Maintaining investor contact under pandemic conditions
Australian nonbank issuers have been among the nation’s most active when it comes to global investor engagement. With international travel off the cards for the foreseeable future, issuers’ investor-relations approach had to adapt.
GUESDE I have been amazed at how all players in the market, around the world, have adjusted to a new way of doing things. If you had told me a year ago that we would be having this conversation in the way we are now and it would all go smoothly I would have had doubts.
We have seen logistics slow down some processes in Japan, but appetite remains. Some areas have required rapid change, such as trading – where market users were still using stamps. This is something that cannot be done at home! Processes had to be addressed and changed.
Investors generally have been able to adjust quickly, but I think in the long run it is not sustainable to work like this. We have had long talks with some issuers on video and it does work, but there is no replacement for face-to-face meetings.
I think there will always be a place for big, in-person conferences because this is a great way for issuers and investors to meet. It will probably become more important to attend these in future, because it is also likely that the way roadshows are undertaken may not return to the way it was.
We did a lot of offshore calls for our last deal and it did work, but I do not think it replaces an in-person meeting and the relationship you gain from it. Perhaps meetings do not need to be as frequent, but they are invaluable – especially if you do not know the investor particularly well.
RIEDEL I think relationships are well established. What has changed in the last six months is the frequency of engagement, particularly outside of new transactions.
Investors are relaxed whether the engagement is by phone or video – they just want real-time access, to understand how the business is performing and to be able to ask questions about the data we provide. I do not think we are losing any engagement from the move to a digital environment as everyone has adapted positively.
MARSDEN There is general acceptance of the current operating environment. We had calls with US investors over the past few weeks where there have been babies crying and dogs barking in the background – it is a similar situation everywhere, in other words.
We have been more active in communicating with offshore investors in the last 4-6 months than we would have been otherwise and it is all on the basis that we know we cannot travel.
AUSTIN These calls are good when you have an established relationship with investors. I cannot think of any domestic investors where it is not perfectly fine. We also did a lot of offshore calls for our last deal and it did work, but I do not think it replaces an in-person meeting and the relationship you gain from it. Perhaps meetings do not need to be as frequent, but they are invaluable – especially if you do not know the investor particularly well.
AUSTIN I think the idea of a roadshow has been turned on its head and will be done mostly by video calls. Any travel would be outside of a deal window and would be for relationship building. Deal roadshows are exhausting – you usually do six meetings in a day and then fly to another country and do the same again.
GUESDE Funders and investors are sharing the same constraints with a focus on cost reduction. Having tickets for investors and funders to visit issuers and do on-site due diligence will be more challenging.
We now have the precedent for doing everything by video so I think there will be a permanent change. I agree with James Austin, though: the impetus may be less for issuers formally to visit investors.