Speed dating for investors

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The path of true love seldom runs smoothly, but this was a divide that even hardened speed daters would have found difficult to bridge.

Anastasia Rotheroe, investment officer of the $38bn United Nations Joint Staff Pension Fund, found herself seated across the table from Andrew Mann, investor relations manager at BAE Systems.

The UN fund eschews investments in armaments companies. BAE is the UK’s biggest arms manufacturer. This would be a hard sell.

“We couldn’t pull the trigger on that one,” said Rotheroe, sticking admirably to the military theme.

The unfortunate pairing was a rare glitch at the inaugural speed investing event hosted in London by Dresdner Kleinwort. In a brazen rip-off of the speed dating concept, representatives of 24 pension funds, asset managers and hedge funds each spent 20 minutes eyeing up the charms of a dozen of the 24 companies present.

While relationships were not consummated on the spot, most of the would-be investors present seemed to find plenty to excite their interest. Deeper engagement was likely once they had checked out the all-important figures of course.

Even Rotheroe was upbeat about the 20 minutes she spent with Mann. “It was good just to get an idea of what they were doing. It’s good for information; you can get an idea of trends and developments.” Rotheroe, who flew in from New York for the event, found some of her other 11 speed dates more productive still.

“There were at least five companies I would like to have follow-up meetings with. [For] some of them we might need a site visit, but it was a nice starting point. I found it very productive.”

Nick Seaward, managing director of Dresdner’s equities liaison team and organiser of the speed investing event, reported positive feedback from a number of other buy-side attendees, “Some of the companies they thought they would have no interest in are among those that they found interesting and want to take on further. For the companies themselves that is a godsend.”

Seaward freely admits the debt to speed dating. Indeed, his interests in all things rapid were prompted by the experiences of Albert Edwards, global strategist at Dresdner, who famously wrote of his speed dating exploits in a strategy note.

The concept was simple. While investor presentations can last for two hours or more, Dresdner believes most would-be investors decide whether or not they are interested in the first 20 minutes. “The gist of what a company needs to say can be said in 20 minutes,” Seaward concludes.

The set-up also benefits the companies, he says. “Quite often, when companies do a roadshow for investor relations purposes they tend to spend a lot of time visiting their existing shareholder base, so they don’t get much time to meet potential new investors.”

Senior executives can also find it frustrating to have to outline their company from A-Z to institutional investors who have not swotted up beforehand.

The speed investing concept is designed to give putative investors the basics, allowing them to whittle down the list of companies with which they would like to arrange more detailed meetings. As with speed dating, the would-be investors fill out a form afterwards listing who they would like to meet again.

Although there were a few chief executives and finance directors, most of the companies, which included Diageo, BT Group and BHP Billiton, sent their head of investor relations or communications.

“Senior investor relations directors are usually privy to most of the board’s thinking and they can answer most questions,” says Seaward. “You don’t want to waste the finance director’s time in trying to educate potential new shareholders in how the business works.”

The investors ranged from asset management houses, such as Merrill Lynch, JPMorgan and Old Mutual, to pension funds and hedge funds, with the latter group in particular said to prefer the freedom of testing out their blue sky scenarios in one-on-one meetings, rather than revealing their stratagems in the more traditional group lunch format.

Each buy-side house met 12 domestically focused UK companies or 12 pan-European groups, depending on their preference.

Most would-be investors found companies they would be interested in getting to know better. “This gives you a chance to whet your appetite and I would definitely do it again,” says John Hayes, UK fund manager of Reed Elsevier Pension Investment Management.

“There were a couple of companies that have changed quite a lot and are more interesting [than when we last saw them], and I will go away and research them.

“These days, the investor relations people are much better informed. It would be nice to meet all the finance directors and chief executives, but that is an unrealistic hope.”

The response from the company representatives was also positive, although the line from one that “it’s a good way of meeting people that you would not be prepared to spend an entire hour with”, suggested that not every match was made in heaven.

But overall, Dresdner felt its first speed dating session went so well it is planning to make it a regular date, having already organised follow-up events in London and New York in September.

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