Investor targeting as a continuous process

targeting investors

As the IR community begins to focus on post-pandemic investor engagement, IROs are considering opportunities to have their companies participate in a variety of hybrid and potentially in-person events. Whether this is a sell-side sponsored conference, an investor NDR, or a company analyst/investor day, it provides an opportunity for interactions with investors who they are targeting and have identified as potentially being able to increase their existing share position or establish a new position. 

In a May 2021 Harvard Business Review article, Dennis Carey, Ram Charan, and Bill McNabb shared their views on the changing role of IROs. They highlighted key responsibilities including “building constructive relationships throughout the shareholder base” and “building and sustaining credibility with long-term investors”. While their emphasis was on ways that the IRO role needs to change, I believe these targeting responsibilities may be evolving, but they aren’t really new. 

The process of targeting desirable investors has always been a part of investor relations. Some leaders and teams handle it reactively – engaging with investors who contact them. Others take a proactive approach, applying a process-oriented mindset to analyze their shareholder composition, initiate outreach to investors they are targeting, engage with them sharing the company’s investment thesis, and then incorporate the investor feedback to refine ongoing efforts. Before the introduction of CRM software platforms and sophisticated screening algorithms, the street-savvy investor relations professional was doing this on their own. The advancement in support infrastructure has added productivity and consistency, but the process has always remained a priority.

We recently shared highlights of our process approach to investor targeting with our clients. Below, we’re expanding on that approach with additional perspective. 


The purpose of shareholder analysis isn’t to just create pie charts of current shareholder styles that can be shared with management. As the HBR article authors suggest, a key first step is that IROs must develop “a deep knowledge of the shareholder base”. This goes beyond spreadsheets, tables, and charts. IR teams must build a strong understanding of the perspectives of each shareholder group. The current positions of key top holders and their longer-term objectives are critical to understanding any future potential changes in holdings. Market intelligence can be vital to building this insight. Billy Eckert, Q4’s Head of Surveillance and Capital Markets Intelligence, highlighted this in a recent conversation with a client, saying “our analysts can often provide clients with additional views on firm and fund level objectives, beyond just their own analysis of current holding levels”. 

Additionally, IR teams must analyze which firms or funds may be able to make a significant change in their shareholder position. Our targeting analytical work for clients combines the identification of prospective investors who are currently non-holders but be capable of establishing substantial new positions with identification of existing investors who may be capable of expanding their position. The non-holder targets may be holders of peers, holders of non-competitor companies with similar financial profiles, or holders of non-competitor companies benefiting from similar global or secular trends. 


Some IR teams find the outreach step to be the most challenging part of the process. It is often compared to the challenge of moving cold leads to warm prospects. There can be frustration in spending a lot of effort at attempts to generate interest with investors, particularly when the hit rate of successfully attracting a positive response is relatively low. We encourage teams to cast a wide net and be prepared for a multi-quarter effort. It is extremely rare that IR outreach to a targeted investor leads to a single meeting with the outcome of the firm or fund establishing a new position or significantly expanding an existing holding. 

Since each investor has a specific perspective, the outreach messaging has to bring the benefits of engaging to light. As my Q4 colleague & IR Partner Matt Tractenberg has said, “The IRO has to have a hook; some reason why the PM would want to take their call. It can’t just be ‘you screened well’ or ‘you own my competitor’. They have to identify a common theme or driver that the PM has shown interest in, or identify a subject of interest to the PM that they or a member of their executive team could add value on.”

The IR team must succinctly communicate the specific company messaging that uniquely differentiates them and which makes their story interesting to the PM/Analyst being targeted. This might be done as part of an invitation to speak to the IRO directly. It could be an offer to meet with a member of management in a 1-on-1 or small group meeting at an upcoming sell-side sponsored investor conference. Or, it might be an invitation to join an Analyst/Investor day sponsored by the company. The key factor is the call to action that leverages the investor’s interest and emphasizes the company’s differentiation.


This is where relationships are built and managed. The communication skills of the IR professional are put to the test in this part of the process as they have to share the unique aspects of their company’s investment thesis in ways that align with the goals and status of the targeted investors. Carey, Charan, and McNabb in HBR highlight its importance stating that the IRO “communicates company strategy and why it is best suited to enhance long-term value creation and competitive advantage”. However, the conversations and efforts will be different for each targeted investor. Those who are completely new to the story and the space may need foundational education on the business model and strategy. Since they do not own peers and lack specific knowledge about the company and the industry, bringing them up to speed on the investment opportunity will take more time.

Other targeted investors who are more familiar with the industry landscape and possibly own peers in the group may only need to be “qualified”. IROs must determine if the interest these targets are showing is driven by the investor’s existing investment in a competitor or genuine consideration of a new opportunity. While familiarizing these investors with your story may take less time, they may only be validating the investment decision they’ve already made in one or more of your peers. I often remind clients that their challenge in engaging with an investor who owns a peer is that they have to understand what drove the investor to make that decision and demonstrate that a new decision to invest in their company will lead to a greater investment return. 

“Engaging with a prospective investor requires building a relationship based on really understanding their investment criteria, and deciphering what matters most when they sift through all the information they have access to. A good IRO will assess this and drive outreach efforts to that investor, based on that insight”, said Karen Greene, VP of Client Experience and IRP at Q4.  In all these interactions with targeted investors, the IRO must also determine which of them continue to be engaged and cultivate those relationships for further interactions involving management team members to deepen the relationship.


Viewing targeting as a continuous process ensures that a feedback loop is incorporated. This enables the IR team to refine and adjust their efforts as each cycle is completed. We typically work with IR teams to do this on a quarterly or half-yearly basis. Tracking all methods of outreach at each forum for engagement is essential. IR teams can do this manually, but best-in-class programs rely on a robust CRM platform with detailed monitoring. It is critical to make rigorous assessments of each targeted relationship. If there are indications of interest or heightened engagement, effort with those targets should be intensified.

These targeted investors can be given a higher prioritization with each successive round of company engagement.  “IR teams need to keep a constant, dynamic, and active funnel of potential new investors and need to be increasingly strategic as to when they proactively follow up with investors after an initial meeting.  An IR-focused CRM solution is imperative in order to be highly organized and focused in investor outreach efforts.”  commented my IR Partner, Thierry Elmaleh who spent many years managing institutional investor relationships for various global investment banks.

Perhaps one of the toughest evaluations is determining when all avenues to engage a target investor have been exhausted. It is easy when you get a response from a target saying “thanks but not interested in meeting”. However, a lack of a response shouldn’t lead to immediate disqualification. As company performance changes, the potential attraction to a targeted investor may shift more positively. IR teams should reflect these outcomes in their tracking, and eliminate from future consideration those target investors whose interests and objectives no longer align with the company strategy and performance.

Also, IR teams need to share feedback that they have gathered from targeted investors with their management team. This may result in modifying the approach with the investors they are targeting or could lead to substantive changes in investor messaging, competitive positioning, and company strategy. Once these changes have been taken into account, the process can begin again with a refresh of the analysis.

Learn more about investor targeting and how to get the most from your outreach efforts by watching our on-demand webinar, The evolving role of investor relations: Creating an integrated investor outreach strategy.

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