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May 18, 2011

Roadshow guide to New York

For IROs, a roadshow to New York can feel like performing on Broadway

Back in the last century, when IR magazine first did an IR guide for New York, there were genuine – if exaggerated – fears that visitors would be mugged almost on arrival. It is now one of the safest cities in the US, and even more so in mid-town and downtown Manhattan. There are more ways to get money from you than just snatching your wallet, however.

As Duke Coffey of GA Kraut Company warns his clients when they bring a roadshow to town: ‘Get set for sticker shock – it’s not cheap.’ His other message is to hurry. ‘It’s never been cheaper than in the last few years of recession,’ he adds.

The investment, it has to be said, is far from wasted. In return, Manhattan offers unrivaled focus, with almost everybody and everything you need in close proximity. ‘In terms of access to investors, sell side, buy side, analysts, bankers and press, there is probably a greater concentration in New York than anywhere else in the US, possibly even the world,’ says Keith Rabin of KWR International.

‘It’s much harder when companies try to do this at their corporate headquarters, because – unless you’re Warren Buffet – attendance can be light. Typically, the sell-siders will tell the buy-siders, There’s no need for you to go to Nebraska. I’ll go and report back to you. In New York, you get to see them all. The opportunity for face time with other executives drives attendance.’

The big time
Certainly, for IR practitioners, hitting New York is like an actor working on Broadway: it carries cachet across the world. Even in an age of webcasts, in Manhattan you get bigger audiences, tougher questions and more prestigious participants than almost anywhere else in the world.

‘It even enhances the value of your webcast,’ Rabin points out. ‘Just look at the financial, national and international media you find here: TV, press and radio. It just doesn’t get any better than this!’

There are other advantages, according to Rabin, that make a New York roadshow economical despite the cost of New York hotels and facilities. ‘While here, you can meet with your lawyers and accountants, marketing and advertising companies,’ he explains.

Where to stay

Grand Hyatt
109 East 42nd Street
+1 212 883 1234

New York Palace
455 Madison Avenue
+1 212 888 7000

301 Park Avenue
+1 212 355 3000

But apart from such earnestly mundane activities, what about New York’s cultural activities, the theatres, the museums, the world-class restaurants? In fact, it seems that most of the executives coming in do not have the leisure time to relish such things. ‘It’s the famous New York minute,’ explains Coffey.

‘These people are pressed for time. Usually they don’t want diversionary, off-point activities. Most just want to come, listen, ask questions and get back.’

If you can make it there...
Coffey admits, however, that enterprising IR departments with flair and big budgets do use the type of non-traditional venues that New York has in abundance. In particular, overseas companies bringing presentations to the city want the prestige of just being there.

‘Of course, they want to reach out to investors, but sometimes they are almost as concerned with showing the people at home that they made it to New York as they are at making an impression on Wall Street,’ chuckles Rabin. ‘They’ll bring the media over with them to show that they are here and they have rung the bell.’

That, of course, is one of the unique highlights New York offers to boost a CEO’s ego: ringing the bell to open the NYSE or being featured by NASDAQ at Times Square. ‘It’s entirely feasible if you are listed – after all, the exchanges have to find someone to do it every day,’ comments Rabin. ‘It’s a great photo-op, good PR and makes everyone feel good. We’ve even held a briefing at the NYSE.’

‘One client did a presentation at the Natural History Museum,’ recounts Coffey. ‘Others use the Asia Society. Outside the hotels or clubs, however, that means hiring special event planners – and that adds to the cost.’

Indeed, clubs are a special New York resource, where the Metropolitan, Yale, Harvard and many similar establishments can offer facilities with gravitas and class undistracted by streams of tourists, or even add dramatic flair, like the National Arts Club on Gramercy Park.

‘It depends what you want, what size of gathering,’ says Rabin. ‘And in some cases you need to have a member to do the booking and sign the check.’

That can still be better than booking a hotel for a lunch. ‘If you and I go for lunch, then $80 to $100 for two is pretty good,’ says Rabin. ‘If you book a lunch for investors at a hotel, on the other hand, the quality is going to be far worse, and it’s going to cost up to $100 per person – it’s a real profit center for the hotels.’

Where to eat

135 West 42nd Street
+1 212 319 1660

Ben & Jack’s Steakhouse
219 East 44th Street
+1 212 682 5678

Peking Duck House
236 East 53rd Street
+1 212 759 8260

Coffey admits clubs are better venues when a company wants to have private meetings with existing or potential shareholders, although they are far from the only option. ‘Previously, they were used much more so than today. The hotels have sharpened their game, however, and now offer a better package,’ he says. ‘The Waldorf, the Hyatt, the Palace – they are all very good at this.’

One big advantage of using a hotel, naturally, is location, points out Coffey. ‘Companies like having the executives and the rest of the team staying at the same place as the presentation, instead of trailing everybody all over Manhattan,’ he explains.

That is, of course, true of major presentations, but for smaller meetings and one-on-ones, the compactness of Manhattan allows for very productive roadshows, with breakfast and lunch meetings with analysts punctuated by private meetings during the day.

Eating out
Surprisingly, Coffey adds, corporates tend not to take advantage of the wealth of cosmopolitan cuisine the city has to offer. ‘The food has to be good,’ he says. ‘That’s one thing they all care about it. But they want something acceptable to all kinds of medical conditions and tastes, so it’s more likely to be grilled chicken than half a cow.’

While that cuts agonizing over menus, it does not relieve the need for carefully planned logistics. ‘You need the limos to plan the timetable to match the traffic patterns, and to avoid ping-ponging across the city,’ adds Coffey.

And if things go wrong, contingency planning is essential. Coffey confides that back-up plans include Metrocards, to rush the parties onto the subways during traffic snarl-ups, which can be much quicker, and will at least give visitors an authentic look at life as lived by the natives. And that’s not so bad: Mayor Bloomberg himself uses the subway at rush hour. It’s all part of the New York experience.

At the hub of the New York financial community’s commute is the Campbell Apartment – the palatial office of the former railroad president John Campbell, who fitted it out as a Florentine palace in the corner of Grand Central Terminal.

It offers a decadent and appropriate venue for meetings between entrepreneurs and investors, and owner Mark Grossich hosts innumerable gatherings there, ranging from full roadshows to sit-down lunches for up to 75 or cocktails for up to 125.

‘Companies sometimes use us as a VIP lounge before bigger events in the nearby hotels,’ Grossich says, adding that his latest venue, the Empire Room in the Empire State Building, is proving just as popular, because of the location’s iconic stature – and its proximity to the New Jersey commute. Like New York itself, it’s all about location.