With all the technological advances sweeping across the financial sector, you’d think the job of conducting investor relations would be easier today than it was a mere four years ago. Instead, technology has raised expectations and added more complexity to the tasks at hand. It should surprise no-one then that the internet, the dominant force impacting the securities markets, also plays a key role in some of the powerful tools available to assist IR practitioners.
The newest web-based applications reflect the internet’s potential to transfer resources from consultants to IROs. From contact management to advanced targeting capabilities, these products allow real-time access to the sophisticated databases and research engines consultants previously pushed out to clients following a phone call or a monthly or weekly data transfer. IROs now simply turn on their computer and pull in the information based on their own needs and specifications.
One such product currently on the market is IR Channel, launched in June last year by The Carson Group, a financial information services company based in New York. IR Channel, which now boasts over 500 users around the globe, is the result of several years of development, beta testing and, as claimed by Eric Frank, a Carson director and architect of IR Channel, a fluid, open-ended perspective. ‘We’re never finished improving the system and bringing in new technology to keep the product on the cutting edge.’
While Carson could have simply transferred its IR products from PC-based applications to the web, the firm started with a blank slate, creating a completely new IR tool. ‘Instead of replacing our former IR product, Hero, we wanted to get outside of an assistant, administrative-intensive environment, and have the types of things that the heads of IR or CFOs would also be drawn to on a regular basis,’ explains Frank. ‘At the same time, we wanted to bring together all of the different information we collect and create an investor relations desktop, something customized to an IR focus.’
Dreams come true
To bring IR Channel from concept to product, Frank says Carson set a number of key goals. Functionality and ease of use were at the top of the list, as was the depth and comprehensiveness of the data. The result: users have access to everything from real-time quotes, historical pricing and technical charting, to Carson’s global database of institutions, mutual funds, and contacts, as well as customized profile pages which can be set up to reflect the ownership data for a client company and its peers.
Feedback from clients is positive. ‘I like that when our executives call with questions, the answers are right there on IR Channel. When someone calls me up looking for information, I can pull up a profile, and I know if I’m talking to a hedge fund or a long-term investor,’ says Don Bowler, vice president, investor relations at Portland, Oregon-based StanCorp Financial Group.
Bowler and other IR Channel clients receive news, Carson’s market commentary, which includes 15 daily updates, an alert function, and detailed and consensus earnings estimates. ‘One of the biggest benefits of IR Channel is detailed sell-side earnings estimates and full-text analysts’ reports from Ibes and Multex. When you compare what these two services alone would cost, they practically pay for an IR Channel subscription,’ notes Frank.
Carson’s relationships with Multex and Ibes, as well as news with vendors such as Dow Jones and PR Newswire, are indicative of what Frank calls a ‘best of breed’ approach, providing clients access to premium services. At the same time, he says, Carson brings an economy of scale to that access.
As for future enhancements, IR Channel will soon offer a news clipping service, a monitoring service through a partnership with eWatch, which tracks over 1,000 web publications and message boards, and an investor wizard, for advanced targeting studies. ‘If you were a new software company, for example, you could pull up top buyers of computer software in a specific region, and then display them based on your own defaults. You could display the contacts for your industry if you wanted, and then start creating your own list of unique contacts through keywords, or immediately e-mail or blast fax them. You can even pick up driving directions to go see someone,’ says Frank.
Frank notes that accessibility and timeliness were also important elements of the product. Because it is web-based, IR Channel is accessible from virtually anywhere at any time. Those clients away from a computer can access the information through their wireless Palm VII, and soon through their cellular phone. As for timeliness, virtually all of the data is updated on a real-time basis, or as soon as it is processed by Carson.
The final component, according to Frank, is cost effectiveness. ‘Customers have a very diverse range of things they’re looking for from many vendors,’ he notes. ‘We bring an economy of scale to that need. At the same time, we make the product à la carte, so whether you have $2,500 or $15,000, there’s something there for you.’
Power of integration
Thomson Financial Investor Relations is also rolling out a web-based IR product, IR Universe, which is now entering the beta phase of development and expected to hit the market at the end of March. For Thomson, which recently integrated the databases of Technimetrics and Georgeson’s investor relations divisions with those of its own IR group, IR Universe represents a chance to leverage the resources of the whole group of companies.
‘While we were converting our investor relations groups onto one platform, we were starting to work on an integrated, web-based application that includes all of First Call, which is analogous to our Corporate Advantage product, and everything you’d get in Anamate, which is our PC IR manager, as well as stock quotes, indices, exchange rates, and news,’ explains Catherine McEwing, managing director of product development at Thomson.
IR Universe is intended to become the platform for all of Thomson Financial Investor Relations, but McEwing says the conversion will take time, as many clients are more accustomed to the products they’ve come to rely upon. ‘The goal is to get Anamate and First Call corporate clients all using IR Universe. But we have no intention of forcing anyone off our existing platforms. For that reason, Anamate will remain a viable product as far as Thomson is concerned.’
For future users, Thomson has designed IR Universe to intuitively mirror the needs of investor relations officers as they move through their day. ‘The idea is someone starts their day by logging on and clicking into the First Call section of IR Universe,’ explains McEwing. ‘Within the module, there are several options, including Research Direct – the full text research documents from the sell side community – and Notes, which is their morning meeting notes. All of this is real-time. First Call includes complete estimates, not just consensus estimates. It contains actual estimates by brokerage firm or by person.’
Revision reaction
Perhaps a company finds an estimate has been revised or there is a change in recommendation. Their first reaction, says McEwing, may be to check the market’s reaction. This involves a click of their mouse to move into the market module of IR Universe. Market information includes news items, prices and charting, as well as indices and currency information.
From the market section, the user may wish to contact a specific institution, or they may have a conference call or trip planned. ‘To see who they want to get in touch with, they can go into the Anamate module, which is our global database of buy and sell-side contacts, institutions and mutual funds, and they can manipulate, personalize and query that data. They can do a quick search or a more complicated search, or they can pull up comprehensive investor profiles, contact lists, fund information, and ownership information. They can put in notes or add contacts onto list codes.’
The higher-level functions are aimed at senior corporate officers. On the administrative side, in addition to the Anamate contact management system and meeting planner, there is a maintenance function for making global changes in the contact system. Because the system is modular, users can opt for specific components in their product package. The expected range for pricing is from $12,000 to $28,000. ‘IR Universe is going to meet the needs of anyone within your organization who is responsible for dealing with shareholders, from administrators up to the CEO,’ says McEwing.
