We live next door to the largest capital market in the world. And while many of us have a strong base of investors here in our home market, there is merit in exploring how to diversify your investor base. Notwithstanding the long closure of the world’s longest border, the U.S. is a natural place for many of us to start, given size and time zones.
Having a U.S. listing and analyst coverage is, of course, the easiest way to get attention. But with the transition away from fully virtual continuing to be slow, consider whether there could be opportunities to benefit from a virtual environment to attract wider interest.
Do your research: Analyze which U.S. investors have dialed into virtual non-deal roadshows or investor days during the pandemic. Peer analyst coverage can highlight analysts that might be interested in you. Examine the agendas of U.S. sector-focused conferences to see which your peers attend. OTC markets can give some indication of a level of interest in your name.
Reach out: While U.S. coverage is always the most powerful way to get the attention of U.S. investors, a number of IROs I have spoken to have had success over the last year in engaging more with non-coverage U.S.-based analysts and corporate access teams. In a virtual world, some investment banks seem to be adopting a more global view of how they service their U.S.-based investors. They appear to be more willing to introduce new names where management access was previously more limited, but which might be suitable for global portfolios.
Leverage your assets: If you have access to a targeting service, use it to help narrow down a list of targets suitable to your investment profile and use that to consider what cities could be suitable targets. If you are doing an investor day, consider how to make your invite list broader by announcing your investor day via channels you might not have used before. If you are listing in the U.S., leverage your investment bankers. If you have a good relationship with a Canadian investor who has U.S. funds, consider seeking that investor’s advice.
Speak to the big investors: The U.S. is a big market, and the big investors can take sizeable positions. Make sure you know what contact has been made with them historically and the reasons they have never bought, the reasons for them exiting, or the likely triggers for them to take a position. In a world of data analysis, a Fidelity or a T. Rowe at the top of the register can create a ‘halo’ effect and drive interest from others.
Consider your business reasons to go to the U.S.: As with most investor targeting, getting management engaged in roadshows will naturally be easier if you can tag along with other travel they need to undertake and return regularly. And with travel likely to be more limited post pandemic on both sides, a little more focus will likely be a feature of our future as IROs. If management attends a regular customer or vendor event on the West Coast, consider targeting California. If you have employees in Chicago or Minnesota, see if you can find some sensible targets in the mid-West. If you have a business presence in Texas, consider that. One of the most interesting investor events I ever organized was a visit to a team embedded in a customer site in Rhode Island that really allowed us to highlight the product set we were selling and to make it real for the investors.
Tell your story: It is important to think about how your story will play in the U.S. Consider seeking out the advice of analysts, IR agencies or media agencies that can help you think about how your story will play and whether they can help with strategies to get investors’ attention. If your product is sexy or unique or has a distinctive angle that will capture attention and your marketing team is trying to build a U.S. customer base in key investor markets or through attendance at big conferences, think about whether there is any way to piggyback on the time and dollars they are spending in key markets to get investors’ attention.
While much of this advice applied before the pandemic, the current situation presents some different angles to explore and the opportunity to be well-positioned when the border finally opens and travel returns to some semblance of normal.