Roadshow guide to Baltimore

Each year, IR Magazine surveys hundreds of IR professionals from around the world to determine the globe’s most popular non-deal roadshow destinations. 

This year, the top 20 ranking of the most-visited cities includes two new entries: one is Baltimore, which is the focus of this article, and the other is Denver, which will be tackled in a separate article next week.

In truth, Baltimore is not really a new entry to the top 20. In most years it makes an appearance, including in 2016 and 2017. It dropped out last year, but then returned in 2019 as the 18th most-visited city globally.

Of the 456 IR practitioners who took part in IR Magazine’s survey, just over 15 percent said they had visited Charm City over the last year. Unsurprisingly, Baltimore ranks higher among North American companies: for this group of respondents, it is the ninth most-visited city for roadshows. 

Baltimore’s return to the top 20 may have been helped by the new internal corporate access team at T Rowe Price, the city’s main institutional draw. T Rowe is one of a number of large asset managers that, in recent years, have set up internal teams to help organize meetings directly with companies. 

It’s possible, however, that Baltimore rose in the rankings due to tapering interest in European roadshows – the two cities to fall out of the top 20 this year are Milan and Copenhagen. Mifid II may also be playing a role here, with IROs in Europe reporting difficulty filling some roadshow schedules. 

Whatever the reason, Baltimore’s return to the ranking underlines its importance as a roadshow destination for many companies. And that’s due to just one firm: the aforementioned T Rowe Price. 

To describe Baltimore as a ‘top heavy’ roadshow destination would be something of an understatement. T Rowe clocks in at more than $750 bn in equity assets under management, according to data from IHS Markit; the next biggest firm for equity assets, Brown Advisory, has around $35 bn. What’s more, T Rowe is the kind of shareholder companies dream about: active, low turnover and focused on the long term. 

T Rowe is also becoming more accessible to companies that want to engage directly with their shareholders. Alongside the likes of BlackRock and Wellington, T Rowe has set up an internal corporate access function to manage the firm’s relationships with companies and the sell side. As part of this effort, it is one of five asset managers that have teamed up to hold their own investment conference next spring. 

At the same time, T Rowe has committed to continue working with the sell side on corporate access. Following the emergence of news reports about the buy-side conference, the investment firm said in a statement: ‘Recent press reports have suggested that big investment firms, including T Rowe Price, plan to discontinue the long-standing practice of [using] Wall Street firms for access to companies in which we invest. In fact, T Rowe Price continues to find value in the access to corporate leaders that Wall Street has facilitated over many years.' 

Stopping by

One company that tends to fly in and out of Baltimore for a meeting with T Rowe is The Coca-Cola Company. ‘Two months ago, we went to Baltimore with our CEO, James Quincey, and it was a one-and-done meeting,’ says Nick Johnson, senior IR manager at the company. ‘Then we flew up to New York for additional meetings. Given T Rowe is there, Baltimore is a very high priority city for us.’

Johnson says there can be a lot of people in the room when meeting with T Rowe, given the amount of money managed by the institution. ‘When we go to T Rowe’s offices, it’s generally the lead analyst on the sector, and then he brings in some of the top portfolio managers,’ he explains. 

‘It’s a really engaging conversation in terms of the long-term strategic outlook, not only on the company but also the industry. And our CEO gets to hear some first-hand feedback from portfolio managers.’

But Baltimore is not just about T Rowe. Other significant investors include Brown Advisory, Brown Capital Management and 1919 Investment Counsel.

‘You think of T Rowe as the only one there, but there’s actually almost $90 bn in assets under management for other firms, so it’s a really good city to see,’ says Mary Turnbull, managing director of corporate access at Raymond James & Associates.

Something worth noting, says Christopher Stroh, director of situational analytics, research and analysis at IHS Markit, is that ‘ClearBridge’s Legg Mason office in Baltimore has had the third-highest number of meetings of all institutions in Baltimore over the last several years.’ He adds, however, that ‘issuers are much more likely to meet with ClearBridge out of the New York office’.

While there are a few value investors, growth is the name of the game in Baltimore with the three top equity managers focused on this style. In terms of geographical interest, North American issuers are most popular with more than 85 percent of the city’s equity assets invested in this region, compared with 8 percent for Europe and 4.5 percent for Asia, according to IHS Markit. 

Technology is the most popular sector in the city, scooping up a quarter of all equity investment. Over the last year, Baltimore-based firms have been ‘large buyers of basic materials, energy, technology, industrials and utilities,’ says Stroh.

Making it a trip

At a stretch, companies could spend a whole day in Baltimore, but they’re much more likely to do a half-day with another city tagged on. Turnbull says New York, Philadelphia and Washington, DC are all options. 

‘If you decide you want to add on Philly, a lot of times what we’ll do is start in Baltimore, have morning meetings and then drive up to Philly, which takes an hour or so,’ she explains. ‘A lot of people also tie on a trip to New York when visiting the mid-Atlantic. You can take the train pretty easily between Baltimore, Philly and New York.’

The city is pretty easy to get around, with most of the buy-side firms located in the downtown area around the harbor. ‘The city’s not particularly big and most of the firms are within the city limits, so it’s not like you’re having to drive all over the place,’ says Turnbull. 

For companies that have time to look around, the first place to go is Fell’s Point, the historic but lively waterfront area a short walk from T Rowe’s headquarters. And the first thing to eat? You shouldn’t leave without trying the city’s famous Maryland crab cakes. 

Top five investment firms in Baltimore by equity assets under management (EAUM)

Source: IHS Markit; data as of September 30, 2019