So much is at stake: your CEO has less than an hour to engage and inspire the world’s sharpest financial minds. And he or she has to repeat the performance eight times a day for two or three weeks while travelling across countless time zones. He os she might visit three countries and four cities in one day, dawn to dusk, non stop.
It’s your job to make sure the CEO stays on message 100 percent of the time. That’s why IROs with great strategies for roadshows and the talent for managing them properly are worth their weight in gold. With European companies raising trillions of dollars in 2005 through thousands of investor roadshows in Europe, the US and Asia, the importance of putting on a good event cannot be overstated.
When planning a roadshow, every IRO has three options: organize it in-house, rely on the company’s bank or hire an outside agency that specializes in roadshows – and each option has its merits and costs. In-house planning can be less expensive, but requires having a staff with the ability and time to manage the logistics. Many companies plan their own roadshows around earnings, but wouldn’t dream of going it alone for transaction, for example.
Banks are happy to plan non-deal roadshows for big clients. They will also arrange deal roadshows if they are sole coordinator. While the price tag may look attractive, as banks don’t usually charge for organising, the issue in one of control. For example, how often does the bank’s agenda dovetail with management’s?
In large deals with more than one global coordinator, appointing an independent third party to manage the logistics can be preferable, as the members of the syndicate have clearly conflicting sales interests, despite their cooperation.
With multiple coordinators involved, syndicate banks may end up splitting investor meetings inefficiently, sending the company from one end of town to the other during rush hour. With banks competing for success in a placement and “air time” with management, they might book meetings beginning at 6.30 am and running late into the evening – a gruelling schedule that could compromise the executives’ performance on following days. A strong IRO or agency will make sure the schedule is right.
A top agency will look out for IR’s best interests amid fierce competition between banks over which top investors in each key city management gets to see. Although it will charge fees for its services, an agency works for IR. And roadshows are an agency’s core business: it has large teams dedicated to logistics, on-the-road event production, speaker preparation and general management of the event.
