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Client TrainingClient TrainingGlobal Equity Services

Reaching Out to Investors: Effective RoadshowsJuly 2009Jessica F. [email protected]

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!


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


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


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


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


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


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!


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


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


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!


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


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


– 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


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


2009 in PerspectivepThe Impact on Roadshows


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


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


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


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,


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%


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%


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


Client TrainingClient Training - tuyid.org Effective Roadshows.pdf · Wh d h ?Why roadshow now ......

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