INVESTMENT COMMUNITY PERSPECTIVE

It is always great to get some help with your IR work, and sometimes that help is closer than you think. But in order to leverage the help, you first have to find it. Many investment dealers have set up corporate access groups, whose job is to help companies with their marketing. That includes the logistics nightmares of setting up meeting materials, prepping you on the funds you are about to visit, organizing cars, lunches and dinners, chasing down lost luggage, and getting out the follow-up letter that recaps the meetings a week or so later with some ‘no names’ feedback from the buy-side. (You should expect such a letter, as it is now standard.) Smaller dealers usually have an assistant who does this work. Typically, the head of sales will prioritize the meetings (who gets one-on-ones, who gets a group meeting); sometimes with the company’s feedback, sometimes not. The bottom line is that the dealer is trying to maximize current trade and future business opportunities.

There are two forms of marketing: deal oriented (where you are marketing a particular deal, be it financing or merger) and non-deal oriented (providing updates on your company to the buy-side.) Deal oriented marketing tends to be highly orchestrated and closely controlled by the investment dealers in order to ensure the deal gets done.

However, it is the non-deal marketing where you need the assistance, and it is not lost on the dealers that a good experience marketing with them (well organized, executed, with good follow-up) could improve their syndicate position with you on your next financing or to leading your next deal mandate.

Built on a variation of a model that existed in the United Kingdom for years, the corporate access group looked after the marketing needs of the dealer’s ‘clients’. It used to be (and this is changing) that U.K. companies exclusively used their lead underwriter for all marketing. With the advent of competition, automatically going with the lead underwriter became more of a ‘jump ball’ exercise. Good corporate access groups could literally steal clients away – so like any good idea, the practice of providing this service spread.

Corporate access groups are now pitching marketing services, becoming very proactive, and many have started to attend CIRI functions. This makes sense – fish where the fish are. Getting to know the right people at the various dealers, and communicating with them regularly, can be of great assistance to you. Make a point of meeting these people and staying in contact.

When you go marketing – keep notes. Some dealers may be better in some cities than others, some may be better with follow up than others. By taking notes, you can learn from the process. Many larger companies spread out the marketing with a number of dealers, but you can always be smart about allocating the cities.

Of course, the size of your company can have a significant bearing on the approach to marketing. Large, liquid well-known companies may have many investors that want to see them, and the process of divvying up the limited time becomes an exercise in minimizing investor disappointment. Small companies that are not well known may have few investors that want to see them, and the process of marketing becomes one of minimizing the company’s disappointment. Dealers can seldom force someone to take a meeting.

If yours is a relatively small company, your work is really cut out for you, but it is not hopeless. However, you really need to develop relationships. At the dealers, learn who the trader is for your stock, know the salespeople who push your story and get to know the people who look after the logistics; ensure they are on your email list for press releases and results, as they will appreciate this. And it may be that some of the smaller dealers that specialize in smaller companies are far more plugged in as to which fund managers could be interested in your company. Keep lots of notes, and follow up yourself with phone calls.

Also, don’t forget the retail brokers; some can have books larger than funds you will visit. If brokers in a particular town really follow your story, offer to meet with them as well; maybe they will help arrange a visit with their entire offices (for retail meetings, think ‘lunch’ and be prepared to buy sandwiches – retail brokers love a free lunch.)

In some cities there are ‘boutique marketers’ – companies that specialize in marketing (and sometimes financing) particular types of companies. I have run into this in New York, where the boutique marketer has an amazing rolodex of specialty funds and wealthy investors who could be interested in a particular type of company. They shoot bullets, not buckshot. And they may well be worth the fee if you reach the right audience (especially in a city like New York, where there are just so many funds and investors.)

Marketing can be a lot of fun, but it can be more fun if you are prepared and have the assistance of experts who do it daily. It is tough to gain that kind of experience when you market two or three times a year. There are many out there wanting to win your business. Let them show you how they can help.

Dirk Lever is Managing Director, Institutional Equity Research, AltaCorp Capital Inc.