Investor targeting: How they do it at Indorama Ventures
When it comes to investor targeting, there is a wide range of practice in the IR world. Some companies take a strategic approach, setting annual targets. Others are more hands-off and leave the bulk of the work to brokers. Indeed, some IROs reject targeting as a useful activity completely, assuming that investors that are a good fit for your business will find you.
To explore the different approaches to investor targeting among IR departments, we’re starting a new series of mini-profiles where companies from around the world explain their approach. The first Q&A is with Richard Jones, head of IR at Indorama Ventures, the Thailand-based chemicals company.
How far ahead do you plan your targeting activity?
We plan all roadshows/investor meetings one year in advance, in December the previous year. We circulate to brokers what we want to do and our preferred meetings – such as top funds – and then allow brokers to come back with their proposals. We try to match what we want with what they suggest.
Do you set yourself targeting goals or shareholder-base goals?
We track our shareholder base and seek to increase holdings by funds that tend to buy and hold. At present, foreign and local institutions hold the majority of the free float, but we target abroad those that can invest in Thailand, ASEAN, Asia ex-Japan, and so on, and funds that know the petrochemical industry.
To what extent do you rely on brokers to support your targeting efforts?
We decide principally which investors we want to attract and use brokers to set up meetings. We accept that sometimes we should meet funds we don’t know (recommended by brokers) in order to broaden our shareholder base.
Do you use any technology to support your targeting efforts?
We currently use Bloomberg as well as our own database to identify some targets according to criteria like size, ability to invest in Thailand and sector specialization (the petrochemical industry). When the information is unavailable, we use brokers’ own database information.
How do you typically approach meetings with new investors?
We prefer to meet new investors as an IR team first because we do not think senior management should be providing very basic information on a first meeting, like who we are and what we do. Once we know the investor and it knows us, we can arrange a meeting with senior management. Exceptions include where an investment individual who knew us well in a previous company has moved and in his/her new position wishes to meet senior management, and where senior management is in an investor conference with us all day. Even then, we will advise that IR handle basic questions.