Shareholder ID is essential: An interview with Gunhild Grieve, Head of Investor Relations, RWE AG

9 August 2017

By Amit Sanghvi



As a past associate at an investment bank in London, UK and now head of IR RWE AG, Gunhild Grieve has been on both sides of the investment table. We caught up with Gunhild to talk about the changing IR landscape, MiFID II, the innogy IPO and the two reasons she can’t live without shareholder ID.

Amit Sanghvi (Q4): How did you find the move from the investment banking world to IR?

Gunhild Grieve (GG): I underwent a steep learning curve when I made the transition to investor relations. I learned early that Corporates have a much better understanding and greater transparency into the minds of investors, and their perception of the company and its investment proposition. These are sentiments investors don’t share with a bank. With investment banking it’s a lot more clinical and about the deal, while IR is truly about relationship building.

Q4: You’ve been in IR since 2008. What are some of the key transformations you’ve witnessed to the industry over the years?

GG: The first thing that comes to mind is the increasing role of technology and the emergence of digital solutions. Everything (and everyone) is turning digital, and our investors are expecting to access key data and insights, reports, etc. easily.  We tried social media, specifically Twitter, but found that our investors weren’t on there accessing our data, so we’re not very active. Our main digital channel is our website.

I’ve also seen the strategy around in-person meetings evolve and morph over time. With the increased cost pressures the buy-side is facing, and the increased universe they cover in terms of corporates, time is a hot commodity — and what they have less of. With the digitisation and abundance of data, investors have quick access to information. For an investor to meet with you face-to-face, they must really be interested in your company. Attendance at roadshows and conferences is seeing the same decline, which means IR teams have to be creative and look for other mediums and channels for bringing investment propositions to the masses. For us this means hosting a capital market day. This forum allows us to reach a wider audience and talk to what we feel important — strategy, financials, operations and so on. We’re able to shape our message and get it out to the market in one big swoop.

Q4: One major initiative that is set to impact the role of European IROs is MiFID II. Do you agree with that sentiment?

GG: I believe MiFID II will have an impact, but not sure how quickly we’ll see it. MiFID II is a frustrating regulation. My impression is that everyone (corporates, buy-side and sell-side) is interpreting it differently and will be complying to it differently.

I am expecting to see a consolidation on the sell side. We have 27 sell side analysts — I don’t suspect that to be the same in a year’s time. I just don’t believe investment firms will pay 20+ analysts for research on RWE. We will see some sort of reduction on the research front and we have to brace ourselves for this change.

It’s funny, because the MiFID II conversation is happening all over, and yet some of the buy-side we speak to haven’t even thought about it, while some, especially in regions outside of London, are telling us they certainly won’t be paying for meetings. IROs will have to organise roadshows themselves to meet with investors.

Q4: Will RWE take any special measures in preparing for MiFID II?

GG: Yes. We will leverage digital tools to help us organize our own roadshows. We need to make sure that if required, we’re driving the process and can set up our own investor meetings. I foresee the biggest issue for us is getting in front of the right number of investors. For example, if I go to CITI and have a list of six investors I want to meet with, but they can only arrange three because of the corporate access fee (and companies not wanting to pay it), I have to have the ability to reach those investors via another mean and set up the required meetings. To not be able to do so would be detrimental in the long-term.

Q4: Last year was a turbulent one and there were a lot of eyes on RWE as it set in motion plans to launch Germany’s largest IPO since 2000 — the country’s third largest ever after Deutsche Post and Infineon. What were some of the challenges you faced leading up to the spin-off of innogy

GG: The IPO of innogy was a momentous event for RWE. And as exciting as it was, it brought about several challenges for my team. To be honest, we saw issues with integrating our day-to-day function with the IPO spin off. Our existing workload increased twofold. To keep us moving forward, we hired someone to help with the equity story and drafting of the prospectus. And we leveraged our website for all communications. Anything we could communicate, we did so on our site.  

