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Meeting Institutional Investors in Scotland
A few insights and tipsPaul Heward
Investor Relations Society (UK)
The rationale
Repeating Owen Kelly:
• £750bn of funds are managed directly in Scotland• £250bn invested worldwide in equities and bonds• 4th largest investment centre in Europe• Extensive fund management expertise &
experience• Leading firms include: AAM, BG, MC, SLI, SWIP
A few more points
• Leading firms include global equity specialists (and other firms do too)
• They not only hold US/global equities but have US and Canadian pension fund clients
• These fund managers are long term fundamental buy and hold investors. To give an example, one institution uses 5 year cash flow projections and through the cycle valuations
• You can, therefore, expect a better level of questions, more shareholder engagement and longer term interest
• These are important factors when companies want to raise capital or defend themselves
A few more points
• Reputation for longer-term investing (e.g.
Walter Scott- 5 to 7 years)• 4th largest investment centre in terms of
“actively-managed” funds• Don’t forget “boutique” investors - Edinburgh
Partners, Artemis, Aberforth • Don’t forget debt investors. These include SLI,
BG, SWIP, AEGON
Investors wantA few quotes…(1)
• “We value co’s coming here and try very hard always to meet any company that makes the effort.”
• “Meetings with CEOs are invaluable.”• “Our personal preference is to have a
conversation as opposed to being presented to (but always good to have a presentation to hand , just in case).”
Investors wantA few quotes…(2)
• “We make it very clear to banks or brokers who may be assisting with meetings that corporate access is our main criterion.”
• “We prefer for bankers and brokers not to attend company meetings.”
• “We would love to see companies being a little more proactive in terms of providing access to management to genuine long term investors, whilst restricting access to short-term trading oriented investors.”
OK- So what should I do?
• How do I organise it?• Do I use a broker or bank?• Who should I see?• Where and when should I go?• How often?• “Do’s and Don’ts”
How do I organise it?
• You know how to set up road shows• You should be able to identify the key investors,
without much difficulty• But you are very busy and may be on other road
shows; therefore, it may help to have UK- based person to facilitate programme
• Important to do this with reasonable notice• Always allow for contingencies and remember to
have a “Plan B”
Where and when should I go?
• Just concentrate on Edinburgh - almost all the big firms are based here
• Others (e.g. Alliance) will come to see you• Logistics -Easy access from London / short
distances/ less “dead” time • One day is OK/ arrive previous evening• Most of year is OK but most important to
check first if key contacts will be there
Do I use a bank,broker or independent consultant?
• May depend on your corporate relationships• Remember client lists can be restricted
(due to commission/ fee arrangements)• Therefore, some will not give you access to
all the investors you should be seeing• Some investors will not want the broker/
banker to attend meeting • Helpful to get feedback from meetings • What are you paying for?
Who should I see?
• Does depend on your company• Initially target “BIG 5” – SLI, SWIP, BG,
AEGON, Martin Currie• Then refine your target list, referring
to your register, investor holdings in peer co’s, known “expertise” etc
• Include “boutique” and others in lunch
How often?Fund manager quotes
• “Senior management visiting, perhaps, once a year to talk about their strategy is very helpful.”
• “Visits after each quarter’s results to update on margin guidance is wholly unnecessary- this can be communicated via earnings releases and conference calls”.
• “It may take us a long time to get to know the company and its management. It may require three or four meetings before we decide to invest”
• “Don’t be put off if there is no instant investment decision”
“Do’s and Don’ts” (1)Do’s • Ensure “right manager” will be there• Allow enough time between meetings• Ensure that there can be a good dialogue• Try to establish a regular pattern of visits• Think about building long term relationships• Respond quickly regarding any points raised but
not answered in meeting
“Do’s and Don’ts” (2)Don’ts• Be late • Assume they want presentation• Stop person with best command of
English language from taking part• Leave gifts
Conclusion
• “Numerous management teams have said that Scotland tends to provide different type of meeting to London- often with more focus on longer term issues”
• “Meetings should be a two way process – with both the investor and the company feeling that they have something to gain in the exchange”
The IR Society Est. 1980• The Investor Relations Society (IR Society) is a
membership organisation that exists to promote best practice investor relations in the UK and beyond. It is run by IR professionals for IR professionals.
• We have approximately 600 members from the UK, Europe and beyond, including representatives from most of the FTSE 100, a large number of FTSE 250 companies and a number of AIM and smaller companies as well as IR advisors and service providers
• To become a part of the UK’s forum for IR professionals contact [email protected]
Paul Heward – Contact DetailsPaul HewardInvestor Relations Society, Scotland Representative 22 Young Street, Edinburgh, EH2 4JB 44 (0)131 220 5995 44 (0) 7770 [email protected]
Also:Burvale Consultants, Scotland:Burvale provides clients with a comprehensive mix of investor
relations services. 44 (0)131 220 5995 44 (0) 7770 [email protected]
