations at 8x8, and Keri Mattox, senior vice president of investor relations and chief communications officer at Zimmer Biomet, said they have ramped up their overseas investor marketing through a variety of means during the last year.
‘Access to management is so important for international targets and shareholders, and we were able to actually increase access in a virtual setting,’ Mattox explained. ‘It’s something we really prioritized in 2020. We saw more international holders attending virtual conferences than we’ve seen attending traditional in-person conferences in the past.’
Mattox said this targeting and engagement has paid off, as Zimmer Biomet has seen an increase in its overall percentage of total shares outstanding being held by international shareholders.
At 8x8, Hyde Dunn has been marketing to overseas investors for several years, with two of the company’s top 10 shareholders being based overseas. She said during Covid-19, she has used a mixed approach of working with sell-side corporate access, direct outreach to and from the buy side (especially in Europe), using a corporate access broker and using surveillance software to conduct peer analysis.
Both Mattox and Hyde Dunn have found that European investors are more likely to ask about a company’s ESG performance and expect the management team to be able to discuss ESG with some comfort.
While Hyde Dunn has found opportunities for more meetings in Hong Kong, Singapore, Japan, Australia and the UK, time zones have posed challenges.
This is something Ari Davies, global head of corporate analytics at IHS Markit, picked up on. ‘If you’re a West Coast team and you’re trying to do European marketing, you have to space that out over a number of days,’ he pointed out. ‘Perhaps you decide to hold a European roadshow and ask for two or three hours every day across a week. Ultimately, teams have figured out that that’s less of a time commitment than four or five days of travel, as it was before.’
Mark Loehr, chief executive of OpenExchange, said he has seen a large increase in the number of non-deal roadshows being organized in 2021. ‘It caught me off guard,’ he said. ‘I thought there would be a gradual increase in non-deal roadshows, but it was like people put them on in 2020 to see whether there would be a reopening. And this year, all of the non-deal roadshows that were postponed during the wait-and-see phase have gone virtual.’
Loehr said OpenExchange hosted more than 500 virtual banking conferences in 2020, and he expects to provide the meeting technology for as many as 200,000 individual meetings this year.
But as greater numbers of the global population receive the vaccine and in-person events begin to return to the calendar, it raises an interesting question about what percentage of investor marketing will remain virtual in the future. IR Magazine has talked to a number of sell-side corporate access professionals who are preparing to host small, in-person domestic investment conferences from August onwards. While they will offer a chance for small numbers to get back together in the same place, there will continue to be a need for virtual meetings to happen in tandem.
‘I don’t think anyone would argue that virtual engagement isn’t here to stay,’ Davies said at the forum. ‘But there might be some ways teams divide their strategies. For relationships you already have, virtual engagement is fantastic for checking in and maintaining them. You can have an efficient meeting and you don’t have to travel.
‘But when you think about the relationship-building aspect and bringing someone new up to speed on your company and your story, that may be better done through company events or bringing them to your facilities around the world.’
During a breakout session at the forum, a couple of audience members expressed skepticism about the appeal of hybrid investment conferences, noting that if they asked their CEO to travel to London for a conference at which 30 percent of the meetings were virtual, the CEO might feel it was a waste of his or her time.
‘Instead of traveling for 200 days of the year, CEOs will travel for 75,’ said Catherine Miles, director and head of corporate events at SVB Leerink. ‘They will attend in-person events that are more topical, exclusive and targeted. It’s those 30 investors that would be on site with you, that you’ve carefully selected to be there in person, that will make these interactions much more strategic in the future.
‘What this pandemic will provide us with is the ability to better prioritize. IROs will have more thoughtful plans for their companies about who to see and when. While picking up the phone and speaking to the top 10 shareholders is now easier than ever, it really has become a bit chaotic. In my opinion, brokers will undoubtedly help shape the meetings more thoughtfully and strategically for management teams than ever before.’