Apresentação de Mark Sims, CEO da Capital Precision, no Seminário “Targeting: Como conhecer e gerenciar sua base de acionistas?”, realizado pelo IBRI em 18/08/2009 em SP.
As ferramentas de Targeting: Identificação dos acionistas, como classificá-los, o perfil ideal da base acionária e como gerenciá-la?
2. Capital Precision
We specialize in helping Companies (and their Advisory Banks) identify
who are the beneficial owners of their shares, who manages the
investment decisions and who to target as new investors
We are employed for both Investor Relations and Corporate Transaction
projects
We work for approx 200+ Blue Chip companies and 24 Banks
50+ years of collective experience
Awarded the contract to provide CMI Services to the London Stock
Exchange IR Solutions team, Nov 2005
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3. Targeting – A Complex Challenge
What will happen if you take management on a world
tour of investment centres and no-one buys the shares?
What shareholder structure are you trying to achieve?
How do you decide where to go?
How do you decide who to meet with?
What criteria did you use to evaluate your targets?
How do you know if it was successful?
4. Targeting is a marketing discipline
Know your customer
Who is the customer?
What is motivating them to buy (or sell)?
What do you need to do to keep them?
Where do you find more of the same?
How do you determine where they are and what will
motivate them to buy?
How do you measure whether your IR Programme is
working?
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5. Targeting is about prioritisation
There are over 40,000+ funds under management around
the world, you cannot meet them all
The challenge is to filter the 40,000 down to the investors
who are going to be most interested in your investment
story
6. Targeting is about achieving a balanced
shareholder base?
Stability or turnover? Passive or active?
Country/ Yield Broker
High Income Sector Focus Dealer
Low Hedge Fund Aggressive
Growth
Index
Growth
Value
Medium
GARP
7. Investor Targeting – The objectives
Maximize demand for the shares – This cannot be
achieved if it is left to the market to determine who will
be buying your shares
The challenge is to find investors whose investment
profile matches your future investment proposition
The better the Targeting, the better control there is over
the shareholder structure
8. Targeting – A Strategic Planning
discipline
In an ideal world a company would have a clear objective
of the types of shareholders they would like to have in the
future
The targeting process should be based upon anticipating
what is likely to happen and not based upon what has
happened
The targeting process must be measurable
9. Structuring the shareholder base
Is there a transaction anticipated?
Who will support the company in the transaction?
Who holds the voting power?
Do you want more passive or active investors?
Are you looking for liquidity or stability?
Are you looking to diversify the shareholder base?
Which shareholders are likely to rotate out and when?
Which current investors could buy more shares?
Who is not investing yet but could be?
Which investors could be activist?
Where are the strengths and weaknesses in the shareholder
base?
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10. The starting point for a Targeting Programme
Step 1 - The “stock take” – Where are you now?
Does your shareholder base reflect what you believe to be what you
represent to the market?
The first step is to have a clear understanding of who is already
holding your stock and why.
The second step is to identify which shareholders could rotate out of
the stock in the future
The third step is to determine the impact that this selling activity is
likely to have on liquidity and smaller investors
11. Investors Geographic Distribution
% Outstanding % Outstanding Standard Deviation
Client Value Peer Median High-Risk Typical
0% 10% 20% 30% 40% -3 -2 -1 0 1 2 3
38%
Domestic 2.1
28%
United 30%
-0.7
Kingdom
35%
18%
Rest of World -0.2
20%
North 9%
-1.3
America
13%
5%
Cont. Europe 0.3
4%
12. Investor Geographic Distribution
Although increased foreign investment is often very much
desired, dependence on any one region for support can
have significant impact on the turnover of your
shareholder base.
