We’re excited to launch our new “Profiles in IR” series on the Q4 blog, where we interview leaders and experts in investor relations (IR) — highlighting their journeys, challenges overcome, lessons learned and a lot more. This series is designed to offer fresh perspectives and actionable advice from those shaping the future of IR.
Our first profile features Scott McLaughlin, Senior Vice President at Invitation Homes Inc., the nation’s largest home leasing and management company. Scott oversees Invitation Homes’ investor relations and tax functions, and is a key member of the company’s sustainability task force. With more than 20 years of experience in real estate finance, accounting and consulting, Scott brings unique and valuable insights into the future of IR and ways to drive IR success.
Q: We’d love to hear about your career journey. What brought you into investor relations?
Scott: My background was originally in accounting. I started at Arthur Andersen right out of college, on the tax and consulting side. When the firm went under, I moved to Ernst & Young and transitioned into the real estate investment trust (REIT) space, primarily in tax and accounting roles.
In 2015, a unique opportunity presented itself at TIER REIT, and I dove in. They had an opening in investor relations, and because of that, one morning, the CEO needed someone to write a press release. Even though I was the head of tax, I volunteered. The conversation went something like this:
Me: Let me do it!
Our CEO: You? You’re the tax guy…
Me: (proceeds to write press release)
Our CEO: Great; let’s publish it.
Shortly thereafter, I took over IR, and the rest is history. It was definitely a “drink from the firehose” moment with a lot to learn, and a very busy and exciting first year. I’ve been in IR for about 10 years now, with the last three-and-a-half at Invitation Homes, overseeing both IR and tax.
Q: How do you divide your time between leading tax and IR functions?
Scott: I joke that only at a REIT would I get away with leading both the IR and tax teams. There’s a little overlap, especially when addressing investor questions about taxability, dividends, distributions and taxability of gains, and so on.
When I started here, people would ask me, “What’s your split between IR and tax?” and I’d say, “70-70” because things were so busy, and I was working a lot. Now, I have a really great team on the tax side, and that allows me to focus more on IR, so the split is more like 70% IR, 30% tax.
Q: What three words would you use to describe IR?
Scott: Strategic, engaging and trust-building.
IR is highly strategic, requiring close collaboration with the executive team. For example, I have a direct line to the CFO and dotted lines to the CEO, COO, CLO, etc., and work to align IR with their business objectives. It’s also engaging, as the role involves constant communication with the investment community — both the sell side and the buy side — as well as internal folks. It’s important to be a helpful, friendly and engaging resource for the investment community, and to have fun where we can. Finally, IR is about trust-building. Establishing and maintaining trust with investors and other stakeholders is essential.
Q: What is the goal of Invitation Homes’ IR function, and how big is your IR team?
Scott: We’re a small-but-mighty team of two. We have a jam-packed quarterly close process, but then we catch our breath in the off months. Our goal is to provide transparent, accurate and timely information that builds trust and communicates the strategic direction of the company — supporting the company’s stock valuation and ensuring our access to capital.
Q: What are some IR challenges you face? How do you address them?
Scott: One challenge is staying on top of, and having a constant dialogue with, all areas of the business, so I can communicate effectively with the investment community. IR has also changed a lot in the last 10-20 years. So, another challenge is understanding who is trading our stock and how — especially given the rise of algorithmic and high-frequency trading bots. We’ve got great relationships and trust-building with the investment community who is visible, but reading the “invisible” aspect of it — and how much that controls day-to-day trading — can be a challenge.
NIRI [The National Investor Relations Institute] and other groups are advocating for more timely reporting of stockholder information, which would be very valuable. We’re also beginning to explore tools and market structure analytics like ModernIR to track trading patterns, as well as tools that measure investor sentiment. In addition, we lean on fantastic tools like Workiva for ESG [environmental, social and governance] and financial reporting, our CRM, and Q4’s website management and virtual events functionality for connecting and engaging with the investment community in a way that fosters valuable relationships.
Q: How do you define success in IR?
Scott: Success in IR is about alignment — ensuring that our company’s valuation reflects its true value and that our message is clearly understood by the investment community. In order to do that, you have to prioritize shareholder engagement. Look at: Are you actively and constructively engaging with shareholders? Is this leading to positive results? Effective communication and maintaining access to capital markets are also key indicators of success.
Q: If there were one part of your IR role you could automate or make easier, what would it be and why?
Scott: Monitoring investor sentiment. It’s necessary to understand how investors perceive your company on a day-to-day basis, but it’s time-consuming to gauge this accurately. It involves a lot of communication, dialogue and outreach. Automating sentiment-tracking would be beneficial, in a way that balances applying technology with also maintaining human relationships.
Q: What is one thing you wish you knew when you started your investor relations career?
Scott: I wish I had a better understanding of the secrets of the “dark pool” and complexities around who is trading, where it’s coming from, how I can reach them, and whether they even want to be contacted. To a large extent, we see a lot of algorithms and bots, and this isn’t unique to our organization. Even today, this is a topic I continue to learn about, as it can be challenging to track who’s actually trading our stock.
Q: How do you see IR evolving in the coming years?
Scott: IR is becoming increasingly multidisciplinary. Twenty years ago, you could have just a communication background or just a finance background. Today, it’s really helpful to have it all: a diverse background — including communications/marketing, finance and accounting, equity markets, and business strategy, as well as industry-specific knowledge — to fully understand the complex areas IR touches and to excel in IR. I see this trend continuing, with IR professionals playing an even more strategic role within their companies.
Q: How does your work on ESG intersect with your role in IR?
Scott: I’m part of Invitation Homes’ ESG task force, which has about a dozen members from different departments — legal, HR, procurement, operations, etc. — and is led by our VP of ESG. It’s important to have IR represented here because the investment community, in many ways, helps drive progress and change in these areas. As a task force member, I ensure that the investment community is informed about our sustainability initiatives, and I convey their inquiries and expectations back to our company. Our top overseas investors, in particular, are very focused on ESG, so it’s crucial that IR is closely involved in these efforts.
Q: What advice would you give to professionals just starting out in their IR career journey?
Scott: Whether you’re the IRO on Day 1, or want to work to be the IRO, get as diverse a background as possible within your company right now. Expose yourself to different aspects of the business — operations, finance, capital markets, etc. The broader your experience, the better you’ll be able to serve in a strategic IR role.
Q: Do you have any hobbies or interests outside of work you can share?
Scott: I’m a Masters swimmer; I was in the pool at 5:15 a.m. today with my Masters swim team. It’s not unusual to see me later in the day with telltale, circular goggle marks around my eyes, like I have now.
I’ve been swimming with Masters teams across the country for years, ever since Michael Phelps’ incredible performance in the 2000 Olympics reignited my passion. Masters swimming is for anyone 18 or older. People have all different skill levels — one woman I swim with is an Olympic medalist — and everyone is on a first-name basis. Wherever I’ve lived, in both the US and overseas, I find this is a great way to stay healthy, and connect with a diverse and really interesting group of people.
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Stay tuned for more insights from leaders like Scott McLaughlin in our “Profiles in IR” series!
