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Oct 27, 2020

Investors miss field trips under Covid-19

‘Touch and feel’ events are big loss under pandemic’s social restrictions, professionals say

Although the switch to virtual investor relations (IR) during the Covid-19 pandemic has brought a number of benefits, investor field trips are an option hard to reproduce, and may be one of the first events brought back when in-person gatherings are possible again, according to panelists at the IR Magazine Forum – Canada 2020 hosted by Compliance Reporter’s sister publication.

In a session on investor targeting, panelists from IR teams and the buy side discussed how the pandemic has brought benefits and drawbacks to investor outreach. 

Initially there was ‘huge appreciation’ for virtual corporate access, said Clare-Marie Hill, head of EMEA corporate access at Fidelity Investments. ‘It was in some instances better if people didn’t have to travel – when people have families, they don’t want to be away a lot,’ she explained.

But one downside has been the inability to take part in bespoke field trips, Hill added. She said Fidelity’s investment professionals like to join events designed specifically for the firm where they can meet divisional heads and mid-tier management and see how the company works with their own eyes. Such trips are ‘just too difficult at the moment to replicate,’ she said.

Adam Borgatti, senior vice president of corporate development and IR at Aecon, said ‘touch and feel’ events are likely to be in demand in a post-Covid world. 

‘For due diligence purposes, their fiduciary responsibilities and things like that, people are going to have to see operations, whether it’s mine tours or site visits or corporate offices,’ he explained. ‘Part of that is necessary for good governance. I think those will be some of the first things that open up [post-pandemic].’

Site visits might also be easier to bring back as they are more manageable events, Borgatti added. ‘You can target smaller groups, you can keep things outdoors where you have to and you can manage those a little easier than massive conferences, shoehorning everybody into a hotel,’ he said.

Panelists also discussed how companies will incorporate virtual outreach into their IR programs once physical meetings can return. 

‘If we end up in a position where you’ve got a hybrid model and you find that right balance, it could actually be compelling for both [investors and companies],’ said Borgatti.

‘I think the ability to separate your year into virtual and in-person [events] is one way to consider a hybrid. But while you’re having in-person meetings, even plugging people in on a bespoke basis might make sense.’

Dave Hughes, vice president of IR at Imperial Oil, agreed that the future of IR will be a hybrid model.

‘I do believe – and certainly with a lot of the investors I’ve talked to lately – they’re all anxious to get back to having some face-to-face discussions,’ he said. ‘But on the other hand, there’s the efficiency aspect of not traveling. So maybe that’s going to be more prevalent in overseas investor meetings, or at least when initiating contact with a target.’

Hughes noted that there will be a ‘transition period’ back to physical meetings. ‘I think we’re going to have a fairly gradual transition and ultimately land on that mix between face to face and virtual,’ he said. ‘We’ve proven that virtual technology works pretty well so I think it’ll stay around.’

To access recordings from the IR Magazine Forum – Canada 2020, click here