Post on 04-May-2018
Client TrainingClient TrainingGlobal Equity Services
Reaching Out to Investors: Effective RoadshowsJuly 2009Jessica F. Anderson1-212-2503102Jessica.anderson@db.com
1 Reaching Out to Investors1. Reaching Out to Investors2. 2009 in Perspective p
Jessica F. Anderson · July 29th, 2009 · page 2
Reaching Out to InvestorsgHitting the Road!
Jessica F. Anderson · July 29th, 2009 · page 3
Wh t th i th d f i tWhat are the primary methods of investor communications?
Investor website
Press releases
C f ll / b t Conference calls/webcasts
Conferences– presentation tracksp– panel discussions on a sector or regional theme– one-on-one meetings
Group functions Group functions
Roadshows
Jessica F. Anderson · July 29th, 2009 · page 4
Wh t th hi h i t t h ld b id d?What other high impact events should be considered?
Site visits and analyst days can:
Broaden appeal to investors Differentiate delivery of message Differentiate delivery of message Whole investor days including top management as well as the divisional heads
(incl. webcast) Site visits help the investor get a better understanding of the company’s core
business Roundtable discussions with senior management can be organized in the main g g
cities of the most important capital markets’ main cities ( London, New York, local market financial center)
Presentations on the specific divisions in the framework of analyst meetings after the publication of results
Jessica F. Anderson · July 29th, 2009 · page 5
Wh d h ?Why roadshow now?
Accessibility, responsiveness, transparency are critical at this juncture
Credibility is key
Di t i ti ith t h h ld i i it Direct communication with top shareholders is a priority
Market conditions and impact on the investment community also provide select opportunities for targeting new investors
Communications during this period sets the tone for future relationships
Intelligent targeting and outreach can pay rewards in the future
Insights into market conditions and sentiment are important internally
Jessica F. Anderson · July 29th, 2009 · page 6
O i i d h h d it?Organizing a roadshow – who does it?
Sellside with analyst coverage
Non-covering broker
ADR/GDR B k ADR/GDR Bank
Investor relations firm
Companies directly Companies directly
Jessica F. Anderson · July 29th, 2009 · page 7
Wh t th f t t id i i diff tWhat are the factors to consider in comparing different approaches to roadshows?
Familiarity with the company
Distribution capacity
I t t i i k ti h Investment opinion vs. marketing approach
Who is the client?
Range of associate products / services Range of associate products / services
Cost to company
Jessica F. Anderson · July 29th, 2009 · page 8
Wh t ll id fi t ki i t id ti iWhat are sellside firms taking into consideration in terms of coverage and marketing decisions?
Where traded
Liquidity
M k t it li ti Market capitalization
Marketability
Ability to provide differentiated coverage or investment/trading call Ability to provide differentiated coverage or investment/trading call
Ability to get paid
Sellside firms have a limited number of companies they can cover, however your company can still benefit from roadshow support with or without coverage!coverage!
Jessica F. Anderson · July 29th, 2009 · page 9
Wh t h ld i l k f i b k hWhat should companies look for in a broker when partnering for success?
Review the coverage universe and your company’s position within it
Match broker specialty and client base to the part of your investor base you want to increase – regional approach sector focus turnover location ofwant to increase regional approach, sector focus, turnover, location of investor, domestic interest, cap size specialty
Evaluate flexibility in matching the opportunity from the broker side with a company’s investor relations strategy and goalscompany’s investor relations strategy and goals
Gauge the character of the sales team – ie commitment to the company and understanding of the story
Consider the ease of communication and timely communication
Jessica F. Anderson · July 29th, 2009 · page 10
H b k ithi th i b k ’ bl tHow brokers within their banker’s secrecy are able to help you ….
A broker will not be able to explicitly tell
you who bought/sold
your share butyour share but can include
them in your roadshows
Jessica F. Anderson · July 29th, 2009 · page 11
Wh t i t l ki f h iWhat are investors looking for when accessing management?
Introduction to an investment opportunity
Update on a company strategy and financials – post-results / corporate activity
C titi i i ht i t ifi k t d i d t i Competitive insight into specific markets and industries
Commentary on financial crisis and economic impact to company, sector, country, as well as financial and operational flexibility under different scenarios
Try to roadshow when it will be of relevance to the institutions, not just the company, and remember to create a dialogue with the investor!company, and remember to create a dialogue with the investor!
