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Thursday, 25th April 2024 |
| Day in the Life: an investor relations adviser |
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| Jonathan Neilan is a principal of K Capital Source, an independent capital market communications and advisory practice, which was founded in October 2002, following the €3.8 billion leveraged buy-out of Jefferson Smurfit Group, and offers investor relations advice. |
MMorning Getting up is determined by a number of things: what is scheduled for the day, whether I’m going to the gym etc. but it’s usually between 6am and 6.30am. Working on a transaction makes for an earlier start - anywhere from 5.00am on.
6.30am Living close to work is a benefit - it takes no more than 10 minutes in bad traffic and, in the early mornings, approximately 5 minutes.
Our client base consists of both Irish and overseas (predominantly US) companies. As a consequence, there are usually numerous emails to get through first thing. I go through all email and have a quick look on the news wires. If anything needs an immediate response, that takes priority - otherwise I head for the gym. I go spinning twice a week between 7am and 7.45am; on alternative days I swim if there’s time. The gym is next door to our offices which is convenient.
8.00am The day starts properly at 8am and I respond to all emails and follow the morning’s company announcements. I review Irish and European equity and high-yield research, international news wire services and industry websites and trade publications. I have breakfast at my desk.
8.30am One of the principal focus areas of our business is cross-border investor relations. Our primary experience has been working with European companies accessing the US capital market, however, we have started the process of working with US companies to raise their profile with European institutional investors.
Two of our US clients are east coast regional banks listed on the NYSE, and we are working with them to build a capital markets presence in Europe. We are engaging in a primary research project for one of the banks (the other having being completed earlier in the year) which allows us to define the broadest possible range of interested institutions in the company and determine the investors’ time horizon and investment considerations. The process will provide an empirical, data-based foundation for the European capital markets programme. This morning I am contacting investors who have already met with the bank’s management team and collating feedback on their presentation and investment thesis.
The practical thing that his process also highlights is that people no longer pay full attention or respond to email - it seems the volume of information now received by investors by email has diminished many of its benefits - we have found that people generally respond better to personal contact and we get a more complete perspective which is valuable for our clients.
10.15am I have covered sufficient ground on the banking research project this morning and move on. Mark Kenny, the other principal at K-Capital, is travelling in the US and calls to check in. We run through various email and news and catch up on how things are going. There are a couple of changes to his schedule which we run through and finalise.
10.30am Mark and I discuss a feedback paper we are preparing for another client in the UK. We recently researched and executed a series of meetings with Irish institutions for them. With a consistent, committed approach to this market, we believe they can, in time, generate incremental demand for their stock and continue to geographically diversify their investor base.
12.00pm I finalise the feedback note and send it to our client. I go out to get some lunch and go to the bank. Lunch today is coffee and a sandwich. It’s good to get out of the office for a couple of minutes during the day. Either Mark or I will go out to get lunch - if we don’t have any lunch commitments for work, we eat at our desks.
1.00pm The US markets starts to open and I spend lunch time talking to overseas clients and reviewing further US equity and high-yield research. I talk to some colleagues in our partner firm’s office in New York and catch up on a number of projects that are in process.
2.00pm We are working with another client on revising their depositary bank agreement for their American Depository Receipt (ADR) programme. The ADR market is an area in which we have growing expertise and there are a number of areas where we can add value for clients, in particular, on their depositary bank agreement. This agreement is the basis for the administration of the ADR programme. I am negotiating with the depositary bank, on behalf of our client, on protection mechanisms from short-selling of the company’s stock, maximising the benefit to the company of the ADR voting structure and ensuring that the company is realising the maximum financial benefit from the ADR programme.
3.30pm We are working on a proxy solicitation process for a client who is engaged in a transaction which has, as a precedent condition, a shareholder resolution to be voted at an EGM.
Our role is to execute the proxy solicitation process to ensure that shareholders return their votes in order to achieve the requisite threshold at the EGM so the transaction can proceed.
The process involves managing the information flow to and from shareholders and working with the global custodians and institutions back offices to ensure that portfolio managers and individual shareholders are aware of their entitlement to vote, the implications of the vote and provision of the appropriate materials.
The process becomes increasingly complex when there are short-sellers involved. Today, I am talking with our client, our partner firm in New York and other advisers regarding managing the process and the implications of a short-position on the company’s register. We are also talking with our contacts at prime brokers to clarify exactly where the voting rights lie.
5.00pm Mark calls from the US to participate in a conference call with a European client on aspects of its corporate governance as it relates to their capital market goals. There are significant differences in regulation and corporate governance in Europe and the US which need to be addressed to achieve success in any cross-border programme (both for European companies going to the US and also for US companies in Europe).
We discuss with out client the importance of consistent and transparent communication. Our discussion includes the area of financial reporting. US companies report quarterly and, we would argue, to a higher reporting standard than their European peers. The call concludes and we commit to putting a framework together for the client on how best to move their capital markets communications and reporting process forward.
6.15pm Time to make a few calls and follow up on email. We have an early meeting with a client and so I need to finalise materials and a presentation for the morning.
7.00pm I head for home around this time. Again, working with US clients means that the day often goes later.
9.00pm From home, I talk to Mark to go through material needed for tomorrow. He is travelling overnight from the US to Dublin and we’ll meet at 9.00am and start another day with a potential client.
In writing, the day appears long. In practice, it goes quickly. Our business is just one year old but with a lot of luck and support (and some hard work!) we are off to a fast start. We believe we are well positioned in a market where companies increasingly value independent and objective capital markets advice. |
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| Article appeared in the December 2003 issue.
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