The Changing Dynamics of International Investor Targeting



Investor targeting is an integral part of investor relations. As the investment landscape becomes increasingly global, no longer can companies rely on a strictly North American focus. Historically, for IRO’s, the process of determining who and where to target outside of a company’s typical road show regime has been challenging. However, the introduction of data analytics, big data and algorithms are not only changing how companies determine targets in new markets but these technologies are also improving efficiency and effectiveness creating a more strategic approach to international investor targeting.

Typically, in larger European markets including London and Frankfurt, IRO’s work with their domestic banks who have developed strong relationships with diversified and industry specific funds. However, in smaller locales, institutions often have limited reach and networks. European investors can represent a significant opportunity to increase liquidity and create an investor base focused on long-term value creation all while improving valuations. Unfortunately, the challenges IRO’s currently face sourcing European investors in smaller markets often limits this type of investor targeting. As Meghan Brown, director of investor relations at Endeavour Silver Corporation states, “we wouldn’t be able to find them (investors in smaller European markets) unless we had a relationship with them”. The practice of targeting family offices and high net worth investors in these markets, where the tendency to rely on strong banking relationships does not carry as much weight, can be time consuming and often lead to limited ROI. However, these centres often represent an untapped and underserved source of capital due to the challenges associated with identifying local niche high net worth investors and family offices.

In an era where technology is often advancing faster than businesses can adapt, is it any surprise that new technologies are entering the investor relations realm disrupting the antiquated investor targeting model of the past? Forward thinking IRO’s and public corporations are among the first to leverage data analytics to access targeted current and prospective investor information. New technologies provide IRO’s knowledge regarding what investors are looking at their corporate presentation and what investor viewing behavior looks like. One of the immediate applications of these technologies lies in improving the current investor targeting practice specific to smaller European locals. New technologies not only identify specific investor interest but also provide insight into what explicit information these investors are seeking. IRO’s can now better prepare for valuable presentations, by pre-emptively addressing specific concerns of individual investors in addition to preparing management for valuable face to face conversations.

While large and mega cap companies garner significant attention in larger European centers, how do the rest effectively source and target investors without relying on brokers or the sell side? Furthermore, once a meeting is secured, how does an IRO properly prepare in order to convert a meeting into an investment. Today’s dynamic marketplace requires new innovative technologies that add colour to a landscape that was once black and white. Data analytics for investor relations provides the platform for the next evolution of the IRO. A 2016 Rivel Research Group study found that at any one point in time an investor is looking at 129 different companies. With investors looking at such a vast number of opportunities, investor targeting practices can represent a competitive advantage. The common practice of peer-based investor targeting will be replaced by innovative technologies that improve efficiency and efficacy. Will you be ready

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