Investor relations will always be a part of any business, especially in a large-scale company. Many are confused about IR, whether it is only for public companies or can also apply to private companies. Investor relations are mostly heard in public companies but with a role in private equity. However, the dynamics of investor relations in these two landscapes differ due to the differences in investor relationships and regulatory environments.
Professionals manage regulatory requirements and manage stakeholder communications with investor relations services.
Communicating with investors
The IR team works with the analysts who are requesting information, such as:
- financial statements and documentation
- company’s operations
Analysts guide the investors make decisions and share opinions about publicly traded companies with the investment communities. IR services encourage or prevent investors from buying company shares. They communicate with prospective and current investors to supply them with the following:
- updated statements
- answer questions
- promote the company
Liaising in the capital market
The IR teams act as the messenger for:
- company executives
- legal departments
- accounting teams
The team is updated about capital market activities and collects details about the issues that investors care about. Stable communication is maintained by the IR team with the other departments to ensure market activity aligns with the current company strategy. By doing this, it will be appealing to the new investors and keeping the satisfaction of the current shareholders.
Investor targeting
The IR team helps identify and prioritize potential investors to align with their investment objectives. Investor targeting is a sales strategy that encourages potential investors to invest in the company. It is also used to target the new investors or existing shareholders:
- Peer targeting. It targets investors who have owned a peer company.
- Reactive investor targeting. It analyzes the existing shareholders to focus resources and time on the most essential areas.
Investor targeting becomes more important for investor relations managers.
Investor engagement
Well-crafted IR plan enhances the investment appeal of the company, which makes the presence of the IR team effective. IR is the management of communication between the current investors and the company, which means it helps maintain their business relationship.
