As ferramentas de Targeting
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Transcript of As ferramentas de Targeting
Capital Precision Ltd
Investor Targeting – Theory and Practice
Capital Precision
� We specialize in helping Companies (and their Advisory Banks) identify
who are the beneficial owners of their shares, who manages the
investment decisions and who to target as new investors
� We are employed for both Investor Relations and Corporate Transaction
projectsprojects
� We work for approx 200+ Blue Chip companies and 24 Banks
� 50+ years of collective experience
� Awarded the contract to provide CMI Services to the London Stock
Exchange IR Solutions team, Nov 2005
2
Targeting – A Complex Challenge
� What will happen if you take management on a world
tour of investment centres and no-one buys the shares?
� What shareholder structure are you trying to achieve?
� How do you decide where to go?� How do you decide where to go?
� How do you decide who to meet with?
� What criteria did you use to evaluate your targets?
� How do you know if it was successful?
Know your customer
� Who is the customer?
� What is motivating them to buy (or sell)?
� What do you need to do to keep them?
Targeting is a marketing discipline
� What do you need to do to keep them?
Where do you find more of the same?
� How do you determine where they are and what will motivate them to buy?
� How do you measure whether your IR Programme is working?
4
Targeting is about prioritisation
� There are over 40,000+ funds under management around
the world, you cannot meet them all
� The challenge is to filter the 40,000 down to the investors
who are going to be most interested in your investment
story
Targeting is about achieving a balanced
shareholder base?
Stability or turnover? Passive or active?
Hedge Fund
Income
Country/
Sector Focus
Yield Broker
Dealer
Aggressive Low
High
Index
Hedge Fund
Value
GARP
Growth
Aggressive
Growth
Low
Medium
Investor Targeting – The objectives
� Maximize demand for the shares – This cannot be achieved if it is left to the market to determine who will be buying your shares
� The challenge is to find investors whose investment profile matches your future investment proposition
� The challenge is to find investors whose investment profile matches your future investment proposition
� The better the Targeting, the better control there is over the shareholder structure
Targeting – A Strategic Planning
discipline
� In an ideal world a company would have a clear objective
of the types of shareholders they would like to have in the
future
� The targeting process should be based upon anticipating � The targeting process should be based upon anticipating
what is likely to happen and not based upon what has
happened
� The targeting process must be measurable
� Is there a transaction anticipated?
� Who will support the company in the transaction?
� Who holds the voting power?
� Do you want more passive or active investors?
� Are you looking for liquidity or stability?
Structuring the shareholder base
� Are you looking for liquidity or stability?
� Are you looking to diversify the shareholder base?
� Which shareholders are likely to rotate out and when?
� Which current investors could buy more shares?
� Who is not investing yet but could be?
� Which investors could be activist?
� Where are the strengths and weaknesses in the shareholder base?
9
The starting point for a Targeting Programme
� Step 1 - The “stock take” – Where are you now?
� Does your shareholder base reflect what you believe to be what you represent to the market?
� The first step is to have a clear understanding of who is already � The first step is to have a clear understanding of who is already holding your stock and why.
� The second step is to identify which shareholders could rotate out of the stock in the future
� The third step is to determine the impact that this selling activity is likely to have on liquidity and smaller investors
Investors Geographic Distribution
% Outstanding Standard Deviation% Outstanding
2.1
-3 -2 -1 0 1 2 3
28%
38%
0% 10% 20% 30% 40%
Domestic
High-Risk TypicalClient Value Peer Median
-0.2
-1.3
0.3
-0.7
18%
9%
5%
35%
20%
13%
4%
30%United
Kingdom
Rest of World
North
America
Cont. Europe
Investor Geographic Distribution
� Although increased foreign investment is often very much desired, dependence on any one region for support can have significant impact on the turnover of your shareholder base.
