Q. I am a senior executive in an IR firm. One of my major clients recently hired a well-qualified VP of investor relations who has worked on both the buy side and sell side and is a CFA to boot. I confess to feeling rather intimidated and dread the day that he starts work. How should I approach him?
A. Your new client may be a paragon of virtue and have a very impressive CV, but he will undoubtedly have growing pains in his new job. However capable he is, he will still only have 24 hours in his day, just like you and me. Equally, there are bound to be budget restrictions on how many people he can hire. I would therefore suggest that you arrange to see this wunderkind at the earliest possible opportunity and instead of dazzling him with your strategic capability, acknowledge his potential contribution and outline how you can assist with delivering logistical support. Arrive for the meeting armed with a synopsis of the company’s IR strategy over the previous five years along with the feedback you’ve gathered plus analysis of major share ownership movements. This way you position yourself and your firm as an effective subcontractor and working partner. Over time you will be able to demonstrate that you are pretty good at strategy as well.
Q. I work in-house for a medium-size UK company which retains two corporate brokers. I’m sure they should be of great help to me in the IR department, especially since they have such great access to fund managers. But they seem very snooty and only ever communicate with board members. They rarely even return my telephone calls. How can I get them to be more cooperative?
A. Next time you have five minutes with your finance director, mention how envious you are of your peers at Emap or Kingfisher, two companies among many that receive excellent IR support from their corporate brokers. When he asks you to explain, praise your brokers for their market knowledge while saying what a shame it is they don’t share it with you very often. Point out that most companies these days get more for their money by using the IR executives at corporate brokers to selectively leverage the best of their buy-side knowledge. But it’s annoying that they only seem to share this knowledge during deals. Getting your finance director involved means the pressure on your corporate broker will come from the person who pays their bills, and you may start to get more for your corporate broking fees. I can’t think of a corporate broker (apart from the very small ones) that doesn’t have an investor relations team, so find out who runs it and appeal to them directly as well as through their broker colleagues.
Q. I am in charge of IR at a large US company and find it annoying to be constantly hit on by independent IR consultants of all types trying to sell me their wares. How can I convince them that our decisions on suppliers are based on careful consideration rather than who I might have met over a golf game? And how can I avoid them at investor relations conferences?
A. Two suggestions. First, mount an effort to repel all boarders with a standard letter that thanks the provider for their call or letter but explains that you review all service providers once a year and will consider them then. Suggest a vague time – such as ‘the spring’ – then send out another standard letter each March telling everyone they were not successful at attracting you as a client. You may have to go on vacation every February! At conferences, there is a simpler solution. Choose a supplier who you like and have known a while, and stick to them like glue. Service providers may be brazen, but they would never hit on you in the presence of a competitor.
