Rob Kosowsky, senior analyst and assistant portfolio manager at Royce Funds, will serve as one of the judges for the second IR Magazine Awards – Small Cap US. Kosowsky has 17 years of capital markets experience, having previously worked at Sidoti & Company, OFI Institutional Asset Management, Ballentine Partners and Thomson Financial. We caught up with him to hear what he thinks makes for good small-cap investor relations.
Nominations for the IR Magazine Awards – Small Cap US are open until July 13 and can be submitted here.
What makes small-cap investor relations unique?
In the small-cap space there are thousands of companies and each has its own story. It runs the gambit in terms of the opportunities you’re looking for: there are tremendous numbers of high-quality companies but also some very speculative opportunities. Small-cap and micro-cap IR are of paramount importance because you need to distill your story in a concise manner. There are literally thousands of companies trying to do that.
What makes for good small-cap investor relations?
The first major thing is disclosure. It’s very helpful when you look at disclosure to get all of the pertinent information – who the company’s customers and competitors are, for instance. You need a functioning IR section on your website that includes conference call transcripts. A lot of companies don’t even have a conference call, which we don’t understand. Crafting a concise, well-disclosed investor presentation and making sure it’s available on the website is always helpful.
Second, access to management is very important, especially the CEO and CFO. These are small companies that have a limited amount of capital and the range of outcomes is very wide. Really getting to know management team members and what their thoughts are is very important because management teams can have an outsize impact on small-cap performance.
How often do you expect to meet with your portfolio companies?
Generally speaking we like to talk to them at least once or twice a year. Obviously if something changes – they complete an acquisition, sell a business or sales go down 20 percent, for example – we want to get a better sense of what’s going on because if anything extraordinary occurs we’d like to understand what happened and why. But you can also have management teams that reach out too often. Some teams want to be as transparent as possible but meeting them every quarter might be too much.
Nominations for the IR Magazine Awards – Small Cap US are open until July 13 and can be submitted here.
