Amsterdam is probably best known internationally for its ‘special’ coffee shops and red light district but this liberal haven is also a major financial center. Ranked eleventh according to Thomson Financial/Carson’s Target Cities report, this Dutch city is an increasingly important roadshow stop.
The key to planning a visit to Amsterdam is researching the appropriate contacts. ‘It’s much less of a pot luck here now; you have to know the right people for the right things,’ says Dorothee Van Vedenburch, managing partner at First Financial Communications. Dutch institutions have recently begun consolidating so that the top 20 are managing around 90 percent of money under management. ‘A lot of the big insurance companies are consolidating. For example, Fortis and Rotterdam are going to come together.’
The problem with consolidating institutions is that it can cause volatility in the marketplace. Domestic companies see the trend as having both a positive and a negative effect. As Van Vedenburch says, ‘The plus is there are less people to visit and the minus is that if one of the institutions says no, it’s for a lot of money.’ Similarly for foreign companies looking for Dutch capital, institutional consolidation translates to fewer meetings with more at stake.
Dutch institutions are also adopting a more focused investment style. The country has a hearty pension fund industry which is mainly funded by the private sector. The equity portion of pension funds used to be very diversified but they are now homing in on specific industries and sectors, such as telecoms. Corporate pension funds are also starting to use specialist services, like ING Barings or ABN Amro, to manage their funds.
Schism
For a country that provides health coverage for sex change operations, the Dutch financial community appears very conservative. In general, Dutch investors are looking for quality investments. Like many countries in the EU, the market has had its fill of over-inflated technology stocks. While interested in investing abroad, Dutch institutions are more likely to look at foreign companies that have ties to the domestic market or have partnerships with Dutch companies.
‘From what I see, institutions are only investing directly abroad in the bigger companies,’ says Van Vedenburch. So for small-caps without any Dutch activities there’s probably not much point in visiting. ‘When it comes to specialist sectors, like telecoms or small caps, institutions will often buy into or even give some of the money to a foreign fund to manage,’ Van Vedenburch adds.
Amsterdam does offer some distinct possibilities for foreign large caps, but the approach must be targeted. Consolidation of large institutions has reduced the choice to around five or six to visit. And institutions are also narrowing their focus, so it’s important to research potential targets to discover their interests. As Van Vedenburch says, ‘You can no longer shoot and hope that one or two institutions will be interested because you’re likely to hit a brick wall.’
Cross-country travel
While Amsterdam remains the main meeting center for Dutch analysts and institutions, there are also large institutions scattered across the country. ABP, the largest Dutch pension fund, is in Heerlen; and the Philips pension fund is in Eindhoven. Other examples are Fortis, in Utrecht; and Aegon and ING Investment, both in The Hague. Traveling by train, it’s possible to coordinate four or five meetings around the country in a day. Key meeting spots for institutions outside Amsterdam include: Utrecht, Maastricht, Eindhoven, Rotterdam and The Hague.
Most institutions expect companies to visit them and prefer one-on-one meetings. However, in the south, which is home to around nine institutions, group meetings are appropriate, though fund managers usually prefer to meet in small groups. In terms of style, it’s best to have a straightforward presentation that runs no longer than 30 minutes, but schedule a longer session for an introductory meeting.
The Dutch financial community draws a clear line between business and pleasure – the US-style breakfast meeting is not an accepted part of business life, and the Dutch do not respond well to a long boozy lunch. In fact, the best approach with this crowd is to schedule a late afternoon meeting, around 4 pm.
When scheduling a meeting for a large group, choose one of the larger hotels in Amsterdam. The Hotel Krasnapolsky is located right in the heart of the Dam, the city’s main center. Another popular choice is the stately Grand Hotel. Closer to the airport, the Hilton and the Okura are good choices as well. ‘The Okura has an excellent Japanese restaurant,’ notes Van Vedenburch.
Getting press
The Dutch media cover stories about foreign companies that are clear competitors of a Dutch company or are otherwise related to the domestic market. So the best approach is to find some local connection. The daily afternoon paper, NRC Handelsblad, will report on year-end and quarterly earnings of the very big foreign companies.
IROs looking to catch up on local financial gossip should go for a beer in the Spui area. It’s here that Amsterdam’s financial set go to let off steam and talk about the day’s action. Dutch conservatism gives way to barroom banter in these hallowed drinking holes where the lines between business and pleasure are finally blurred.
