5 tips to attract New Investors

Fine Tune Your Investor Targeting to Attract the Right Shareholders

Investor targeting is a powerful tool that helps the IR team to identify and engage investors. It is the main responsibility of the IRO to facilitate the dialogue with existing and potential investors. Targeting can also be used to re-engage current investors and solidify the relationship with them.

Targeting the best investors is a priority, although an effective investor targeting plan is not so easy to develop. Time and budget are the main reasons why the IR team is not able to do that. According to a study published by NIRI, Investor Targeting is one of the most critical services for the success of IR programs.

The targeting process can be simple or complex. The main objective is to make the process work for each Company. Depending on the companies’ needs, it can be developed once a year or every quarter. But the key point is to make the right approach to gain new investors and engage old ones.

With this in mind, here are 5 tips that can help IR teams attract new Shareholders.

1)    Identify your Investors

The first step is to analyze your investors. Some questions need to be answered to get as much data as possible on existing shareholders.

Who are your investors? (types of investors)

Why are they investing? (investors’ story)

Which type of investors sell your shares?

Who invests in your peers?

2)    Relationship

To fine-tune your investor targeting strategy, you need to understand your investors and talk to them. According to Euronext, only 12% of institutional investors would buy shares after one meeting, and 52% would buy after three meetings.

So, the big tip is talk, talk, and talk some more. Sell your Company using your best arguments.

3)    Engagement

Show your investment strategy to potential investors. Investors want to know the strategy and are impressed by certain themes (AI, technology, ESG, climate change, people). If you get investors’ attention with one of these themes, you can succeed.

4)    Strategy and tools

Investor targeting tools can provide vast expenses of information. Use all kinds of data available to find the best matches for investors.

Also, cross all kinds of data, website visits, downloading content, webcast list, IR Talks, IR public meetings, and social media. This is a different way to reach potential investors.

5)    Keep going…

Create a funnel process and update it whenever necessary. The targeting plan moves if the market moves. An investor not buying today may buy if the stock market changes.

An investor never misses an opportunity. Keep in mind that if your business undergoes a big change, such as M&A, new product, or new executive, an investor will be probably looking at it.

The ideal match is the alignment between investors’ investment focus and your company’s business strategies. Pre-meeting intelligence on investors’ general knowledge of the company and industry, historical ownership details such as cost basis in your company or your peers, and recent holdings activity, along with points of consideration before making investments, will make for a more promising list of investors.

Investor Targeting is a process where relationships and knowledge are important. It is a long way and sometimes the results will only be seen in the long time.

Marcele Magalhães

Partner, Market Intelligence