Senior management must worry about market perceptions.
Poorly communicated investment stories, negative market surprises, misunderstood strategy or operational performance will damage management credibility and result in lower public valuations. Weak market perception and share price will also drive negative media coverage that will further erode company and management reputation.
Navigating the challenges of the public markets means investing in a top-flight investor relations (IR) capability.
Good IR is critical for companies at all stages of market and operational cycles:
- Even well-run companies with attractive investment stories will trade at a discount to fair value if they do not engage the market effectively
- For companies facing performance or strategy issues, good IR is even more critical as effective market engagement can protect management credibility and buy needed time to execute a turn-around or seek strategic alternatives
- For newly public companies or those planning to go public, good IR is essential to ensure markets understand their investment story, business model and financial prospects
In our view, few companies do this well or appreciate the strategic role that IR can fill. Too often IR roles are understaffed (in numbers, but particularly in experience), or outsourced to agencies that are public relations-focused with limited IR know-how. As a number of recent high-profile IPOs have demonstrated, sub-par IR capabilities (poorly communicated investment stories, weak expectations management and ineffective market engagement) have contributed to underwhelming share price performance and negative media coverage.
We see an opportunity to advise companies – those public or planning to go public – on how to build or strengthen their IR function. Strong IR, which shareholders require in any market environment, will drive improved management credibility, enhanced market understanding of the company, and ultimately higher share valuations.
Gravitas IR Advisory is different from typical providers of IR consulting. We are not former journalists for whom IR is a sideline. Nor are we advisors who have only known bull markets. We bring decades of in-house IR, buy-side, sell-side and investment banking experience. We have a solid track record in building and managing some of the most respected IR departments in Financial Services.
Critically, our experience is our difference as we have managed through bull and bear markets, financial and company crises, transformational M&A and large-scale capital raising. Furthermore, we have built relationships with sell-side and buy-side analysts, portfolio managers, hedge fund managers, rating agencies, stock exchanges and IRO’s over decades.
We understand the strategic role that good IR plays. How it can provide management indispensable insight in confronting one of its greatest challenges — navigating the public markets effectively.