Internationalizing your shareholder base: Seven tips for IR teams

Webinar Participants Say Companies Should Consider Multiple Factors Before Going Abroad

According to a survey conducted during IR Magazine’s recent webinar on how to internationalize your shareholder base in partnership with Q4, the vast majority of IR professionals want to increase their proportion of non-domestic investors.

However, as the webinar panel explained, international positioning does not work for all companies. Companies should consider a variety of factors before committing additional resources to overseas investor marketing. Below, we summarize seven key points from the discussion.

Start with your home market. Q4 IR director Tish Crawford-Jones explained that companies should consider whether they have strong relationships and effective messaging with domestic investors before expanding their business. You need to make sure everything is “going well” before focusing on more complex or less familiar markets, she said.

Check the mood. Another factor is understanding the current perception of your market and industry. Europe has indeed had its ups and downs over the past decade, Crawford-Jones said. But now some European companies are outperforming their North American counterparts, causing global fund managers to shift their portfolios.

What is your exposure rate? When a company is very focused on one part of the world, looking beyond that region may not be the best use of their time. In contrast, overseas operations or sales can provide support because investors will become more familiar with your business, said Samantha Senna, director of IR for the fourth quarter. This may help to better “receive and understand” your message, she says.

Looking forward to more reviews. The audience heard that it was getting harder to justify international travel. The growth of virtual engagement during the pandemic shows that much can be achieved without getting on a plane. IR budgets are also tightening. That means IR teams need to work harder to account for returns from overseas travel, Senna said.

Get in touch directly. An audience survey found that 56% of webinar audiences had increased their direct connections with international investors over the past three years, a finding that echoed the panel’s experience. Crawford-Jones noted that some regions, such as the U.S. market, are more receptive to direct contact than others.

Brokers are still key. While the number of direct engagements is growing, brokers remain key to international targeting efforts, Crawford-Jones said. If you’re testing the waters, a broker is your best bet for reducing risk, she said. Some clients find it particularly successful working with a broker who belongs to a group that owns an investment arm, she adds. They understand the market well because they are an institution themselves, she said.

Remember cultural differences. When traveling to other regions, IR teams should familiarize themselves with local business etiquette to avoid embarrassing lapses, the group said. For example, in some cultures, business cards are highly valued and must be given and received in a specific way, Senna said. “Before you go, spend all your time and money making sure you understand every cultural difference and prepare accordingly,” she said.

To watch the webinar recording, click here.

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