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March 2013
Satisfying our curiosity Lloyd Bevan unearths some interesting results from last year’s IRO survey In the summer of 2012, as part of IR Magazine’s global IRO survey, we asked a number of questions relating to IR departmental responsibility, outsourcing and external IR service provision. Findings from these questions went on to be used in the IR Magazine Global Practice Report 2012 and were expanded upon in last month’s article on IR outsourcing (see Letting the outside in, February 2013, page 8). One question from this survey that we have not reported upon – until now – concerns IROs’ favorite service providers: we asked respondents to name their first, second and third-favorite service providers, the services they provide and their reasons for choosing them. The question was asked more for our own curiosity than for the compiling of a formal ranking, but the results have proved too interesting to keep to ourselves. Although the initial question was asked in an informal manner, we have analyzed the results with the same rigorous methodology we use for our IR Magazine Awards, with a system of points allocated proportionately to first, second and third favorites. More than 450 individual ‘votes’ on IR service provision around the world are represented here.
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Which is your favorite service provider? IR Magazine founder Janet Dignan assesses the comments of the IROs who responded, and gives her take on the findings
T
he IR Magazine annual surveys of investor relations practice around the world ask IROs numerous questions about their working lives: how many people they have in their teams; how long they’ve been in IR; which cities they travel to on roadshows; how much they’re paid; how much input
favorite service providers: Global Provider 1
Thomson Reuters
322
2
Ipreo
166
3
Orient Capital
63
4
Shareholder.com
46
5
Computershare
39
6
King Worldwide
36
=7
MZ
35
=7
NASDAQ
35
Bloomberg
31
=10
FTI consulting
30
=10
Georgeson
30
9
30
Points
they get from senior management; and much more besides. We publish the results of these surveys both online and in a series of hard-copy publications, from the substantial annual IR Magazine Global Practice Report to smaller reports on roadshows, for instance, or crisis management or say on pay. It’s all good serious stuff but, in a more light-hearted vein, in last year’s survey we also asked respondents to name their favorite service providers – in fact, their top three favorites – and to tell us what they use them for and why they like them so much. Of course, relationships between clients and service providers vary enormously: some are very businesslike, others more personal; some are short term, others go on for years, even decades, with a real sense of loyalty and trust being established between service provider and client. The difference may just be a feature of the nature of the work or a product of the personalities involved. Without going into such matters in far more detail, it’s hard to be sure which ones fall into which categories, but the reasons given by companies for favoring certain consultants and advisers over others betray some broad groups.
Leader of the pack Take Thomson Reuters, far and away the most popular service provider not just globally but also in each of the three biggest geographical groups of Europe, Asia and North America. IROs selecting Thomson as their favorite cited a whole range of services provided to them by the group, from targeting and shareholder ID to webcasts, consensus earnings estimates, FirstCall, and more. As for clients’ reasons
www.InsideInvestorRelations.com | March 2013 IR MAGAZINE
RESEARCH
Services rendered Services offered by first-preference service providers
46%
49%
10% 27%
13% 15% 16%
21%
Shareholder ID, targeting & surveillance Website & webcasting Financial PR, press release distribution & newswires IR consultancy services & support Annual reports Conference calls Proxy solicitation Other services
for citing Thomson Reuters as their favorite, these were many and various, too. Many mentioned the breadth of the company’s offerings, the length of their relationship with Thomson, the firm’s responsiveness, quality of service, timeliness and reliability. Those of our respondents blessed with a capacity for brevity – or were they just short of time? – provided a selection of one-word answers for their choice of Thomson as their favorite service provider. Examples include: accuracy, delivers, discount, legacy, outstanding, quality, reliable, responsive. Others were (relatively) expansive but even then there were no wasted words: ‘I use it daily. Outstanding,’ one said. From another: ‘Provides industry-leading financial content and advanced analytical tools.’
Runners-up Chasing hard on the heels of Thomson, both in North America and globally, comes Ipreo. Ipreo’s fans are predominantly in the US and Canada, with just nine
voters beyond North America: five from Europe and four from Asia. Most of these clients describe the Ipreo services they use as encompassing targeting, surveillance and shareholder identification; and they are particularly enthusiastic about the individuals they work with at Ipreo. ‘Good analysts,’ said one. ‘Insightful, happy to help the team with things that may not be formally in scope – [Ipreo] feels like a real partner to IR.’ Another said: ‘We have a solid long-term relationship with Ipreo. It has proven time and time again its ability to step up and deliver what it says it will.’ Orient Capital, third-placed in the global popularity stakes, is also second in Asia and third in Europe. The firm isn’t active in the US, unlike its top three peers, which makes its ranking particularly impressive. And the firm certainly has enthusiastic supporters, who call its service ‘fantastic’ and describe it as ‘exceptionally professional’.
favorite service providers: US & Canada Provider
Points
1
Thomson Reuters
193
2
Ipreo
119
3
Shareholder.com
46
4
NASDAQ
33
5
Computershare
28
=6
Marketwire
21
=6
SNL Financial
21
IR MAGAZINE March 2013 | www.InsideInvestorRelations.com 31
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favorite service providers: Europe Provider
Points
1
Thomson Reuters
54
2
King Worldwide
35
=3
Equity Story
27
=3
Makinson Cowell
27
Orient Capital
21
5
Like the other global top three service providers, Orient Capital specializes in shareholder analysis, tracking, targeting and related fields. To some extent, this helps all three firms in these rankings since, according to the findings recorded in the IR Magazine Global Practice Report 2012, this is the area of activity corporate investor relations departments most commonly choose to outsource. Indeed, 64 percent of IR departments that have primary responsibility for targeting and shareholder ID at their companies say they commission external service providers for this aspect of investor relations.
Together but apart In fourth place comes Shareholder.com, wholly owned by NASDAQ OMX. And of course NASDAQ is currently in the process of finalizing its most recent acquisition: the IR, PR and webcasting businesses it’s buying from Thomson Reuters. That presents the prospect in the near future of a single group truly dominating the investor relations service space – even more so than now. But the fact that similar numbers of IROs voted for Shareholder.com and for NASDAQ suggests clients
don’t necessarily regard recently merged entities as single businesses; in many cases, loyalty to the brands and the individuals providing the services persists long after a deal has closed and the rebranding is complete. Examples of this attitude include the separate listings of Computershare and Georgeson in the rankings, despite those two firms now being one entity called Computershare Georgeson. Brunswick and Merchant Cantos appear separately, too, as do King Worldwide and Capital Precision. We’ve chosen to accept the names as proffered by IROs, because we assume this is evidence that these are the businesses to which they remain loyal. The tables on these pages are straight tallies of
favorite service providers: Asia Provider
Points
1
Thomson Reuters
50
2
Orient Capital
27
3
ShareInvestor
24
=4
Hill & Knowlton
21
=4
MZ
21
firms being cited as first, second and third favorites by a random selection of corporate clients around the world. There’s no weighting for company size and we’ve paid no attention to service providers’ own published client lists. Regardless of such fine details, the tables show some surprising presences and absences among the IR service providers around the world – of which doubtless their current, future and former clients will take note. zy
Favorite providers by respondent cap size
Small/mid-cap
32
Large/mega-cap
1
Thomson Reuters
1
Thomson Reuters
2
Ipreo
2
Ipreo
3
NASDAQ
3
Orient Capital
4
Shareholder.com
4
Bloomberg
5
Orient Capital
=5
Georgeson
=5
King Worldwide
www.InsideInvestorRelations.com | March 2013 IR MAGAZINE