� Geographic considerations� Geographic considerations
� Perceived strength of your company’s country or region
� Regional/Global stability concerns
� Currency strength/weakness
� Governmental and/or regulatory impact
Concentration of Shareholders -
% Outstanding Held by Top Investors
2.2
-3 -2 -1 0 1 2 3
22%
35%
0% 20% 40% 60% 80% 100%
Top 5
High-Risk TypicalClient Value Peer Median
% Outstanding Standard Deviation% Outstanding
0.2
0.2
0.6
63%
85%
39%
60%
80%
45%
Top 10
Top 25
Top 50
Concentration of Shareholders -
Regional Breakdown of % Outstanding
Held by Top 25
% Outstanding Standard Deviation% Outstanding
2.6
-3 -2 -1 0 1 2 3
15%
27%
0% 5% 10% 15% 20% 25% 30%
Domestic
High-Risk TypicalClient Value Peer Median
-0.4
-1.4
0.0
-0.3
7%
14%
3%
14%
9%
19%
3%
12%United
Kingdom
Rest of World
North
America
Cont. Europe
Domicile of Top 25 Holders
% Outstanding Standard Deviation% Outstanding
1.8
-3 -2 -1 0 1 2 3
35%
60%
0% 20% 40% 60% 80%
Domestic
High-Risk TypicalClient Value Peer Median
-2.8
-1.3
-2.1
-0.9
5%
15%
5%
19%
15%
22%
9%
15%United
Kingdom
Rest of World
North
America
Cont. Europe
Concentration of Shareholders
� Although it is often typical and potentially beneficial to have a few “anchor” investors at the top of the shareholder register, a shareholder base that is too concentrated can be cause for concern.
� Pricing impact
� Potential to trade in large blocks in the event of a bid or corporate action
� Disproportionate affect on voting
� Lower “real” float; liquidity
� Higher likelihood of regional concentration (as per previous page)
Size of Investing Funds
0.7
-3 -2 -1 0 1 2 3
36%
43%
0% 10% 20% 30% 40% 50%
Mega
High-Risk TypicalClient Value Peer Median
% Outstanding Standard Deviation% Outstanding
0.0
-0.3
-1.0
16%
9%
42%
16%
10%
32%
Large
Mid
Small
Size of Investing Funds
� Attracting funds of various sizes requires different modes of outreach
� Larger fund managers
� Have an abundance of internal resources and heavily rely on in-house research
� Require direct one-on-one interaction with management
� Manage a large portfolio of securities which ultimately ends up being closely tied to an index benchmark portfolio
� Will most probably hold many in your peer group already; will try to outperform through re-weighting on a regular basis
� Smaller fund managers
� Less reliant on direct one-on-one management interaction; group meetings may be sufficient
� Will rely on sell-side analysis due to their limited in-house research
� Require accessible and good company information, presentations and disclosure
� Lack the resources to manage a broad portfolio
� Take large, opportunistic positions in a concentrated number of companies
� Can buy into or sell out of a large position very quickly
Active vs. Passive Funds
-3 -2 -1 0 1 2 3
71%
0% 20% 40% 60% 80% 100%
High-Risk TypicalClient Value Peer Median
% Outstanding Standard Deviation% Outstanding
-0.5
2.4
82%
18%
29%
Active
Passive
Active vs. Passive Funds
� A balanced active vs. passive ratio of share owners can be important for the stability of your share price
� Positive impact of passive funds:
� Can provide a long-term base of support and demand for your shares
� Provide day-by-day liquidity
� Negative impact of passive funds:
� Supply and demand of your shares is reliant on regional or sector performance, not � Supply and demand of your shares is reliant on regional or sector performance, not specific company or management performance
� Positive impact of Active Funds:
� Tend to get closer to management and have more interest in the strategic planning and the business development
� Tend to be less share price sensitive and more milestone achievement focused
� Will separate your shares from regional or sector related performance
� Negative impact of active funds:
� React more quickly and dramatically to negative company fundamental changes and announcements
Special Situation Investor Distribution
2.8
-3 -2 -1 0 1 2 3
21%
0% 5% 10% 15% 20% 25%
Hedge Fund
High-Risk TypicalClient Value Peer Median
% Outstanding Standard Deviation% Outstanding
-1.3
0.3
3%
9%
2%
5%
3%
Activist
Prime Broker
Special Situation Investor Distribution
� Hedge funds
� Are they in for the short term or long term?
� Are they event driven, arbitrageurs, or looking for instability?
� Activists
� Are they active investors or activists?
� Does the activist have support elsewhere in the shareholder base?
� Prime Broker
� Are they acting for securities lending, leveraged trade executions, cash management?
� Or are they acting for Hedge Funds?
Investor focus
% Outstanding Standard Deviation% Outstanding
0.7
-3 -2 -1 0 1 2 3
7%
14%
8%
0% 10% 20% 30% 40%
Contrarian
High-Risk TypicalClient Value Peer Median
1.1
2.9
-0.3
0.3
-1.1
13%
11%
25%
19%
10%
5%
29%
18%
14%
21%
Generalist
Global
Market Cap
Regional
Sector
Investor focus
� It is important to be diversified among a broad spectrum of fund focuses
� Who am I attracting? Or equally as important – who have I yet to attract?
