How to Conduct Investor Outreach

When it comes to investor outreach, every investor relations officer and management team has a different approach. While it is important to tailor your IR approach to your business, it’s also important to take into account the preferences of investors. We surveyed hundreds of buy-side professionals representing a variety of roles ranging from Analysts to Portfolio Managers to CIOs  from major cities across North America to get their opinion on how an issuer should conduct investor outreach. On the topic of investor outreach, we asked:

1. Who should be scheduling meetings?
2. How do investors like to be contacted?
3. How often should IROs reach out?

The results of this study will help you build an internal framework for managing investor relations so you can grow your in-house IR strategy. 

To see the full study, download our Views from the Buy-Side E-book.

Who should be scheduling meetings with investors?

It’s not always clear whether the person scheduling meetings with investors should be an IR representative, the sell-side, or a member of the C-Suite such as the CEO or CFO. 

We asked survey respondents whether they had a preference between company meetings that were organized by the sell-side versus those organized directly by the company. Here were the results:

While a considerable percentage of respondents (35.8%) indicated that they did not have a preference, the remaining figures are quite telling. Only 7.1% of respondents indicated that they prefer meetings organized by the sell-side, meanwhile the majority of survey respondents (57.1%) prefer meetings organized by the company. This speaks volumes about the importance of management and IR teams to be more proactive in their efforts to schedule meetings with the buy-side.

Not only do respondents prefer meetings that are organized by issuers directly, 64.3% are also more likely to respond to a meeting request if it is sent by a member of the IR/management team versus by someone on the sell-side.

This highlights the importance of having the ability to conduct your own investor outreach. Whether you’ve reached out directly to investors in the past, or are just getting started, one thing that we’ve learned is that the buy-side is certainly receptive to direct communications from issuers. 

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Among issuers, there are typically two groups that investors hear from: IROs and C-Suite. While it may be ideal for investors to have your CEO or CFO conduct investor outreach, the reality is that your C-Suite often has competing priorities and delegates outreach to IROs. We asked our buy-side respondents what successful IR teams are doing to win their attention. Peter Mann - Partner, Co-Chief Executive at Grayhawk Investment has this advice for IROs:

“They need to be thoughtful, proactive, the good ones can tell you anything about the company as if they are a member of the management team. And too often, they sound that they are too distant and then it's hard to feel that I’m getting valuable info that I could’ve got off their website.” 

The key takeaway from this is that your outreach needs to add value. There’s no point in sharing the same boilerplate talking points with every investor. Do your research before your call, or begin the call with a discussion about what they care about, so you can have a conversation at a deeper level. You may find that they have particular metrics or values that are pertinent to their investment strategy. Being proactive about your outreach and investor research demonstrates that your company can go the extra mile, which is exactly what investors want to see.

If investor outreach is new to your company, don’t panic. Building an investor contact list is an easy first step you can take to start your investor outreach program.

How to Get in Contact With Investors

If you’ve now made the decision to begin reaching out to investors directly for the first time, it’s important to know which means of communication are the most effective. Should you be cold calling investors? Emailing? Getting an introduction from a mutual connection? We surveyed our respondents to find out whether they had a preference towards outreach conducted via email or phone. Here were the results:

As you can see from the above data, 42.1% of investors indicated that they are most likely to respond to a cold email outreach. On the other hand, 31.5% would be more likely to respond to a cold call. Only 10.5% of respondents said that they wouldn’t be receptive to either a cold call or cold email.

While cold emailing investors seems to be the most popular way to go, respondents also noted that the personal touch of a phone call can go a long way. Gerard Ferguson, CEO at Jemmek Capital Management noted:

“The value of a phone call has gone up dramatically, if a management team or issuer is trying to set up a meeting, there is a significantly higher likelihood for me to reply if it is a phone call vs. an email.”

So what can you do to make sure your cold email to investors stands out? Lee Goldman, Senior Portfolio Manager at CI Signature had this to say:

“While I would be more likely to respond to someone that we already work with, what I would be looking for in cold-outreach communication is for them to have knowledge about what we do and give a brief summary of what they do”. 

The key to a good cold email outreach is to customize your message and to give a brief summary of your company. For more tips on cold emailing investors, download our full guide here.

When in doubt, don’t be afraid to mix it up: try following up on an email with a good old fashioned phone call. 

How Often Should IROs Reach Out

Once you’ve determined who your potential investors are and how you’re going to reach them, the final piece of the puzzle is to determine how often you’ll be reaching out. 

One thing to keep in mind is not only the frequency of communications, but also the quality. If you send out the same templated email to thousands of people, you’re failing to provide the attention that each investor deserves. That’s why in addition to more standard communications, it’s important to incorporate more personalized messages from time to time, even if it’s just making yourself available to specific questions from individual investors.  

While there’s no magic number of touchpoints that will please investors, our buy-side respondents all agreed on one key asset: proactivity. 

It isn’t enough to just have personalized communications, below respondents explain the value of having timely and consistent communications:

Here’s what one respondent had to say on the matter:

“The most successful IR teams are proactive in reaching out and setting up periodic touch points. They control the narrative of the story and don't let the sell-side dictate my opinion.”

This is not to say that you should be hounding prospective investors with calls and emails, but rather that you should be adding value to each message. Perhaps your first outreach message didn’t elicit a response, the next time you reach out you can build your company narrative by sharing pertinent updates. Create a cadence with prospective investors so that each time you reach out, you can share new information that builds interest in your company story. 

Be proactive with your outreach efforts, and be sure to add value each time you pick up the phone or send out an email. By doing this you are sure to build interest in your stock and keep your company top of mind for the long run. 

Ongoing Investor Communication

Communicating with existing investors requires a different approach but there are a number of communication strategies you can use that will help you stay top of mind for them.

The most important thing you can do is have an open line of communication with your  shareholders. When surveyed, 73% of investors reported that they prefer very frequent communications with companies they’ve invested in. That may look like quarterly meetings or emails, but the possibilities are limitless. Peter Mann Partner, Co-Chief Executive Officer at Grayhawk Investment Strategies Inc. noted:

“I like open communications, I don’t care if I have a quarterly meeting. I care that at pertinent times when decisions are being made that they have time to address my concerns.”

Just like when you are reaching out to a prospect for the first time, the most important thing you can do is be proactive. Your investors want to hear the good, the bad, and the ugly, so don’t be afraid to pick up the phone or send them a note whenever you have material changes to share. 

In short, successful IR teams should not only set up a strategic communication cadence with new investors, they should also reach out to existing investors to update them on any material changes to the business. You may find that having a dedicated IRM that can track conversations will help you stay organized.

Final Thoughts

Getting in front of investors can be challenging, especially if you’re taking on in-house IR for the first time. Luckily, buy-side professionals want to hear from issuers! Be sure to cover multiple channels and be prepared to make a few cold calls to maximize your potential reach. Lastly, be proactive about staying in touch with active investors.