‘There is plenty of scope for IR-only meetings in New Zealand,’ says Jarden
Jarden is an investment adviser with an unusual backstory. If you watch the video on the firm’s 60-year history, it’ll probably be the first time you see a man in a vest – wielding an axe – in finance.
The video walks us through the life of former pro-rugby player Ron Jarden, ‘an average Kiwi who refused to be average,’ who founded Jarden – in the back of a menswear store – when he retired from the game at just 26. Today that company is ‘the leading advisory group on both sides of the Tasman,’ with services ranging from investment banking to capital solutions and wealth management.
In the first of a two-part interview, IR Magazine hears from Alana Barron, director of institutional equities and head of client solutions at the Wellington-headquartered firm about generalist investors, the benefits of a Q&A and why New Zealand works for IR-only meetings.
Barron is a qualified ski and snowboard instructor who began her career on Wall Street, as an analyst at JP Morgan, where she worked with leading global brands like Tiffany & Co, Danone and PepsiCo. She then joined the New York office of New Zealand Trade and Enterprise, eventually serving as trade commissioner and consul.
From there, Barron spent eight years with Deutsche Bank’s equity research sales team in Sydney and Hong Kong, before returning to New Zealand in 2015. She joined Jarden’s institutional equities research sales team for Australia and Asia, before moving into investor relations and relationship management.
Tell us about the New Zealand investment scene and why companies should consider making the trip (pandemic allowing)
New Zealand has an experienced and informed institutional investor base, and is well serviced by international and local brokerage firms like Jarden. This provides good access to research. There are approximately 16 institutional fund managers, mainly based in Auckland and Wellington, which makes the market easy to cover in a mix of one-on-one and group meetings within a couple of days.
A growing KiwiSaver market (New Zealand’s non-compulsory superannuation scheme) means NZD funds under management (FUM) are growing rapidly. Alongside this, the wealth adviser and institutional mandate market has seen strong growth.
Since the Covid-19 pandemic began making its impact, the retail investor market has grown rapidly. The market has also deepened, in terms of the number of younger investors diversifying away from a focus on property investing. ETFs and other new retail broker businesses are encouraging more investing into global markets along country, sector, and thematic lines.
The New Zealand managed fund sector accounts for approximately $240 bn. The largest constituents of which are the high growth non-compulsory superannuation schemes KiwiSaver, NZ Super Fund, and the government no-fault accident compensation scheme Accident Compensation Corporation.
Total allocation to equities is approximately $120 bn – or 50 percent. International equities constitute the larger part of that allocation, estimated to be approximately $90 bn. Hence, allocation to international equities across the total managed fund sector is 35 percent-40 percent.
Most of the international equity allocation is passive, or managed by external mandates with international fund managers. However, a meaningful portion of international equities FUM is managed by a local community of approximately 20 active institutional fund managers, and by the five largest private wealth management firms.
The five major retail brokers can very efficiently host wealth adviser briefings, in person and via video call to their regional offices across New Zealand, ensuring coverage of a large part of the high-net-worth investor base. Financial and business media can also be covered in a roadshow relatively easily, ensuring depth of coverage in a visit, and that key points can be addressed.
What do New Zealand investors like to see from a company when it comes to investor relations?
Many New Zealand buy-side investors are generalists and run comparatively small teams. This means there is value in providing them with some current context and taking them through any particularly complex or unique situations that have recently occurred.
Companies should be able to cover the key points of recent results and guidance succinctly and then move to a more active Q&A-style discussion of the operating environment, supplier, customer, and competitor dynamics.
Additionally, it would be useful for companies that are maybe less ‘well-known’ to come with an industry and sector backdrop, an elevator pitch to introduce the company, and then an in-depth proposal when required.
How much scope is there for IR-only meetings on a New Zealand roadshow?
There is plenty of scope for IR-only meetings in New Zealand – investors recognize the country’s geographical distance from many major markets. If there’s an opportunity for an experienced IR professional to spend an extra day or two in the country after an Australian roadshow, or there’s some other catalyst for them to be there, then New Zealand investors will appreciate that and take a meeting.
There is also less sensitivity than in some other markets about needing to see only those in the C-suite. If there’s anything that can’t be answered by IR, then a follow-up at a later date is always possible.