Uncovering What Portfolio Managers Want From IROs

January 14, 2020 09:00 AM EST
  Domain 4: Marketing & Outreach
  Domain 7: Strategic Counsel & Collaboration

On Tuesday, January 14, 2020, NIRI NY hosted members for an engaging panel discussion, “Uncovering What Portfolio Managers Want from IROs,” held at Bloomberg's offices.

Moderated by Matt Cino, Head of Strategic IR and Managing Director at PJT Camberview, the panel featured:

  • Russ Bloomfield, Columbia Threadneedle Investments
  • Laura Huang, JPMorgan
  • Nate Mahrer, Macquarie Investment Management

The discussion focused on strategies on how investor relations officers (IROs) can deliver value to the buy-side and build strong relationships with their investors. The three buy-side panelists shared perspective on their investment philosophy, approach to risk management and the key factors they consider when evaluating a potential new investment.

Key takeaways include:

  • When reporting on certain metrics, panelists advise IROs to clearly indicate the relationship between a given metric and the Company's P&L – and ultimately, its cash flows. Making this connection helps minimize research for the buy-side and provides insight into the business.
  • When formulating an investment strategy, portfolio managers and analysts try to paint a picture of the broader industry landscape, and then drill down into a particular company to understand how it fits into the industry. Providing industry data, including market share and trends, can help the buy-side better understand the industry as a whole and demonstrates that the IRO is thinking about the investment in the same way as the portfolio manager, which lends credibility.
  • Panelists advise IROs to be more forthcoming with negative news. One strategy is to pair a potential negative event with a positive development, such as a big customer win, to help frame the development.
  • Being transparent and providing context is critical when it comes to building trust with the buy-side. Investors don’t like uncertainty, and if a Company makes an announcement that is seemingly “out of the blue” it can break the investment thesis and damage credibility. If IROs are upfront about a deviation from a previously-announced plan or guidance, investors are more likely to support management over the long-term.
  • The investor relations website plays a critical role in analysts' research process. Intuitive navigation, such as a grid housing the last four quarters' earnings materials, can help simplify the research process for the buy-side. Panelists recommend including an Excel supplement, easily accessible contact information for the investor relations team, infographics or charts and other helpful tools.
  • Panelists agree that they would like the IRO to be their proxy at the corporate level – ensuring their voice and interests are heard when management is making decisions.

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