22 Oct Frankfurt Notes – the blog for the capital market community in the DACH region
In our blog, we address current capital market topics from the IR perspective. We look forward to your feedback, topics or contributions.
Investor days – new opportunities especially for smaller companies!
Until recently, investor days were the privilege of large and medium-sized companies. Bringing together a larger number of analysts and investors in one place and addressing them with a programme rich in content and variety was not feasible for most companies from the SDAX and below the DAX index family. Structural breaks have ensured that something new has become necessary and possible:
1) The erosion of the sell side has accelerated, especially in the DACH region. Smaller brokers have left the market, as have the research departments of major banks. The fatal consequence: where only a few analysts produce research on a share, the established multipliers of the equity story are missing. Consequence: The direct line to the buy side and the independent presentation of the investment case are becoming more relevant, especially for smaller companies. Investor days are an ideal medium to present oneself well and in a self-determined manner and to generate attention for one’s own company.
2) This certainly plays into the hands of investors who want to follow companies and their development even more closely and directly. For they too are reacting to the thinning sell side and the strategic decision in some places to internalise research more strongly. In other words: the demand for investor days is also increasing.
3) The naturalness with which hybrid or completely virtual formats are used and accepted today opens up completely new possibilities for holding events in front of a critical number of investors. If active participation from the offices in London, Frankfurt, Paris and New York is ensured, one or two dozen live participants from the core target group can quickly be won – often an illusory undertaking at an on-site event of the past.
4) Digital best practice suits smaller companies: no participant likes to sit in front of a screen for more than three hours to watch a virtual event. Sure, most participants also expect more variety, film inserts, changing cuts – but these can be well prepared in advance and thus reduce the potential for errors compared to earlier purely live events.
The critical issue of resources remains. The preparation effort for an investor day is, to be honest, enormous and keeps the IR department and the presenters busy for many weeks. For many smaller IR departments, this is difficult to cope with in addition to their other busy workload. So why forego the opportunities of such an event? The alternative is to take on outside support in terms of process and content and thus seize the opportunity to put the company in the limelight.