As a public company, there are a lot of rules and regulations. When you IPO there are additional rules and regulations to meet. Imagine, we were bombarded with legalities. I think the biggest challenge of all was the change in how we engaged and communicated with our investors. Our lawyers were extremely cautious [as they should be] and directed us on our discourse: what we could and couldn’t say to the investment community. We went from having open conversations to being concerned about the dangers associated with unequally sharing information between investors. A public company conducting an IPO spin-off is not common activity, so we had to, at times, take the lead and make decisions to ensure fair and equal sharing of information. Very stressful.

Q4: What did you learn from this transaction?

GG: A good IR team is essential to a deal like this, and the success of an IPO. We have such an experienced team and such good insight into the investor community and investment criteria. With a situation like this, being a public company spinning off a large part of the business via an IPO, we were able to incorporate investor insight and feedback into our transaction. This was critical to our success —gaining insight from the investor community and bringing that to the forefront of the equity story.

When you IPO you use buzz words such as management skills, track records, industry leading, etc. But you really need to understand the value drivers of your business and why investors invest in you. And then you build that knowledge into the equity story. You should always be thinking about the issues and what investors are concerned with, and address those concerns with the structure of the deal.

Q4: What sort of data did you rely on when planning the impact of the spin-off on your investor base?

GG: Shareholder ID! It was a huge asset to me and my team during the innogy spin-off. Because we knew who held our shares, we were able to communicate with those holders and understand their reasons for investment. We knew which investors were likely to continue on as investors in RWE versus those that were likely to rotate out and into innogy. With that knowledge RWE was able to brace itself for this change and plan ahead by targeting more appropriate investors.

Q4: Can you give a bit more insight into how you use shareholder ID in general?

GG: We conduct shareholder ID twice a year, and in my opinion, shareholder ID is an essential service. It impacts how the IR team operates and targets new investment. At a basic level we include some data from the analysis in our annual report and leverage the shareholder lists to plan for the AGM. But more importantly, I look at all the data sets provided and focus specifically on what information I would put forward to management. So the questions I ask myself include: what type of investors are in my stock? What is the passive versus active split? Are they dividend driven? What type of movement have we seen in the big investors? And then I link all this data back to the conversations I’m having with those investors. Do the movements make sense in the context of those conversations? Are there any misunderstandings? Having a handle on the answers to these questions helps me convey a more accurate story to my CEO and CFO, and helps identify forward looking actions.

The shareholder analysis also allows us to identify any risk from potential activists, a change to dividend policy, an updated outlook on growth, etc. We then work to mitigate these risks by targeting investors that match our current and long-term investment proposition.

Q4: There are a plethora of Shareholder ID providers out there. What do you value most when selecting a provider? What should IROs look for in their partner?

GG: First and foremost, I look at the type of reports they produce, specifically the analysis within the reports. All reports provide a list of your holders, but I’m looking at what splits are provided (buyers, sellers, geographic distribution, types of investors, style of investment, etc.), and what additional stats they share with you. This latter point should be a key differentiator. Look for service providers that can separate the unusual shareholder movements from the noise — not just simply provide you with a buyers and sellers list. Can their analysis direct your attention to the investors that are showing a demand for your shares even in regions which are mostly selling? So look for providers that provide context and not just data.

Aside from reports, the knowledge of the analyst(s) and your relationship with them is critical. I have a very good relationship with my analyst. He keeps me up-to-date on key insights that occur in our space and reaches out when he sees some unusual behaviour, and vice versa. If I need to know something between our shareholder IDs I know I can reach out and have our analyst look into it.

And third, and final: I look to see what kind of contacts they have with custodians and who their prime sources are.

Q4: What is your favourite city to roadshow?

GG: I know I live in London, but for RWE, London is the most important city in terms of investor base, but also the level of sophistication of investors – we have access to so many UK investors, but also US companies who have analysts located in the UK. And in terms of nightlife, culture, and experience, London has it all.

My favourite destination outside the UK is NY. It’s so vibrant and has a good investor base. Whenever I go, I tag on more time to have a little bit of fun.


Amit Sangvhi is the senior director, international advisory at Q4. Based in London, UK, he’s passionate about how technology can change the face of shareholder ID in Europe. You can follow him @4mits.


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