Today’s stock ownership environment is complex, multi-layered and changing. The task of the Investor Relations Officer (IRO) – to know who owns company stock and whom they should communicate with – is increasingly challenging. The growth of exchange-traded funds (ETFs), passive investing, cross-border investing, and high-frequency trading (HFT), combined with greater volatility, have made it increasingly difficult to track and monitor ownership.
And with the proliferation of mutual funds and ETFs and the arrival of fund supermarkets, it’s more important than ever for the IRO to identify and track relevant decision-makers and the most important factors driving their investment decisions, e.g.:
- Manager’s investment mandate
- Growth or value-oriented
- Passive or active investor
- Fundamental profile
- Geographic or sector focus
In addition, the growth of cross-border investing has led to the globalization of stock registers. As companies seek to increase the level of foreign ownership even further, the issue of ownership identification across markets grows in importance. IROs are increasingly tracking shareholders across different markets with a myriad of different ownership disclosure requirements and regulations.
To meet these information challenges, IROs are beginning to think beyond traditional ownership identification when executing their IR program. Instead of relying on backward-looking reports that may tell an IRO what happened but not why, new tools and technologies can add a powerful resource to the IR team. Harnessing deep-market intelligence and powered by big data analytics, these cutting-edge tools marry identification, targeting, and analysis into an integrated, seamless whole.
The one constant in the capital markets is change. Increasing turnover and shrinking holding periods, a global investor base, the rising importance of passive investors, and the ever-present threat of activist investors create an environment where turning ownership data into IR intelligence is more important – and more complex – than ever. This challenge clearly requires much more than the ownership-tracking programs of the past.
For more information download Next Generation Ownership from Nasdaq Corporate Solutions. It outlines the capabilities an IR program needs to navigate today’s complex landscape and provide the IRO with strategic insight that executive teams expect.