The best way to upset an investor is to shock them with news they hadn’t anticipated, treasurers learned at the ACT’s annual corporate funding conference held in London on 10 October.
Speaking at a lively panel session on investor relations, David Meade, head of credit research at Ignis Asset Management, said investors don’t like to hear “things out of the blue that we weren’t expecting”. He added that when bad news did need to be broken, it was important that this was done as soon as possible and that companies maintained an ongoing dialogue with their investors thereafter. “Follow up, don’t hide,” he said.
Mike Hardman, head of flow credit sales at Lloyds Bank and another panellist, said that investors value face-to-face meetings with the senior executives of the companies they invest in. “In a case of stress, investors want to look into the whites of the eyes of a decision maker,” he said. “Hiding behind an investor relations person is not great.” He added that while board members usually attend equity roadshows, they are less frequently seen on debt roadshows. “It’s that level of access that investors increasingly want on the debt side,” he noted.
John Swift, group treasurer at software supplier Sage, told delegates that investors are primarily focused on strategy. “The long-term vision of the company is what investors are interested in,” he said.
Addressing the issue of how often investors should be updated, Andy Mead, senior investor relations officer with energy company National Grid, said that besides “set-piece interactions”, such as full-year and half-year results presentations, there are opportunities to talk to investors at conferences. “Keep a note of when you haven’t seen people,” he said, but he warned of the dangers of making contact too frequently.
“Investors are busy. They don’t want to be bothered by an email every week letting them know that nothing has happened.”
In conclusion, Mead said: “You should always take the time at a meeting to ask for investors’ views and feed those back to the CEO.”
Sally Percy is editor of The Treasurer