How Avianca Holdings balances domestic and international investors
Where is Avianca Holdings listed and how does that affect your targeting and engagement?
We are a small-cap company with less than $1 bn in equity listed on two stock exchanges: we first listed in 2011 on the Colombian Stock Exchange, then through an ADR on the NYSE in 2013. We are more interested in our international investors, not because we don’t care about our local investors but because if people see strong performance with international investors, local investors start to buy the stock, too.
What are the main focuses for your investor relations program at the moment?
Right now South America is like the cherry [on the cake] for the big US airlines, which are looking to make big investments here. We’ve had a lot of requests to speak to our management from equity fund houses. In those meetings they ask what we’re seeing, what we expect to see and how we might deal with more competition, so we’re more focused on our financials and our strategy than pushing out our stock. We know who our top institutional investors are and we’re focused on keeping relations with them.
How often do you market the stock outside of Colombia, where Avianca Holdings is headquartered?
The IR team goes to New York at least four times a year. Then sometimes we set up meetings with the C-level executives and fund managers when they’re in New York, Boston or Los Angeles. We set them up and ask our management to tell our story. In the US, we attend a couple of fixed-income conferences, and then the rest of the time we attend meetings in Peru, Chile, Brazil and Portugal. For an airline, the cost of travel is not an issue, so we can travel a lot.
These meetings are important because sometimes traders are not just seeing the market. They are also looking at the quality of communications with the C-suite and they decide to invest not only on the price, but also on other information they get from meetings. We use these meetings to ask about how they’re investing in our competitors. It is very important to us to map out our competitors all the time.
It’s important to market the stock, but we are still a growth stock, so we are more motivated by making sure our investor base feels happy with the company and comfortable with the stock through comments, meetings and our events.
Is it hard to secure management time for targeting and engagement?
Hernán [Rincón Lema, Avianca Holdings’ CEO] used to work very closely with Bill Gates as CEO of Microsoft Latin America, and Roberto [Held Otero, the company’s CFO] used to be an investment banker, so they both know the importance of marketing – and they’re very comfortable with it.
Is the messaging different with domestic and international investors?
The conversations are the same everywhere. The message we are trying to pass on to our investor base is that we’re the full carrier service airline and we think the company has a lot of value. We are a long-term investment and we try to prove that through the projects we are scheduling and developing.