In a recent roundtable event hosted in London, Q4 connected with IR professionals to discuss investor targeting in the UK. The group covered several topics, including broker behaviours, digital tools, social media, and how specific markets and traditional practices are changing.
Broker dependence and expanding investor outreach
In the UK, public limited companies (PLCs) often use brokers to target potential investors. This approach was viewed by event attendees as somewhat limiting, with most of the group feeling that PLCs needed to be more proactive and directly engage with potential investors.
Instead of relying on brokers to manage existing relationships with established shareholders, one recommendation was for IROs to have their brokers arrange meetings with new investors who aren’t a part of the company’s existing shareholder register.
These meetings can help expand the investor base for the organisation by bringing in new investors who can offer a fresh perspective. Expanding the investor pool beyond a few large shareholders can also help to ensure that the company is less vulnerable to the influence and demands of a few investors.
Addressing U.S. vs. U.K. value gaps
The discussion moved on to how companies in the United Kingdom are often perceived to have lower valuations compared to similar companies in the United States — and the impact of this valuation gap. While better capitalised companies are less likely to suffer from these value gaps, these disparities are particularly common in small-caps.
When a small-cap company experiences a significant valuation gap to US peers, shareholder activists might view this as an opportunity to take a position and exert influence on a company’s management and policies.
The group agreed that in order to counteract activist investors, IROs need to be transparent and proactive in their communication strategy. They must regularly inform investors about the company’s performance and future strategies, all while responding promptly to investor inquiries.
Digital analytics and social media: Tools for the modern IRO
Attendees discussed the importance of social media, and how to use it to further their company’s investor relations goals. This involves identifying the most relevant social media platforms for their target audience, especially LinkedIn, to target investors and promote events.
Content such as informative posts about market trends, company performance insights, and thought leadership articles on industry developments should be a part of an IROs strategy. Creating content that resonates can attract individuals that traditional communications like press releases and earnings events won’t reach.
In addition to a strong social strategy, the group acknowledged the value of platforms that incorporate engagement analytics to tailor their messaging and outreach efforts to attract and engage with the right investors effectively.
Retail investors and niche markets
One attendee targeting retail investors explained how they used an agency to host webinars for retail investors following results announcements. These webinars, which often attract over 100 attendees, offer a platform for retail investors to gain insights directly from the company. This practice not only enhances transparency but also builds investor trust and loyalty.
When discussing companies in niche sectors or with limited peers, participants agreed that they face unique challenges in peer targeting. Given a lack of closely aligned peers, traditional peer targeting becomes challenging. A recommendation from the group was to use thematic and fundamental peer targets instead.
Grouping companies based on common themes or trends means identifying and aligning groups with similar characteristics or investor appeal, facilitating more effective and targeted investor outreach.
Alternative ways to engage investors
IROs were also interested in finding more relationship-based approaches to connect with potential investors. This included leveraging existing relationships with current investors (‘warm investors’) for introductions or referrals to other potential investors who have similar interests or profiles.
The effectiveness of attending conferences as a tool for investor engagement received mixed responses. It was discussed that IROs should focus on conferences that offer the highest potential for quality networking and investor engagement, instead of attending as many conferences as possible.
Participants also stated that there has been a growing trend toward reevaluating the necessity and format of traditional Capital Market Day events. Many companies are moving away from holding these events annually if they are not absolutely necessary or if there isn’t any significant news to present to investors.
Instead, the budget allocated for Capital Market Days could be redirected to hosting smaller, more frequent events or webcasts focused on specific topics throughout the year. These types of events can be tailored to specific investor interests, market developments, or company updates — providing a platform for more engaging and relevant investor communication.
The future of investor relations targeting
For more insights into optimising investor targeting strategies, check out “The continued importance and evolution of investor targeting” or connect with one of our experts to learn how Q4 can help you elevate your investor targeting strategy.