� Sector followers? Growth investors? Value players? Market cap specific funds?
� Which universe of peers are they comparing me against?
� Which benchmarks are my shares being compared against?
� Heavy weighting in any one focus area can yield swings in ownership and share price if the specific focus comes under pressure, or the demand from, or fund flows to, those types of funds change
Current Shareholder Entry Points
and Trading Exposure
50
60
70
80
30
40
Sh
are
Pri
ce
Ne
w E
ntr
an
tsShare Price
Price Paid by New Entrants
Pricing Trend Number of Entrants
0
10
20
30
40
C urrentQ1-09Q4-08Q3-08Q2-08Q1-08Q4-07Q3-07P revious
0
10
20
Current Shareholder Entry Points and
Trading Exposure
� It is assumed that investors which have suffered large losses or benefited from large gains are more likely to part with their shares.
� The aim is to best estimate when the current shareholders entered the stock so as to estimate the number of investors which would be considered likely to be at risk.
� The analysis should be viewed in the context of the general market and sector performance and be read in conjunction with the active versus passive analysis to give a picture of those individual investors at risk.
The next steps
� The primary goal of all Targeting Programmes is
to find investors who have both the appetite and
the capacity to buy your shares
� It is important is to look at the whole market and
then filter down and prioritise to identify those
targets that will best fit with your future
objectives
Step 1. Identify targets with the “Appetite” to buy
� Monitor current buying and selling activity in the peer group
How can targets be evaluated?
� Monitor current capital flows across the sector
� Monitor current capital flows across the region
28
Step 2. Identify Targets with the capacity to buy
� Net asset value of the fund
� % Fund exposure to the sector
How can targets be evaluated?
� % Fund exposure to the sector
� % Fund exposure to the country
� % Fund exposure to the rest of world
� Top 10 holdings of each individual fund
29
The “Weighting” objective
� Most Targeting methodologies rely on a “Weighting Principle”
� This is achieved by identifying funds/institutions that are currently overweight in the peers/sector/region but underweight in youcurrently overweight in the peers/sector/region but underweight in you
� The goal is to be at least fairly weighted
� The objective is to identify funds/institutions that are currently buying into the peers/sector/region
Is this objective being achieved?
� No, for two fundamental reasons
� A Weighting Analysis cannot easily be achieved by � A Weighting Analysis cannot easily be achieved by
using the usual data sources
� Therefore most Targeting Programmes start from
an incorrect view of the market and can send you
in the wrong direction
“Public Data” sources – The problems
� The lack of “up to date” information
� The lack of complete information
� “Public Data” sources do not identify who makes
the investment decisions for multi-managed and
outsourced funds
The lack of “up to date” information
� The information that is made available in the
public domain consists of Regulatory Fund Filings,
Declarable Stake threshold breaches, “Technical
Announcements” or Published Fund/Institutional
PositionsPositions
� Both the filing and published information is
historic by its nature
Weighting Analysis
using “Public Data” sources
� Because there are mostly only Mutual Fund positions in
the public domain, any Weighting Analysis is immediately
flawed because it is based on only a partial and historical
picture of an Institutions true investment behaviour and
potentialpotential
� If you are comparing bespoke researched shareholder
positions on you against public filings, you are not
comparing like with like
� the peers may appear “underweight
The lack of complete information
Mutual Funds only represent (approx) 25% of investments
� Pension Funds
� Sovereign Wealth Funds
� Active and Activist Funds
� Insurance Funds� Insurance Funds
� Hedge Funds
� Prime Brokerage and Proprietary Desk positions
� Wealth Management
� Stock Lending
� Retail
FEW IF ANY “FILE” OR APPEAR IN PUBLIC DATABASES
Can your broker help with Targeting?
