Sponsored Research a strategic tool for investor communications Gabriel Didham CFA, Managing Director
2 Research is the language of Investors
3 Research defines how the market understands your investment story
4 … and it is Research that drives your relationship with the capital markets
5 –93% read pre-IPO research –53% read research before meeting management Of professional investors...
6 For private investors … Source: Communicate Research
7 Research makes a difference... Researched companies can have up to double the market valuation of un-researched companies in the same industry Increased research coverage can double average trading volumes Trading costs can be as much as 10% of the share price on under research companies
8 Source: JCF Factset /Objective Capital
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10 … for a company and its shareholders A lack of research means: –raising capital is more difficult and expensive –lack of knowledge => higher trading costs => reduced liquidity –lower share price Up to 80% of quoted companies could benefit from more research
11 The issue is how to get research coverage Companies have traditionally relied on brokers and investment banks But for smaller companies: –brokers’ fragmented distribution means multiple coverage is needed –whole segments of the market are untouched –regulation means you need separate coverage in each market –and widely known to only be economic for brokers when linked to investment banking
12 So how can Sponsored Research solve these problems?
13 High quality Sponsored Research delivers: Reach: –professional investors –private investors –buy side –international –industry –debt and equity Quality coverage: –supports trading in your stock –corporate transactions –supports your other advisors –and wide-ranging generation of business opportunities
14 High quality Sponsored Research demonstrates: Commitment to shareholders Commitment to transparency
15 but most importantly… It builds a “Strategic Relationship” with the capital markets a relationship that supports a company now …..and as it grows