At a recent IR Magazine event in Palo Alto, the subject of investor targeting dominated one of the panels. During the panel, Anne Chapman, managing director at Joele Frank, shared some recommendations for issuers looking to target investors, based on the years she spent working at Capital Research, part of Capital Group, which manages $1.7 tn in assets.
Chapman focused on the firm’s proxy voting efforts, liaising with investment analysts and portfolio counselors. During this time, she experienced good and bad targeting and engagement efforts from issuers.
The most important aspect, she says, is to tell an interesting story that continues to evolve: ‘Hardly any company stays static. How is your company evolving? Discuss the evolution of the company and what’s changed since you last spoke with that investor. And prepare for the audience you’re speaking to: if the outreach is investment-focused, talk about strategy. If you’re contacting the governance people, focus on governance and compensation.’
Whether you’re targeting new investors or looking to engage with existing investors, Chapman emphasizes the importance of doing your research and tailoring the outreach accordingly. ‘Most large and mid-range shareholders put information on their websites about what they’re looking for,’ she points out. ‘It doesn’t take a lot of time to do that research.’
It’s certainly the case that too much outreach can be a bad thing, she adds. ‘When a company reaches out and schedules something, and you get there and it asks, So what are you thinking?, your first thought is, Why am I here? Having an agenda of at least one or two keys things that you’d like to get an opinion on is important – whether that’s focused on the investment side or the governance side.’
While technology can also be a useful tool in engaging with potential and existing shareholders, Chapman cautions against taking a generic one-size-fits-all approach to electronic communication. ‘Do investors want an email every time you update the website?’ she asks. ‘Having been the recipient of those emails, [I’d say] heavens no! There is a happy medium. While social media and videos haven’t really taken off yet, having those resources available can help me prepare for a meeting.’
Ultimately, though, Chapman still recommends attending industry conferences as the best way to meet new and existing investors.
