Webinar summary: How important is the individual to UK PLC in the current climate?
Today we hosted guest speakers from the London Stock Exchange, PrimaryBid, Equitory and Merian Global Investors for an informative discussion about equity fundraisings and broader corporate engagement with retail investors. This has been a topical issue in recent months due to the large number of capital raisings across UK markets and as companies have navigated through AGM season. Beyond this, and over a longer period, the need for companies to consider retail investors alongside their institutional holders has become increasingly important and many of the reasons for this were highlighted during the webinar, along with practical advice for how to effectively integrate a programme for retail investor engagement into the IR calendar.
A full replay of this webinar can be seen over in our event archive here.
- There has been a strong level of fund inflows in this pandemic crisis, in contrast to last financial crisis, and retail has been a significant part of this.
- We are also continuing to see strong demand for passive funds, and this is expected to continue. As such, it is becoming increasingly important for listed companies to be included in a globally recognised and tracked index.
- London has seen higher levels of capital being raised than other markets in recent months, reflecting the early guidance that was issued by the UK Pre-Emption Group.
- This guidance highlights the importance of soft pre-emption. Retail investors still want to be able to take part in capital raisings.
- The LSE saw PrimaryBid as an innovative Fintech to partner with. The platform gives individuals the ability to participate in IPOs and fundraisers on the same terms as institutional investors.
- For publicly listed companies including a retail offer can lead to better outcomes, governance, liquidity and engagement.
- Including a retail offer gives all stakeholders, including company employees, an opportunity to participate.
Practical considerations for ongoing engagement:
- Fully understand the retail ownership of your stock and get a sense for retail trading through brokers and market makers.
- Also monitor sentiment in retail investor forums and blogs.
- Bridge the information gap – retail investors do not have access to sell-side research. Research paid for by the company may be a viable option as this can be widely distributed and can also be beneficial for institutional investors where sell-side coverage is limited.
- Use platforms such as the LSE issuer services website where information can be tailored to your company and accessed by individuals.
- Make the most of social media, although ensure this is carefully managed by the IR function
- Provide retail investors with access to management through events beyond the AGM. This could include hosting a retail investor webinar or taking part in dedicated retail investor conferences.
- Do your research – usually events where retail investors are paying to attend provide a slightly more sophisticated audience.
- Ultimately engaging with this audience will support good governance and liquidity and is therefore often encouraged by the buyside.
- Having a small number of large institutions dominating the share register is not healthy.
Thank you to our sponsor for this event, Orient Capital, and our guest speakers:
Marcus Stuttard, Head of UK Primary Markets & Head of AIM, London Stock Exchange
James Deal, COO of PrimaryBid
Clara Melia, Founder, Equitory
Richard Watts, Fund Manager, Merian Global Investors
Published 18 June, 2020