Key Insights from “Accelerated IR: Taking a Proactive Approach to Shareholder Acquisition” Webinar

In a recent webinar hosted by S&P Global Market Intelligence and Rose & Company, panelists Liz Librizzi from Alliance Bernstein, James Davolos from Horizon Kinetics, and Simon Rose from Rose & Company shared their unique perspectives on overcoming the challenges companies often face in attracting new, long-term shareholders.

Here are the five key takeaways from their discussions:

There’s a big difference between corporate access and investor access. The former is broker-driven and commission-based, while the latter is focused on identifying the best potential shareholders for a company. Companies should devote more efforts toward investor access to build a high-quality, long-term shareholder base.

“The onus is on the IR department to make those introductions and to find long-only portfolio managers. It's not going to be done for you anymore and it's tricky.”

Companies need to actively participate in the shareholder acquisition process. Given the combination of an evolving regulatory landscape and budget compression on the buy-side, relying solely on traditional sell-side corporate access is no longer sufficient.

"I view corporate access as very transactional in nature. The banks’ priorities are not the buy-side priorities, and they're not the corporate priorities.”

Firms need to challenge their brokers and partners, demand more in terms of quality data and engagement, and find ways to directly engage with money managers outside of the corporate access channel. Simply put, many potential ideal shareholders are not getting access to company management teams through the sell-side.

"I haven’t been invited on a [sell-side sponsored] roadshow in a very long time unless it was for a microcap, but I get it – we don't pay their bills."

Some investors are reluctant to place value on sell-side corporate access.

"We have a fiduciary responsibility to our clients… we believe we shouldn't have to use their dollars to pay the sell-side for something that… can be developed directly."

It's crucial to identify investors whose investment style and portfolio align with a company's profile. This involves going beyond mere peer comparisons and understanding the individual investment approaches of potential long-term investors.

"If you could figure out somebody's style, what they like, and what they don't like, and then approach them through the way that they think about the world, that's invaluable."

Companies should focus on meaningful communication that goes beyond financial metrics. This includes clearly explaining the business model, value drivers, and growth plans. Companies should speak to all prospective investors as if they were generalists. They should be open to discussing valuation in a realistic and credible manner.

"Look, this is my business, and this is how it works. This is where I get margin. This is where I get scale. This is where I grow. This is where I reinvest to talk about those business drivers instead of just the boilerplate quarterly release. I can't stress that point enough.”

Feedback and follow-up are essential. Too often, meetings end without a clear next step, making gathering actionable post-meeting feedback is critical. Building strong relationships by proactively engaging with prospective investors will ultimately lead to more targeted and efficient use of management’s time and has the potential to significantly influence messaging considerations.

We encourage you to watch the complete webinar recording. As Simon Rose sums it up, proactive engagement with potential shareholders “is the difference between being successful and not being successful in building a high-quality shareholder base of long-only investors."