‘Digitalization. ESG. These are very important. But if we question our members, access to investors comes up first every time,’ says Wim Allegaert, chairman of the Belgian IR association BelIR, talking about the drivers behind an annual trip to Paris. ‘It’s probably a bigger challenge than if you look at large-cap markets like Germany, or the UK, for example.’
The most recent of these trips, held toward the end of November, saw 12 Belgian companies meet with around 40 French investors. BelIR works with Euronext and Degroof Petercam to organize a productive dayin the city that ranks as the fourth most-visited globally, according to IR Magazine’s 14th annual Global Roadshow Report. Some 29 percent of companies touched down in Paris to meet investors over the last 12 months.
A small and mid-cap market
The makeup of Belgian listed companies – very much small and mid-cap – means meeting investors can be ‘fairly difficult,’ continues Allegaert. But the Belgian day in Paris isn’t just about more meetings – it’s also about meetings with investors that are a better fit for the companies attending.
‘It’s a different audience and a different format from what the big investment banks do, because that’s very much large cap-oriented, and the usual names,’ Allegaert explains. ‘Here, if you are a niche asset manager and you want to find hidden gems in the small and mid-cap space, it’s an event you might appreciate.’
A membership driver
The day trip to Paris is a ‘members first’ event. Cédric Biquet, CFO of Ascencio, a small-cap Belgian real estate investment trust investing in retail properties in Belgium, France and Spain, says the event was one reason the company actually joined BelIR. He echoes Allegaert’s thoughts on the more diverse investor meetings available through the BelIR day in Paris.
‘In Belgium, there are banks organizing investor meetings but it’s mostly with the same class of investors: big investors and sometimes not necessarily interested in investing in a small cap,’ he says.
‘It’s interesting to diversify. In Paris, the focus was more on family offices, for example. Smaller investors not interested in tickets of millions of euros. Ascencio is maybe more accessible for them to go into than the big investors that need a big block of shares.’
Both Biquet and Aurore Anbergen, head of investor relations, marketing and communications at Ascencio, stress that corporate access for them is very much about building new relationships.
‘Ascencio is not so active in the equity markets: we do not organize a capital raise every year or two,’ says Biquet. ‘On a long-term basis, however, it’s very interesting to have non-deal roadshows, where we come not to ask for money, but only to improve the visibility of Ascencio, which can have a positive effect if we do organize a capital raise.’
Based on this, both felt the Paris event was a success. ‘New names, diverse and interesting,’ says Biquet, speaking to IR Magazine from London where he and Anbergen were meeting other investors.
Anbergen agrees. ‘If you end the meeting and the investor says, We would like to receive your press release. We would like to stay in touch. We might come back with questions in the future, you feel there’s some interest.’ She also stresses the firm’s longer-term view: ‘We’re not looking for something with good results in the short term. It’s long-term relationships we’re looking for.’
Not about liquidity
Allegaert adds that feedback overall has been positive – and a 2024 version is already on the cards.
Like Biquet and Anbergen, BelIR acknowledges the long game when it comes to measuring the success of the event. Allegaert says BelIR looks at how many investors attended as well as the feedback the association gets from companies.
‘It’s not about liquidity,’ he notes. ‘We don’t think that’s the right benchmark. It’s about getting a full understanding of your strategy and the execution of it.
‘It’s about whether the companies are happy with the outcome: some are very happy with two or three meetings because they are in the process of trying to diversify their shareholder base and without this day they would have had no meetings in Paris. So we attach great importance to feedback from the companies themselves.’
He adds that the ‘majority of companies attend with management, which is a clear sign they think it’s a great opportunity’.
Market access – and analyst coverage – have always been dual challenges for smaller listed firms, but Allegaert says Mifid II further complicated these issues for both companies and investors.
‘Brokers have become much more selective in deciding whether they want to set up coverage of your company,’ he says. ‘That is something small and mid-caps clearly struggle with.’ He adds that for most smaller firms, coverage by three or four analysts is ‘already fantastic’.
The regulation has complicated things for investors, too. ‘Investors are also much more careful about which brokers they work with,’ continues Allegaert. ‘If you do a broker roadshow, it used to be fairly easy and convenient to get a full-day program. Now, from eight time slots, you might do four with a broker, then meet with a specific asset manager separately because there’s no broker link. It becomes a bit more complicated.’
Language connections make Paris a logical fit for Belgian corporate access but Allegaert explains that before the coronavirus pandemic, BelIR held similar outreach in other European destinations, too.
‘Pre-Covid, we did Switzerland, Dublin, Milan,’ he says. ‘We considered Amsterdam recently but that didn’t turn into a concrete plan yet. We considered Madrid as well.’
Those destinations haven’t made a comeback yet and Allegaert says the rise of virtual has also had an impact on the small and mid-cap corporate access scene. ‘It’s a balancing act,’ he says. ‘What you sense is that post-Covid, more investors are happy with video meetings. This is less so on the IR side.’
As the party looking to tell the company story, he sees IR as ‘attaching more importance to being in a room together. Whether that’s via a roadshow, one-on-one meeting or a conference, I don’t think is so important but, for IROs, they absolutely want to step out more.’