RWE and Q4 partner to tackle Mifid II restrictions on IR

Oct 19, 2018
Utilities provider and digital IR service trial solution to sidelined sell side

German utilities firm RWE and IR service platform Q4 plan to combine their data analytic capabilities to overcome restrictions on corporate access resulting from Mifid II.

Speaking at today’s IR Magazine’s breakfast briefing in London, Gunhild Grieve, head of IR at RWE, said data-based decisions are becoming harder to make for IROs as regulation clamps down on sell-side meetings with investors. ‘We’re improving our direct outreach to investors without needing the sell side,’ she explained.

Before Mifid II, the sell side typically gave corporates investor targets based on information gleaned directly from investors. As sell-side conversations with investors decrease, however, so corporates are being forced to look elsewhere to fill the data gap.

Grieve said RWE and Q4 will exchange and compare data to avoid RWE basing its IR decisions on incomplete datasets. Q4’s AI Targeting tool will provide the analytics for RWE to evaluate alongside its internal intelligence source.

‘Why should I go via the sell side and not to Q4, using it as well as intelligence from our direct conversations with investors, especially if I know the sell side is not talking to everyone anymore?’ Grieve pointed out.

Amit Sanghvi, managing director for Europe at Q4, says the effects of Mifid II are also mounting pressure on IROs to ensure the success of roadshows at which IROs meet investors after using their data to identify pockets of capital in the market. He adds that Japanese retail banking firm Mizuho recently linked regulations to a 20 percent decline in the number of delegates from foreign institutions at its annual conference in Tokyo.

‘There is a lot more focus now on the quality of a roadshow driven by an IRO than one driven by a broker, especially as now you can’t say a broker suggested a meeting,’ Sanghvi said.

‘Do you want to take a scientific approach and combine it with your experience or would you rather stick to the usual and take the risk of the quality suffering?’

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