� Yes because they see current trading activity
� The limitation for brokers is that they do not have a complete view of which institutions are actively investing/trading
UBS – 9.0%
Goldman Sachs – 8.2%Goldman Sachs – 8.2%
Deutsche Bank – 8.1%
Citigroup – 7.9%
Credit Suisse – 7.3%
(Q4 2006 Leading Brokers, Top 5 ranked by value traded
Source - The Trade)
� The potential investors outside their field of (trading) vision have to be obtained from public information sources
End of Part 1
� Targeting
� Define your objectives
� Know your customer� Know your customer
� Prioritise the investment community
� Evaluate your targets
Part 2 – Evaluation of alternative
sources of information
Publicly available data sources
� The lack of “up to date” information
� The lack of complete information
� “Public Data” sources do not identify who makes
the investment decisions for multi-managed and
outsourced funds
The lack of
“up to date” information
US Mutual Funds - 13F Filings
� 4 snapshots in the year
� 45 days in which to file
� “Window dressing” & “Bed and Breakfasting”
Country Frequency by year
Austria 2
Belgium 2
Denmark 2
Finland 2
France 2
Germany 2
Mutual Fund public information
update frequency (Europe)
Germany 2
Greece 2
Italy 2
Netherlands 2
Norway 2
Portugal 2
South Africa 2
Spain 4
Sweden 4
Switzerland 2
United Kingdom 2
Which Non-US companies
are filed on a 13F?
� Run Date: 07/09/2007 ** List of Section 13F Securities **
� 294821 60 8 * ERICSSON L M TEL CO ADR B SEK 10
� 294821 90 8 ERICSSON L M TEL CO CALL
� 294821 95 8 ERICSSON L M TEL CO PUT
� 92857W 20 9 * VODAFONE GROUP PLC NEW SPONS ADR NEW
� 92857W 90 9 VODAFONE GROUP PLC NEW CALL
� 92857W 95 9 VODAFONE GROUP PLC NEW PUT
� 000937 10 2 * ABN AMRO HLDG NV SPONSORED ADR
� 000937 90 2 ABN AMRO HLDG NV CALL
� 000937 95 2 ABN AMRO HLDG NV PUT
The lack of complete information
Mutual Funds only represent (approx) 25% of investments
� Pension Funds
� Sovereign Wealth Funds
� Active and Activist Funds
� Insurance Funds� Insurance Funds
� Hedge Funds
� Prime Brokerage and Proprietary Desk positions
� Wealth Management
� Stock Lending
� Retail
FEW IF ANY “FILE” OR APPEAR IN PUBLIC DATABASES
The Public Data view
100%94%
31%
92%
32%40%
50%
60%
70%
80%
90%
100%Current
Previous
When comparing shareholder visibility across the sample set of 20 companies, bespoke data provided 94% coverage while public only provided 31%.
43
31% 32%
0%
10%
20%
30%
40%
Total Market Cap
Outstanding
Bespoke Public
Bespoke vs. Public Top 3 SA clients
60.00%
70.00%
80.00%
90.00%
100.00%
B es poke
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
AB S A G old F ields Nas pers A verage
B es poke
P ublic
Bespoke vs Public Data
SA Case Study | Buyers
293
130 126 119101
31
91
24
83
50
100
150
200
250
300
350U
SD (m
illio
ns)
Bespoke
Public
45
Bespoke revealed the above named investors as the five largest buyers into South Africa and in every case public information has failed to pick up the true magnitude of the share acquisition by these investors.
31 24
-2-50
0
50
NWQ
Investment
Management
Co. LLC
Franklin
Advisers, Inc.
Capital
International,
Inc.
Barclays Global
Investors NA
(California)
T. Rowe Price
Associates, Inc.
Bespoke vs. Public
SA case study clients - Sellers
-33-37
2
-11
-40
-30
-20
-10
0
10 U
SD (m
illio
ns)
-59
-50 -48 -47
-37
-70
-60
-50
D. E. Shaw &
Co., Inc.
Lazard Asset
Management
LLC
Emerging
Markets
Investors Corp.
Batterymarch
Financial
Management,
Inc.
Federated
Investment
Management
Co.
USD
(mill
ions
)
Bespoke
Public
Bespoke data reveals the above named investors as the five largest sellers of
South African stocks while public data is yet to be updated with their latest
holdings
Bespoke vs Public Data
– SA Case Study | Holders
1.8
1.2 1.2
0.80.7
1.8
0.8
1.0
0.8
1.0
1.2
1.4
1.6
1.8
2.0
USD
(bill
ions
)
Bespoke
Public
0.80.7
0.5
0.0
0.2
0.4
0.6
0.8
Paulson & Co.,
Inc.
Tradewinds
Global
Investors LLC
Blackrock
Investment
Management
(UK) Ltd.
Dodge & Cox,
Inc.
NWQ
Investment
Management
Co. LLC
USD
(bill
ions
)
Finally, How do you measure whether
you have targeted the right investors?
� Monitor subsequent trading activity
� Determine investor perceptions� Determine investor perceptions
� A constantly evolving process