The investor conference schedule may seem dominated by the big sell-side investment banks that choose who presents and who attends. But there are other options for companies – and a way to combine these events with sell-side conferences to maximum advantage.
No one can deny that a sell-side conference is a powerful way to get in front of key members of the investment community. But one of the drawbacks is the limited control afforded to presenting firms, with banks often inviting only their own clients and giving priority to their favorites, including hedge funds.
‘Investment banks do a fine job of hosting conferences, but they always put their interests first and those of public companies second,’ points out Gerald Scott, president and founder of the New York-based Wall Street Analyst Forum (WSAF).
‘Sell-side investment banks probably won’t let any other sellside representatives attend their events and will probably invite only the buy side,’ adds Bill Moyer, vice president of capital markets at the Independent Petroleum Association of America (IPAA) in Washington, DC.
Some of the other conference options available include those hosted by trade associations, securities analyst societies, independent conference organizers and smaller investment banks that also perform an IR function. There are also DIY events held by groups of companies or dinner presentations for small groups of analysts.
Pay to play
The WSAF, a three-day event held regularly in New York, is one example of an independent conference.
Around 50 firms present to an audience of 300 buy and sellside analysts, portfolio managers, independent researchers and financial press. In addition, companies may invite their own roster of analysts and portfolio managers.
The cost per firm is $3,900; the audience attends for free. The idea behind the conferences, according to Scott, is to add more value for the presenting companies by being impartial, opening the event to the whole investment community, and harnessing media tools to broaden reach. The WSAF recently added two new features not available at investment bank conferences: posting CEO interviews on TheStreet.com and posting transcripts of a firm’s presentation and Q&A on Yahoo! Finance and Google Finance.
‘Analyst conferences will increasingly be defined by those that leverage the use of new media to reach professional investors,’ comments Scott. Germán de la Roche, CEO and founder of Arch Investment Conferences, which has events in New York and San Francisco, agrees that the impartiality of independent conferences is important to presenting companies.
‘There are various hybrid conference organizers that provide investment banking services as well as hosting events for their clients,’ he says. ‘Being neutral, however, we don’t represent any of the companies that present and we don’t have any stock invested in them – so we can offer a very different service.’
What makes Arch conferences unique, according to De la Roche, is their panel format: company executives take part in a Q&A session with a panel consisting of a variety of analysts, hedge fund managers and financial editors. Just four to eight companies present at any event, with only one company presenting at a time. The cost per company is $6,250.
The IPAA boasts its own independent events, which cost $3,750 each for companies. ‘Ours is a neutral conference and all our members can attend; it’s not by invitation only,’ explains Moyer. ‘Whoever registers before we’re sold out can present – that’s the big selling point. We also market the event to the entire buy and sell-side community.’ Buy-side and sell-side pros attend for free while other attendees, including corporate executives, have to pay.
Springboard to coverage
For emerging companies, these events can also be an ideal springboard to greater coverage, notes Mark Warren, director of IR at Alabama construction materials company Vulcan Materials. ‘A few years ago we had just four or five analysts covering us, so the opportunities to present were limited, and I couldn’t get Vulcan into sell-side conferences where we weren’t covered,’ he says. ‘The WSAF provided an opportunity for us to tell our story at a conference.’ Vulcan now has eight analysts covering it and six conferences on its calendar this year.
It’s important to pick the right conference to suit the firm’s size and stage of development. Some events, such as Arch’s conferences, are designed only for small and micro-caps. ‘Once a company gets really large, we no longer offer the best value for them,’ explains De la Roche. The WSAF event can serve as a springboard for small caps but has also had GE and Nokia attend. According to Moyer, the IPAA events sometimes have companies attend that are already being covered by 20 or 30 analysts.
‘Independent conferences, where there isn’t the lure of investment banking business involved, are a different experience for companies,’ comments Steve Chizzik, executive vice president of UK-based Equity Communications. ‘Most of the companies that present at the big mainstream conferences are there because the investment bank sees an opportunity for banking business. At independent events, companies are there to present their story, with no ties or expectations.’