Jessica F. Anderson · July 29th, 2009 · page 12
P i f tiPreparing for meetings
Ensure proper briefing on:– investment style, turnover, AUM, investment decision making process or timeframes,
any relevant fund restrictions or mandates– attitude towards and knowledge level of the industry, region, peers, and the company
it lfitself– current status as a shareholder or past holding, if applicable– technical factors
Use the broker to pre-brief institutions on:– Management
Current issues– Current issues
– Purpose of roadshow
Consider sending out slides ahead of the meeting, along with investor pack materials
Jessica F. Anderson · July 29th, 2009 · page 13
Effective use of management time – maximise the resourceCreating an ideal schedule
Balance the need to see existing holders with the desire to access new investors– Balance the need to see existing holders with the desire to access new investors and create new buyers
– Use a combination of one-to-ones and group meetings– Schedule as many meetings as possible within the logistics, but don’t scheduleSchedule as many meetings as possible within the logistics, but don t schedule
meetings for the sake of it– Understand how strenuous the process is, use a two-man speaking teams to keep
management as fresh as possible
Use the right team– Suitably senior (CEO/CFO) to see top shareholders– IRO for missionary meetings and smaller shareholdersIRO for missionary meetings and smaller shareholders– Consistency is key – can take 2-3 years to build a track record and solid credibility
Manage the meetingReconfirm the level of institutional knowledge at the outset of the meeting– Reconfirm the level of institutional knowledge at the outset of the meeting
– Presentation format should be flexible to cater for different levels of understanding– Presentations should last 20-30 minutes with plenty of time for Q&A
Clarify any next steps or follow up assess addition to company’s distribution list
Jessica F. Anderson · July 29th, 2009 · page 14
– Clarify any next steps or follow-up, assess addition to company s distribution list
Sh t t f llShort-term follow-up
Encourage institutions to feedback any comments either to the broker or the ’ IR t tcompany’s IR contact
– the investment thesis– company strategy
i l ti– view on valuation– management or IRO communication and credibility– catalysts to buy, sell or adjust a position
Immediate purchases of shares should not be anticipated– weightings/sector allocation may drive investor behaviour
investors may put a stock on their ‘watch list’ for a period before investing– investors may put a stock on their watch list for a period before investing– institutions may need to seek investment board approval– investors looking for a more attractive stock price entry point can be an
important source of future demand should share prices dropp p p
Jessica F. Anderson · July 29th, 2009 · page 15
L t f llLong-term follow-up
Prioritisation of investors– Following a 20/80 model, knowing that 20% of your shareholders influence 80% of the
trading flow and/or changes in the shareholder structureS t ti f T 20 50 i t ith h IR t i l t t– Segmentation of Top 20 - 50 investors, with whom IR stays in a regular contact (maybe once a week). Similar treatment as most important sell-side analysts are treated
Implementation of an investor database (incl all important information as e g Implementation of an investor database (incl. all important information as e.g. meeting notes, last contact date, major investor concerns, etc)
Continuous identification of additional target investors P i di i f d hit Periodic review of surveys and white papers Semi-annual or yearly shareholder identification projects Participation in annual awards and rankings (IR Magazine, IR Society UK,Participation in annual awards and rankings (IR Magazine, IR Society UK,
IRGR etc.) Yearly or bi-annual perception studies
Jessica F. Anderson · July 29th, 2009 · page 16
2009 in PerspectivepThe Impact on Roadshows
Jessica F. Anderson · July 29th, 2009 · page 17
Marketing your equity: developments this quarter
Market recovery: bear market rally or “real” turn in the market ?
Institutional investors return to buying– New decision makers are common (visit owners again)– Less inter-segment differentiation (comparable ownership analysis works)– Substantial “dry powder” to invest (cash levels historically high)
Hedge funds, smaller, operate cautiously and differently
Management teams re-emerging to visit investors
Europe and Canada remain the best opportunities for new investment
Jessica F. Anderson · July 29th, 2009 · page 18
Current equity market conditionsPrimary equity indices Volatility index
120
708090
100110120
pric
e pe
rform
ance
45
55
65
75
85
X pr
ice
405060
