Navigating the Brave New World of Sell-Side Engagement

November 12, 2019 05:30 PM EST
Strategy Formulation Domain 1:
Strategy Formulation
Marketing & Outreach Domain 4:
Marketing & Outreach
Capital Markets & Capital Structure Domain 8:
Capital Markets & Capital Structure

On Tuesday, November 12, 2019, NIRI NY hosted 59 members for an engaging panel discussion, “Navigating the Brave New World of Sell-Side Engagement,” held at IHS Markit’s offices.

The panel, which was moderated by Cindi Buckwalter, Head of Investor Relations at Minerals Technologies and VP, Programs of NIRI NY, featured:

  • Drew Borst, Goldman Sachs:Vice President and Lead Analyst of the Media and Entertainment sector
  • Gregory Lundberg, OUTFRONT Media:Senior Vice President, Investor Relations
  • Marci Ryvicker, Wolfe Research:Managing Director; Equity Research Team Leader covering Media

The discussion began with an overview of the post-MiFID II landscape, including the rise in buy-side corporate access activity and the decline in sell-side coverage. Panelists went on to share their personal experience and views on how to successfully attract and retain analysts and how to navigate the buy-side in this rapidly changing environment. Key takeaways from the discussion include:

  • Post-MiFID II, investors are being more selective in the number of conferences and NDRs (non-deal roadshows) they do with the sell-side. When making marketing decisions, IROs should note that corporate access is a key component of how sell-side analysts are evaluated.
  • Both bulge-bracket and boutique banks offer unique advantages when it comes to marketing. Panelists encourage IROs to consider the individual strengths of the analyst, rather than the size of the bank, when making decisions about where the management team should spend time.
  • Analysts are covering more companies than ever before. To improve the quality of coverage, during a slower period (i.e. outside of earnings), panelists recommend reaching out to a sell-side analyst’s junior associate to schedule time to review the story in more detail.
  • Smaller-cap companies can face challenges when it comes to establishing analyst coverage. Analysts note that they prefer to cover companies that are under-covered, and they are more likely to cover companies when they’re getting inquiries about the company from the buy-side.
  • IROs should contact an analyst directly to try to form a relationship or offer a corporate access event. Analysts’ biggest challenge is managing time and resources, so if IROs make initiating coverage as easy and as efficient as possible, their odds for coverage will improve.
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