Experts are urging IR professionals at small and mid-cap companies to produce better websites that showcase their investment cases and business models for potential investors in light of Mifid II.
The comment follows a webinar hosted by the UK’s IR Society on Wednesday this week, in which experts reviewed the events of the past 12 months and discussed ongoing concerns for 2019. The experts were Morgan Stanley’s managing director Ben Grindley, AXA Framlington fund manager SimonYoung and IR Society chair David Lloyd-Seed.
The immediate takeaway message from the panel concerned preparedness, especially in a Mifid II world where investor behavior is starting to change. All panelists agreed that in 2019, IROs will start to see the real impact of the regulation. For firms that are experiencing a decrease in sell-side activity, the experts suggested that IR professionals do more to improve their online presence.
‘Websites are very important – they’re your window to the world – and people should think more carefully about them, especially the layout. They should be quick and easy to use so investors can get the information they need,’ Young said.
To target investors, he advised that certain information should live on the website. He said businesses should show ‘clearly on their website their investment case, how it makes money and what the financial highlights are over X number of years.’
Young added that IR teams need to take a fresh look at their investors and target list to better understand how to allocate resources in a post-Mifid II world.
‘First, recognize that every sector and company is different – spend more time thinking, Where am I going to get a bang for my buck in investor targeting?’ he said. ‘Second, think about whether you are spending enough time with both your existing [investors] and key prospects – and do they really understand the business?
‘It sounds very simple but we’re in a time of real change in the equity market and the available pool of capital. Companies are changing in some pretty important ways and being on top of that will generate rewards in terms of investor attention and care.’
Grindley agreed: ‘Quite a lot of buy-side [investors] will have to pick up their bills [due to Mifid II], which will impact who they talk to. So where they spend their time or commission dollars will become even more apparent in 2019.’
Young pointed out that when IROs have an opportunity to be in front of an investor they should ‘use it to get feedback about what their firm is doing well and not doing so well as a business. That will often turn a potential investor into a buyer of your shares.’
Lloyd-Seed concluded, saying that IROs should always be thinking about ‘helping investors to mitigate risks’ and always be consistent about their online approach.
