Gerry Scott wants to change the investment conference world. The president and founder of Boston’s Wall Street Forum is intent on bringing more companies and portfolio managers to meet each other at his conferences. And an increasing number of the financial community audience are tuning into the corporate IR presentations over the internet, either live or via a broadcast replay in the following weeks.
Since conducting what Scott claims was the world’s first institutional investor conference web cast in January 1997, the number of analysts and portfolio managers dialing into the Wall Street Forum’s conferences over the net has grown astronomically. The first tentative experiment in cyberspace brought Scott and crew 75 attendees down the line – joining a further 650 or so at a live venue.
The last conference for which Scott has full figures was in June of this year. On that occasion some 730 portfolio managers surfed their way to the conference site (www.wall streetforum.com) and it looks as if the latest conference in November is going to blow over the 700 mark online too. Scott may be half hype and half substance, but the substance certainly seems to be growing fast.
Run faster
Even if the Wall Street Forum was the first off the mark with independent investment conferences over the net, it’s having its heels snapped at by some worthy competitors. Vincent Catalano, president of the New York Society of Security Analysts, admits that his organization isn’t quite there yet with its own net investment conferences but they’re certainly raring to go on that front (www.nyssa.org). ‘We’re in the testing phases,’ he says. ‘We intend to go way beyond what is presently being done by allowing the internet audience to drill down into further information as they listen and watch.’
Catalano is just as enthusiastic as Scott about what the internet might mean for the future of investment conferences. The NYSSA currently runs a pretty full program of industry related and topical conferences for its members (and more) each year but Catalano sees the net as really widening its capabilities. He believes that investment conferences will eventually be like television programs: the live audience will be much smaller and less significant than the electronic audience. That offers major opportunities for IR officers to spread their message to a wider, more interested group; and for the financial community to save time, cost and energy in having to actually physically attend events.
We’re not quite there yet, of course. The Wall Street Forum uses lowest common denominator technology to allow as many people as possible to dial into its conferences. No video play yet, just a picture. No speedy feeds, keep it simple. Scott says feedback from the investment community has led him to the conclusion that this is still the best way. As it stands, people with 28.8 modems can still dial in and enjoy the show.
In his capacity as a financial analyst at a leading New York brokerage, Catalano says that attending a conference over the internet rather than in the live venue currently means that you’re probably in the ’90 percent plus range of equal value. Plus you’ve got the advantage of doing it at your desktop.’ Still, he adds that the 5-10 percent of value you might lose is probably worth it in travel time saved. ‘There are advantages, it’s just the technology’s got to get us there.’
Big players
Whatever the thoughts of Scott and Catalano, the fact remains that it’s not these so-called ‘independent’ investment conference producers which dominate the game. Sure, financial analyst societies across the globe welcome corporate presentations to luncheons on a regular basis, but the really big players are the investment banks. And the US investment banks at that. Goldman Sachs, Lehman Brothers, BancBoston Robertson Stephens, Montgomery, the list goes on. They originated and fine-tuned the investment conference concept and, by most accounts, they’re still going great guns with the old approach of getting everyone together in a hotel for a couple of days. You won’t find many of them broadcasting live over the internet.
That’s because they’ve got their own agenda, bemoans Scott. ‘They’re scared of it,’ he says, arguing that the fear is that of losing total control of the information, the audience and, hence, part of the big bucks earning potential. ‘The existing model is archaic and brokerage firms have a vested interest in maintaining the status quo.’
But Scott says that the Wall Street Forum’s ‘dynamic’ approach will push the investment banks to change their concept. ‘We’re in an industry for the most part dominated by investment banks,’ he says. ‘However, there are certain partisan issues associated with that.’ Scott brings up the fact that investment bank conferences are all about self interest: limiting the audience to the bank’s buy-side clients, inviting corporate presentations from investment banking prospects, and generally earning soft dollar commissions.
Who can argue with that? Goldman Sachs said it would be unlikely to comment on the issue and Robertson Stephens failed to get back to us. Still, is there anything actually wrong with such an approach?
Simeon Vadillo, general manager of international and institutional relations at Spanish oil and gas giant Repsol, says that as an IR officer you’ve just got to pick and mix which conferences you attend. Recognize the self-interest of the investment banks and use it to your favor. His attitude is that as long as the banks are getting the right type of bums on seats, what does it matter that they are serving their own ends too?
Vadillo and colleagues have been to several investment bank organized oil & gas conferences this year as well as to the European Investment Congress, an ‘independent’ event in Edinburgh. Indeed, of all of them he says the Goldman Sachs oil & gas conference in New York in November was the most ‘complete’ – he delicately avoids using the term ‘best’. ‘We work with many of the banks and they are inviting their clients,’ notes Vadillo. ‘But for us that is okay because they have many clients.’
Hidden agenda
Catalano agrees that ‘brokerage sponsored events might have potential conflicts’ and could be seen as ‘currying favor’ for the potential of investment banking business, but he says they certainly have their useful purposes. As most of the NYSSA’s conferences are one-day events with little opportunity or time for break-out sessions the potential for questions could be limited by the public setting. He recalls a portfolio manager friend of his telling him he never asks a question of management in a public setting unless he knows the answer, is sure the management knows the answer, and he holds the stock. That way, a good answer might convince others in the room that it’s a good stock to hold too.
Like others, Catalano says that his friend reserves the tricky questions for a one-on-one environment as he doesn’t want to let anyone else know his ideas. ‘I think that’s quite an intelligent approach,’ chuckles Catalano, adding that the wealth of opportunity for break-out sessions at most brokerage-sponsored events makes them a success. ‘They might have an alternative purpose but they’re still very worthwhile going to.’
So what’s Catalano’s advice to investor relations officers considering the merits of investment conferences, whether live or on the net, independent or brokerage-sponsored? ‘Know your message and know your medium,’ he intones. ‘If it works for you then clearly it should become part of the wider communications package.’
