Charles Dickens once wrote that Boston is what the whole United States should be. With its freedom trail and rich literary history, Boston is a center of US history and culture, not to mention the birthplace of the American revolution.
Boston’s revolutionary spirit lives on today as the city undergoes a new kind of transformation. Once touted as the old money center of the United States, Boston is now a breeding ground for technology hopefuls. ‘The Boston area, along with Silicon Valley and Washington DC, is becoming a hot spot for new technology companies,’ says Joe Grillo, senior vice president of Nicolazzo & Associates. ‘We have MIT and Harvard here so it’s a great area to incubate companies.’
Tech haven
Technology stars like Sycamore Networks and CMGI have put Boston on the map as a major tech center. ‘Those companies virtually started from nothing and they zoomed,’ notes Grillo. Boston-based investment firms have reaped the benefits of soaring tech stocks. ‘We were one of the early ones to discovere CMGI,’ says John Livens, manager of Winchester Capital. ‘The company has grown from $45 mn to $15 bn; that’s a good indication of the type of environment we have here.’
‘A lot of Massachusetts-based institutions and venture capitalists are becoming interested in optical networking,’ says Grillo. ‘We have about a dozen established companies right here in Boston and it would be relatively easy for an optical networking start-up with a good business plan to get funding here.’
Boston is also home to a healthy biotech sector, with companies like Biogen based here. ‘You pick up the business press and there are whole pages devoted to biotechnology companies,’ says Grillo. ‘These companies are creating revenues and profits and, as a result, there is lots of investor interest.’ .
IPO activity
Burgeoning technology and biotech sectors translate into high IPO activity. ‘Boston is always a stop on a pre-IPO roadshow and once you are public you cannot avoid it,’ says Mary Conway, head of her own investor relations consultancy in Boston. ‘There has been a great deal of IPO activity in the internet space although it has quietened down a bit recently,’ she adds. ‘A lot of IPOs are now being held at the gate because of recent market slowdowns.’
However, Boston’s IPO market is still creating lots of demand for investor relations services. ‘This is definitely an exciting time to be doing IR in Boston,’ says Conway. Sharon Merrill Associates, Brodeur Worldwide Public Relations, Miller/Shandwick and Morgen-Walke Associates all have offices in the area.
Money center
As the fourth largest equity center in the world, with 120 buy-side institutions, Boston is definitely a roadshow stop. Large firms like Fidelity, Putman and State Street are headquartered here. ‘Outside of New York, Boston has some of the most influential fund managers available,’ says Conway. The city is also home to big name investors like Jeff Vinik, formerly of Fidelity and now heading Vinik Asset Management, and Scott Black of Delphi Asset Management.
‘Originally, Boston was dominated by old-line firms, like Bank of Boston, State Street and Massachusetts Financial Services,’ says Livens, a veteran of the Boston financial community. Livens spent most of his career as a partner at State Street Research and now manages Winchester Capital Management with Calvin Hori. ‘We basically invest in small caps and companies where we know the management.’
In recent years, Livens has noticed a shift away from the old boys’ network that once characterized Boston’s investment community. ‘What has changed is that old family connections are not as important,’ says Livens. ‘By far the most successful firm these days is Essex Investment Management, which is run by a whole mixed bag of people.’
In terms of sell-side firms, Boston is home to key players like Tucker Anthony, Adams Harkness & Hill and First Albany. Yet, as Grillo explains, ‘Because of its proximity to New York, a lot of major sell-side players aren’t in Boston.’
Lead time
Planning a roadshow or analyst meeting in the second largest money center in the US requires some lead time. ‘Make sure you plan well in advance and let the analysts and investors know why they should meet with you,’ suggests David Calusdian, executive vice president of Sharon Merrill Associates. ‘In other words, before setting up a group meeting or one-on-ones make sure the prospect has some knowledge of your company and is in tune with its developments.’
Conway says lunch and breakfast meetings are typical and longer presentations are best scheduled in the early afternoon. ‘The Meridian Hotel, in the heart of the financial district, is very accustomed to dealing with the investment world.’
For brief encounters with portfolio managers and analysts, an early morning, pre-market opening meeting usually works best. ‘Our view is that it is always more difficult for them to meet during a trading day,’ says Grillo. ‘If you are a smaller company starting up you have to think about doing things at the convenience of analysts.’ Unlike New York, Boston is a walking city so it takes just a matter of minutes to go from one meeting to the next.
Media relations
Local media are receptive to interesting story ideas. ‘It can be safely said that the best business coverage is the Boston Globe on a daily basis,’ Grillo declares. ‘They have a number of good reporters covering a variety of sectors.’ Companies in hot sectors like technology, biotechnology and optimal networking will most likely have a better chance of getting press coverage these days.
Other publications include the Boston Business Journal, a weekly magazine, and the daily Boston Herald. Also, every Wednesday the Wall Street Journal publishes a supplement on New England focusing on business news in the Boston area.
For more information about planning roadshows and analysts meetings in Boston, check out the Niri Boston chapter at www.niriboston.org. The chapter just recently added a section called Roadshow Resources, to help investor relations officers from other cities plan meetings in Boston.
