While the field of Investor Relations (IR) has grown over the course of the past few decades, it is still predominantly viewed as a function that supports communications requirements within public equity capital markets. Reasons for this assumption are understandable — public companies face more stringent regulatory requirements and usually have a considerably greater number of investors as compared to private entities. However, as global financial markets have become more complex and communications media have modernized, what some may consider non-traditional audiences of the IR function have begun to seek greater attention.
These audiences include both institutional and non-institutional investors in public and private investment funds, private equity firms, and fixed income securities. Most of the disclosures produced for the former audiences in this list are rudimentary in nature and don’t present constraints on management’s time or directly impact a company’s cost of capital. However, investors in fixed income securities do impact outcomes of financing activities, and they’re becoming more interested in topics other than price and coupon rate.
Through recent consulting work with client investors, we’ve heard from many fixed-income managers that they’ve become frustrated with the communications practices of their invested companies. Furthermore, they wish to receive a similar level of service, responsiveness, and access from corporate issuers as their equity-investor counterparts. With this in mind, we set out to gain some greater insight on the perspective of the debt investor, understand why they felt overlooked, and establish some guidelines to help both public and private companies better meet the communications needs of this important group.
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