With just over a week to go before the international IR community gathers in Amsterdam for the Global Forum & Awards – 2018, IR Magazine takes a look at the stories behind some of the key sessions across the two-day event.
The event, which last year was held in Paris after a number of years in New York, this year heads to Amsterdam, where attendees will gather at the Amsterdam Marriott Hotel for two days of IR trends, best practice and innovation.
TUESDAY, OCTOBER 9
A practical guide to Mifid II: Seize the access opportunity, with Brian Christie, head of IR at Agnico Eagle Mines; Lorna Davie, director of investor relations and corporate access manager at Credit Suisse; and Robert Rethy, head of IR at MOL.
The Mifid II roundtable at IR Magazine’s Europe Think Tank in June this year saw a number of IROs talk about finding holes in their roadshow schedules, with tales of even very big funds missing from the list. While the mammoth regulation has definitely thrown up challenges, with even the world’s biggest sovereign wealth fund openly stating that it will not pay for meetings, it also presents opportunities to take greater control of a more direct approach to corporate access.
Governance: Is ESG a new tack for activists? with Michel Karimunda, IRO at Nordea and Andreas Posavac, managing director of global M&A, governance and corporate advisory at Ipreo.
Last year Trian Partners attracted some attention when it added a statement on ESG, writing: ‘Trian believes that ESG issues can have an impact on a company’s culture and long-term performance and that companies can implement appropriate ESG initiatives that increase their sales and earnings. We also believe that the consideration of ESG factors enhances our overall investment process.’
In fact, in its 2018 look-ahead, Activist Insight predicted a rise in activists at least positioning themselves as having an ESG focus. ‘All activists will seek to portray themselves as keenly interested in ESG issues,’ wrote the firm. At the same time, former IR Magazine editor Candice de Monts-Petit’s article Investor activism and ESG no longer an oxymoron? looked at how Jana Partners teamed up with pension fund CalSTRS to petition Apple on its social responsibility.
Against this backdrop, IR Magazine asks what this trend means for IR.
Passive investing: How technology is changing the dynamics for investors and IR, with Serge Enneman, IRO at Flow Traders; Kirst Kuipers, managing director and head of iShares Netherlands at BlackRock; Phillippe Roset, head of SPDR ETFs Netherlands at State Street Global Advisors; and Martijn Rozemuller, managing director and head of VanEck Europe at Think ETF Asset Management – a VanEck company.
One impact of the rise of passive investing on IR, says Victoria Hyde-Dunn, head of IR at 8x8, in a recent interview building up to IR Magazine’s 30th anniversary, is that ‘it’s definitely becoming more and more challenging to know who owns you. Even beyond [exchange-traded funds], passive investors and [high-frequency trading], there are 13 trading venues in the US alone. You get the 13F filings, but that’s 45 days after a transaction.’
She adds, however, that this is where IR really comes into its own. ‘The value of IR is being able to ask a shareholder on the phone whether it still has a position in you and, if so, what it is – and it’s happy to tell you. It comes down to IR 101, working with the sell side and corporate access. This is a relationship business and you need to make sure you’re getting in front of the right investors.’
WEDNESDAY, OCTOBER 10
Expand your investor base with innovative approaches to investor targeting, with Sergio Tomas Gámez Martínez, head of investor relations at Grupo Santander, and Larisa Sadovnikova, head of investor relations at Inter Rao.
Shareholder targeting is one of the areas building up to an almost complete overhaul as new machine-learning technologies seek to upend the old peer analysis process. A number of new and established companies started rolling out the technology this year, including Q4 and newcomer Intro-act, both of which use algorithms to predict stock buying potential over a 90-day period.
While the technology is new and it’s likely IROs will continue to use a mix of methods for the time being, when asked whether this technology has the ability to make the old ways obsolete, the answer from Q4 is: ‘absolutely’.
Governance: How to engage with proxy advisory firms, with Andrew Gebelin, head of research at Glass Lewis.
Proxy advisory firms should be regulated: that was the finding of a report by conservative think tank the Manhattan Institute in May this year. With ISS and Glass Lewis controlling 97 percent of the market for proxy advisory services in the US, the Manhattan Institute argues that they have an outsized influence on the behavior of issuers and investors. Regulation or no, this market dominance means it is essential that IROs know how to engage with these proxy giants, making this session a Global Forum essential.
Building the business case for IR and improving efficiency, with Dr Veronika Bunk Sanderson, director of communications and investor relations at Telefónica Deutschland, and Alison Griffin, vice president of investor relations at Dynex Capital.
This session in some ways links back to the Mifid II panel from day one of the event, and to the IR Magazine Global Forum & Awards – 2017. A year ago, Europe was prepping for the introduction of Mifid II and Ipreo shared data built from its own information as well as from the World Bank and IR Magazine that indicated a rise in demand for events heading into 2020. Access to management will become increasingly important for many investors – especially at small and mid-cap companies, where management might be less well known and where there’s a perception that there’s less publicly available information out there, said Ipreo. But it also forecast the number of meetings facilitated by the sell side to fall from around 85 percent in 2016 to less than 30 percent in 2020 as a result of Mifid II.
The result? Ipreo said issuers would be expected to engage more in direct access, as well as taking an increasingly proactive approach to outreach. That means they would need more people, bigger in-house budgets or more money to spend on outsourcing. In a nutshell, IR needs to be even more efficient and to build its business case.