When Agnico-Eagle Mines plans a roadshow, it picks out specific institutions it would like to introduce to management. The company’s target list, however, doesn’t always match up with what sell-side firms have to offer.
‘Bank-brokered roadshows don’t always meet our objectives,’ says Dmitry Kushnir, investor relations manager at the Toronto-based gold miner. ‘In some cases, the clients don’t have relationships with the brokers; in other cases the clients may be too small for the brokers.’
This situation led Agnico-Eagle Mines to consider other options as part of its overall targeting strategy. During this process, the company discovered another avenue to connect with the investors it would like to meet. That avenue is Meet the Street, an electronic corporate access service owned by Instinet, which allows companies to take control of their roadshow itinerary.
The desktop system works in this way: IR professionals log in and create a list of buy-side accounts they would like to meet in their target city. IROs can identify which investors are interested in them because investors submit their watchlists of tickers to Meet the Street. Invitations are then sent out by Bloomberg’s instant messenger service and email, and the recipients can apply for meeting slots online.
Meet the Street offers an alternative to working with the bulge-bracket investment banks, whose motives can be driven more by the desire to generate trading commissions than by the desire to satisfy the investor introduction needs of their corporate clients.
While satisfied with roadshows organised by the sell side, Mary Jensen, vice president of IR at Douglas Emmett, a real estate investment trust in Santa Monica, California, recognises the benefit of keeping your options open. ‘Sell-side analysts want to put management teams in front of the clients that spend the most money with their firms,’ she says. ‘I find using a third party just makes things a little more objective and transparent.’
This approach paid dividends in December, when Jensen used Meet the Street to take management on a roadshow to New York. The company saw investors it had never met with before, three of which ended up taking significant positions, Jensen states.
Amanda Wagemaker, IR associate at Boston, Massachusetts-based Atlantic Power, was also impressed by the service. ‘The meetings it set up for us were very productive,’ she explains. ‘The buy side seemed both prepared and interested.’
Both small and large-cap firms stand to benefit from a service that puts power in the hands of issuers. For smaller companies, for example, it means that a lack of sell-side interest is no longer a barrier to getting out on the road.
At the same time, companies of all sizes suffer at the hands of brokers that put commissions before clients. ‘I have been very pleasantly surprised by the number of Fortune 100 companies that have agreed to use our platform,’ says Dan Dykens, founder and president of Meet the Street. He also points out that one of the top 10 companies in the US by market cap recently used Meet the Street to take its senior management around New York and Boston.
No more cold calling
Meet the Street is designed to make the process of scheduling your own roadshows as straightforward as possible. For a start, there is no need to pick up the phone and ‘dial for dollars’ – another term for cold calling prospective accounts. Instead, Meet the Street uses Bloomberg’s instant messenger service and emails to ping investors directly.
When investors respond to a roadshow invitation, they select three different meeting times and rank them in order of preference. With this information, the issuer can construct an itinerary based around fund managers’ availability. Final requests for confirmation are then sent out to buy-side accounts. Drawing up the schedule took as little as 20 minutes, reports Douglas Fox, vice president of IR at Lincolnshire, Illinois-headquartered Zebra Technologies.
Several time-saving features are included in Meet the Street’s online interface. There is an embedded GPS system showing issuers the distance between each fund manager on the schedule, allowing roadshows to be crafted in a way that minimizes time spent in the back of a car.
Meet the Street also has Expedia’s travel reservation system built in, so companies can search for and book any flights or hotel accommodation they may require. In addition, documents can be uploaded and shared with investors in advance of the meeting, so there is no need to lug around heavy pitch books.
A concierge desk is on hand to provide any additional support that may be required, from ordering lunch and arranging furniture in meeting rooms to checking whether investors have called in sick on the morning of the roadshow.
‘There is no rule in investor relations that says you must have either a sell-side analyst or an institutional sales person from a brokerage firm in the office with you when you’re talking to the buy side,’ says Dave Dragics, CACI’s senior vice president of IR, who used Meet the Street for a New York roadshow this March. For him, the online service is a good option for IR officers who want ‘greater control over their outreach program and less reliance on the sell side.’