Jul-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09
Inde
xed
p
Dow S&P 500 Nasdaq15
25
35
45
Jul-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09
VIX
Equity issuance Monthly fund flows
$
$50
100
120 (0.5)
12.4 9.6
$0
$20
$10
$20
$30
$40
Tota
l issu
ance
($bn
)
20
40
60
80
100
No. of deals
(12.6)
(40.9)
(80 1)
(38.7)
(20.9)(31.2)
(52.7)
(5.4)
(24.9)
($80)
($60)
($40)
($20)
$0
($bn
)$0
Jul
Aug
Sep
Oct
Nov
Dec Jan
Feb
Mar
Apr
May Jun
0
Convert Follow on IPO
(80.1)($100)
Jul-0
8
Aug-
08
Sep-
08
Oct
-08
Nov
-08
Dec
-08
Jan-
09
Feb-
09
Mar
-09
Apr-
09
May
-09
Jun-
09
Source: CapitalIQ, Deutsche Bank Capital Markets and TrimTabs
Jessica F. Anderson · July 29th, 2009 · page 19
Reasons for equity optimism
6
7Equity Funds Money Markets 5.2
5.6
Cash Holdings by Equity Funds
3
4
5
4.0
4.4
4.8
g y q y
0
1
2
Trill
ions
2 8
3.2
3.6
Cash holdings were at an 8 year high in
Jan-
08
Feb-
08
Mar
-08
Apr
-08
May
-08
Jun-
08
Jul-0
8
Aug
-08
Sep
-08
Oct
-08
Nov
-08
Dec
-08
Jan-
09
Feb-
09
Mar
-09
Apr
-09 2.8
Apr
-07
Jun-
07
Aug
-07
Oct
-07
Dec
-07
Feb-
08
Apr
-08
Jun-
08
Aug
-08
Oct
-08
Dec
-08
Feb-
09
Apr
-09
18
20
18
20
NYSE Short Interest (bill shares) g y gFebruary
Money market funds have more assets than equity funds for the first time since Feb 199310
12
14
16
10
12
14
16
Short interest remains historically high
• Hedge fund outlook
• Substantial potential demand0
2
4
6
8
0
2
4
6
8
Jessica F. Anderson · July 29th, 2009 · page 20
0
Apr-9
5
Apr-9
6
Apr-9
7
Apr-9
8
Apr-9
9
Apr-0
0
Apr-0
1
Apr-0
2
Apr-0
3
Apr-0
4
Apr-0
5
Apr-0
6
Apr-0
7
Apr-0
8
Apr-0
9
0
K fi di f D t h B k H d F dKey findings of Deutsche Bank Hedge Fund survey
While the hedge fund industry has become smaller over the past year, it remains a key asset class for a large numbers of investors 72% ofremains a key asset class for a large numbers of investors -72% of respondents continuing to believe that investing in hedge funds is a useful way to diversify their portfolios.
Shifts in investor attitudes may impact operational strategies Appetite forDeutsche Bank’s 2009 Alternative Investment Shifts in investor attitudes may impact operational strategies. Appetite for
leverage has decreased significantly. Some 72% of investors have reduced their exposure to leverage, and 63% are not interested in applying leverage to their own portfolios.
Survey incorporates the responses of more than
1,000 investors, including pension funds, insurance
companies and fund of A premier league of hedge funds seems to be emerging with half the
respondents investing in hedge funds with an average of between USD 800m and USD 4bn AUM, and a decrease in investors putting money into funds with less than USD 100m
companies and fund of fund companies,
representing some USD 1.1 trillion in assets globally. This is the
most extensive survey of hedge fund investor less than USD 100m.
Investor appetite for managed accounts has increased, with 43% of investors now considering making a proportion of their investments through managed accounts.
of hedge fund investor sentiment in the
industry
In terms of manager selection, risk management has moved up to become the second most important factor, with transparency becoming a top 5 factor for the first time ever. Historically, investors have indicated the “3 Ps”: Performance,
Jessica F. Anderson · July 29th, 2009 · page 21
Philosophy and Pedigree.
18
20
18
20
Short interest vs hedge fund deleveraging
0%
10%
8
10
12
14
16
8
10
12
14
16
NYSE Short Interest (bill shares)
-30%
-20%
-10%
0%
0
2
4
6
8
0
2
4
6
8Cumulative % Decrease in Lending
-60%
-50%
-40%
30%
60%
0
Dec
-07
Jan-
08
Feb-
08
Mar
-08
Apr-
08
May
-08
Jun-
08
Jul-0
8
Aug-
08
Sep-
08
Oct
-08
Nov
-08
Dec
-08
Jan-
09
Feb-
09
Mar
-09
Apr-
09
May
-09
0 %
Dec
-07
Jan-
08
Feb-
08
Mar
-08
Apr-0
8
May
-08
Jun-
08
Jul-0
8
Aug
-08
Sep
-08
Oct
-08
Nov
-08
Dec
-08
Jan-
09
Feb-
09
Feb-
09
Mar
-09
Apr-0
9
May
-09
Deleveraging Vs Short Interest
0%
20%
40%
-60%
-40%
-20%
Jessica F. Anderson · July 29th, 2009 · page 22
Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09
Mutual fund ownership dynamics30
40Cumulative % Change - AUM vs S&P 500
250,000
Average Filed Assets Under Management ($mm)
-10
0
10
20
100 000
150,000
200,000
-50
-40
-30
-20
Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-090
50,000
100,000
1,600
Average # of positions greater than USD 5M
AUM S&P 500Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
16%
% New Positions in Overall Portfolio
1 300
1,400
1,500
8%
10%
12%
14%
1,100
1,200
1,300
2%
4%
6%
8%
Jessica F. Anderson · July 29th, 2009 · page 23
1,000Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Most
Recent
0%Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-09 Most
Recent
Thank you!y
Jessica F. Anderson · July 29th, 2009 · page 24