Listed Private Equity

Arne Karlsson

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NIR 17 June 2010www.ratos.se

Definition of Investor RelationsDefinition of Investor Relations

I t l ti i t t i t Investor relations is a strategic management responsibility that integrates finance, communication, marketing and securities law compliance to enable the marketing and securities law compliance to enable the most effective two-way communication between a company the financial community and other company, the financial community, and other constituencies, which ultimately contributes to a company's securities achieving fair valuation. company s securities achieving fair valuation.

(Adopted by the NIRI Board of Directors, March 2003)

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Strategic shiftStrategic shift

Listed → Unlisted

Asset management → Holdings

√

√Asset management → Holdings

2-4 years

√

√Retained profitability

S i l ti

√

√Successive revaluation

Tailored organisation

√

√Own deal flow

√

√

√3

Transparency √

Process of change (1)Process of change (1)

Unlisted 10%

Unlisted92%

Listed90%

Listed 8%

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January 1999 June 2001

Process of change (2)Process of change (2)

Holdings44%

Holdings100%

Assetmanagement

56%56%

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January 1999 June 2001

Risk of drowning on the way?Risk of drowning on the way?

Hi hl ti k t d di iHighly negative market and media image- wrong strategy

- no transparency- incompetent management

h f h h f b l- owner with focus other than profitability- and so on

Facts?- totally wrong!

- but…

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Get a grip Ratos!

The market rejects Ratos Ratos must make

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Ratos must make a commitment

Risk of drowning on the way?Risk of drowning on the way?

Hi hl ti k t d di iHighly negative market and media image- wrong strategy

- no transparency- incompetent management

h f h h f b l- owner with focus other than profitability- and so on

Facts?- totally wrong!

- but…

Risk: no opportunity to complete

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pp y p

Info/IRInfo/IR

St t i ll t l t f bl tStrategically central part of problem management- Info/IR first new recruitment!

- straight into group management

Enormous exchange/-d impact- never experienced such strategically central info effort- shift knowledge and perception- recreate confidence- rebuild brand (sauna effect!)

But- multi-year project!

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y p j

Why is Info/IR important? (1)Why is Info/IR important? (1)

C t t i f / i tiCreates accurate image of company/organisationTransparencyCredibilityBuilding the brandgCoherent internal and external imageCorporate cultureCorporate cultureRecruitment Feeler (critical examination)Etc.

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Why is Info/IR important? (2)Why is Info/IR important? (2)

B t t i f lf t !!But: you cannot inform yourself to success!!- reality and profitability always control over time…

d d l h - …and do not always catch up- IR function must not live its own life

Business support- tools/means- strategically central!

Info/IR < deals- form vs. content

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Info/IR vs. CEO (1)Info/IR vs. CEO (1)

For this teamwork to functionFor this teamwork to function- Info/IR must have near and close access to CEO…

d i - …and vice versa- close cooperation with other central functions is also

necessarynecessary

Creates Info/IR unit that is …i th k- in the know

- informed

d I M /E l W i…and can manage Issue Management/Early Warning- interface, several units

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- catalyst!

Info/IR vs. CEO (2)Info/IR vs. CEO (2)

T b MTube Mac- background- tried to make use of Swedish media

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Big blow gthreatens Ratos

Ratos sued for SEK 700mfor SEK 700m

14DI 070813

Info/IR vs CEO (2)Info/IR vs CEO (2)

T b MTube Mac- background

i d k f S di h di- tried to make use of Swedish media- effect the same day: Ratos share price rose…

Keys- knowledge/facts

- preparations (IM)- confidence (long time to build…)

Info/IR integrated part of Ratos’s everyday life- Group management, Q group, Kick-offs, etc.

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p g , Q g p, ,

Good adviser to CEO?Good adviser to CEO?

G tGroup managementManagement – does not “monitor” info interests!Overall viewMust not be too much of a gate keeperg pMost successful when not noticed (outwards)!Long term agenda setter not “media adaptable”Long-term agenda setter, not media adaptable

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Strategic unitStrategic unit

B i lBusiness plan- regard as an operating business area

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