How do IR teams prepare for hedge fund meetings?

Jun 11, 2017
More than 700 IR professionals reveal how they engage with hedge funds in research report

While a minority of companies actively target hedge funds as prospective investors, the vast majority meet with hedge funds on a regular basis, according to recent research from IR Magazine.

The survey of more than 700 IR professionals finds that 93 percent have met with a hedge fund over the past year. On average, respondents held 46 meetings with hedge funds over the 12-month period, with senior management attending just under half of those.

So how do IR teams prepare for these meetings? At this point, it’s important to note that today hedge funds are a highly diverse group and the approach will depend on the type of fund and its existing relationship with the company. Still, the research helps to give a broad idea of what companies view as useful when approaching hedge fund meetings.

Information gathering

The findings show that the most popular methods of information-gathering are similar to how companies would approach meetings with any investor: sell-side sources are the most popular, followed by buy-side databases.

The third-most popular option is reaching out to the hedge fund directly. The high position of this option shows that many IR teams today understand that hedge funds are becoming increasingly open to direct engagement with companies. Indeed, some have brought in corporate access specialists to help facilitate such contact.

The research also asked respondents how happy they perceive senior management to be about attending hedge fund meetings. The average score given by IR teams is 5.9, suggesting CEOs and CFOs are often reluctant to attend such meetings.

Management happiness

Victoria Hyde-Dunn, director of IR at Visa and a NIRI San Francisco board member, discusses how the payments firm engages with hedge funds in a Q&A included in the research report. When it comes to meetings, she says IR tends to handle initial interactions.

‘Unless the hedge fund has already established a relationship with senior management through prior interactions, IR will typically maintain the early interactions,’ Hyde-Dunn explains. ‘After there is a better understanding of the company’s approach, you can more effectively make the call on whether to get senior management members involved.’

The full research report can be downloaded here

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