Capitalising on growing global equity investor interest
Building your profile in international markets should be a top priority for IROs, as the volume of cross-border capital flow gathers pace. Larisa Kogut-Millings looks at the global challenges. This article was first featured in issue 83 of Informed magazine – a UK Investor Relations Society publication.
Over the last two years we have seen a marked increase in fund flow into equities. This represents a major opportunity for companies looking to attract new investors or access capital markets for strategic reasons, specifically IPOs. This is being driven by a demand for return, both capital and yield, and a related increase in risk appetite. Ever more fund managers are looking beyond their domestic markets for higher returns.
A recent FTI Consulting survey of over 100 global institutional investors conducted in January-February 2014 showed that:
- 78% of investors believe there is increasing competition for capital across borders;
- brokers are increasingly being considered too conflicted to be providers of impartial advice;
- 58% of investors believe companies should expand their marketing efforts to reach a more global set of investors;
- 91% of investors say the regulatory or political environment is important to their investment decision; and
- 71% of investors anticipate an increase in crossborder shareholder activism.
The changed corporate access regulatory regime and continued globalisation of fund managers creates new opportunities and challenges for IR professionals. The opportunity to get in front of new funds and increase the breadth of shareholder registers can only be successful if the company can overcome the challenges of targeting the right investor through an effective marketing programme.
Careful consideration should be given to the annual roadshow schedule and the effectiveness of meetings held, ie how many of these meetings were with targeted investors?
Posted with permission from The Investor Relations Society - Informed. Copyright ©2014. All rights reserved.