David Lloyd-Seed has been named as the new head of capital markets at Powerscourt, as the consultancy continues the expansion of its IR team, after Marina Calero and Eavan Gannon joined former sell-side analyst Alison Watson to form the team late last year.
Lloyd-Seed, chairman of the UK's IR Society and former head of IR at Telefonica, will work within the firm’s IR practice and take a wider role ‘to help spearhead the consultancy’s advice on capital markets communications both for its existing and new clients,’ according to a press release announcing his appointment.
Talking to IR Magazine about what he thinks makes the team unique, Lloyd-Seed notes the fact that a number of the Powerscourt team are IR practitioners themselves. ‘They’ve done the job in-house, and I think that having done that job, you can properly understand what it entails – whether that’s how you lay out your stall and talk to investors or the market more widely or help management teams think about the approach to capital markets and how capital markets are functioning on a day-to-day basis, and what that means for you as a corporate.’ And indeed, through her work with Powerscourt, consultant Calero currently serves as in-house IR for retirement housebuilder McCarthy & Stone.
Adding that he views the world of IR as ‘being in a competition for capital,’ Lloyd-Seed notes that Mifid II has muddied the waters somewhat on how companies can win this competition. ‘There were so many talks and debates in the run up to Mifid II and there were some things you could plan for but until it landed, no one really knew what it meant. It’s a bit like planning for Brexit,’ he says.
‘Certainly the communication loop is broken in terms of the way it used to function and we’ve seen companies that have got a lot more incoming enquiries, as investors build up their own corporate access teams,’ adds Lloyd-Seed.
One sticking point for many corporates when looking to outsource any function of the IR program is building trust with their consultant and allowing elements of their most important relationships to be handled by an outsider.
So how does Lloyd-Seed address this issue? ‘Any advisor should take the time to really understand the business properly. And that’s not just what’s come out in report and accounts – that’s about getting under the skin of it, the business,’ he says. And while he adds that this has to be a ‘good, strong two-way relationship,’ he does acknowledge that ‘there will always be a point where there’s stuff that is internal that should remain internal’.
Setting out your stall
Lloyd-Seed also offers some advice for companies when it comes to building a best-in-class program.
‘Some companies can be guilty of answering analysts’ questions – which are not necessarily the questions that investors want answered. So make sure that you know what your investment case is and you are laying that stall out so that you appeal to the right investors for your equity.
‘Secondly, I think it is also about being cognizant of emerging themes,’ he adds. ‘One that is quite high on the agenda at the moment is sustainability, or wider ESG issues, and being aware of how you need to promote yourself.’
On the sustainability front, he adds: ‘I think that companies do an awful lot of good stuff already and are well ahead of the investor curve on this, but they need to make sure they’re integrating that into their corporate narrative and investment case.’
Finally, he says companies need ‘to make sure you’ve got your feedback loop working properly’. Expanding on the point, he highlights: ‘The conflicts that exist in the market mean that this feedback loop isn’t always functioning properly. Investors generally are happy to give their thoughts to a company but, understandably, they want that to be discreet. If management is operating with a properly informed feedback loop, they’re going to make better strategic decisions.’