Investor Relations

How to manage investor relations in an organisation?

Learning objectives

Investor relations: “Investor Relations is the communication of information and insight between a company and the investment community.”
Source: http://www.irs.org.uk/about/definition-of-investor-relations

1. What processes are involved in investor relations?

·         Means of communication used in investor relations
`?

·         Investor materials and events

Event examples (GE):

-2015 Annual Meeting of Shareowners
GE to convene its 2015 Annual Meeting of Shareowners in Oklahoma City, Oklahoma.

-GE Aviation & GECAS Investor Meeting at Paris Air Show

David Joyce, President & CEO – GE Aviation, and Norman Liu, President & CEO – Aviation Financial Services will present

 SOURCE: Ge.com, (2015). Investor Relations: Events | GE.com. [online] Available at: http://www.ge.com/investor-relations/events

Other examples:

-Annual shareholders meeting
-Earnings release

·         Which factors are most important in reliable financial communication and investor relations?

?

2. Who is involved in investor relations?

·         Influence of shareholders

·         Shareholders-own parts/shares of companies

·         Investors- when they buy company shares they get a certificate showing how many shares they have and owning shares enables them to a portion of the company’s profits which is issued as a dividend. (dividend= a sum paid regularly to shareholders out of a profit)

·         shareholders- normally offered a fixed payout per share if company is bought out. (because they are partial owners)

allowed to vote at shareholder meetings

• Influence of stakeholder- ?

Source:

Referenceforbusiness.com, (2015). Shareholders - strategy, model, type, company, business, Types of shareholders. [online] Available at: http://www.referenceforbusiness.com/management/Sc-Str/Shareholders.html

3. Difference between existing and potential investors?

·         How to acquire new investors

*****Understand what the investors want

-what investors will think about/consider:

1. Does the company's product or service address a large and growing market need?

2. Can the company scale quickly enough to take advantage of that market opportunity?

3. Does the company have a defensible competitive advantage?

4. Can the management team execute on the potential outlined in the first three criteria?

*****Look for the Best Fit and Make Connections

*****Share your visions- who understands your views the best

SOURCE:

Inc.com, (2015). [online] Available at: http://www.inc.com/guides/2010/08/how-to-find-willing-investors.html 

·         The main drivers and medias used when making investment decision

"The study showed geographies different on their use and consumption" 

-European institutions preferred LinkedIn

- the plurality in US asset owners leaned more towards Twitter

-Asia Pacific preferred YouTube.

-78% of institutional investors in Asia Pacific :Facebook- used at least once a month (source of financial information)                           -23% in the US                             -17% in Europe.

LinkedIn- the preferred source of information( 85% using at least once a week.)

SOURCE:

Lokhandwala, T. (2015). Social media influences investment decisions, shows research. [online] IPE. Available at: http://www.ipe.com/news/asset-managers/social-media-influences-investment-decisions-shows-research/10007592.fullarticle