Geographic considerations
Perceived strength of your company’s country or region
Regional/Global stability concerns
Currency strength/weakness
Governmental and/or regulatory impact
13. Concentration of Shareholders -
% Outstanding Held by Top Investors
% Outstanding % Outstanding Standard Deviation
Client Value Peer Median High-Risk Typical
0% 20% 40% 60% 80% 100% -3 -2 -1 0 1 2 3
35%
Top 5 2.2
22%
45%
Top 10 0.6
39%
63%
Top 25 0.2
60%
85%
Top 50 0.2
80%
14. Concentration of Shareholders -
Regional Breakdown of % Outstanding
Held by Top 25
% Outstanding % Outstanding Standard Deviation
Client Value Peer Median High-Risk Typical
0% 5% 10% 15% 20% 25% 30% -3 -2 -1 0 1 2 3
27%
Domestic 2.6
15%
United 12%
-0.3
Kingdom
14%
7%
Rest of World -0.4
9%
North 14%
-1.4
America
19%
3%
Cont. Europe 0.0
3%
15. Domicile of Top 25 Holders
% Outstanding % Outstanding Standard Deviation
Client Value Peer Median High-Risk Typical
0% 20% 40% 60% 80% -3 -2 -1 0 1 2 3
60%
Domestic 1.8
35%
United 15%
-0.9
Kingdom
19%
5%
Rest of World -2.8
15%
North 15%
-1.3
America
22%
5%
Cont. Europe -2.1
9%
16. Concentration of Shareholders
Although it is often typical and potentially beneficial to have a few
“anchor” investors at the top of the shareholder register, a shareholder
base that is too concentrated can be cause for concern.
Pricing impact
Potential to trade in large blocks in the event of a bid or corporate action
Disproportionate affect on voting
Lower “real” float; liquidity
Higher likelihood of regional concentration (as per previous page)
17. Size of Investing Funds
% Outstanding % Outstanding Standard Deviation
Client Value Peer Median High-Risk Typical
0% 10% 20% 30% 40% 50% -3 -2 -1 0 1 2 3
43%
Mega 0.7
36%
32%
Large -1.0
42%
16%
Mid 0.0
16%
9%
Small -0.3
10%
18. Size of Investing Funds
Attracting funds of various sizes requires different modes of outreach
Larger fund managers
Have an abundance of internal resources and heavily rely on in-house research
Require direct one-on-one interaction with management
Manage a large portfolio of securities which ultimately ends up being closely tied to an index
benchmark portfolio
Will most probably hold many in your peer group already; will try to outperform through re-
weighting on a regular basis
Smaller fund managers
Less reliant on direct one-on-one management interaction; group meetings may be sufficient
Will rely on sell-side analysis due to their limited in-house research
Require accessible and good company information, presentations and disclosure
Lack the resources to manage a broad portfolio
Take large, opportunistic positions in a concentrated number of companies
Can buy into or sell out of a large position very quickly
19. Active vs. Passive Funds
% Outstanding % Outstanding Standard Deviation
Client Value Peer Median High-Risk Typical
0% 20% 40% 60% 80% 100% -3 -2 -1 0 1 2 3
71%
Active -0.5
82%
29%
Passive 2.4
18%
20. Active vs. Passive Funds
A balanced active vs. passive ratio of share owners can be important for the stability
of your share price
Positive impact of passive funds:
Can provide a long-term base of support and demand for your shares
Provide day-by-day liquidity
Negative impact of passive funds:
Supply and demand of your shares is reliant on regional or sector performance, not
specific company or management performance
Positive impact of Active Funds:
Tend to get closer to management and have more interest in the strategic planning and
the business development
Tend to be less share price sensitive and more milestone achievement focused
Will separate your shares from regional or sector related performance
Negative impact of active funds:
React more quickly and dramatically to negative company fundamental changes and
announcements
21. Special Situation Investor Distribution
% Outstanding % Outstanding Standard Deviation
Client Value Peer Median High-Risk Typical
0% 5% 10% 15% 20% 25% -3 -2 -1 0 1 2 3
21%
Hedge Fund 2.8
9%
3%
Activist 0.3
2%
3%
Prime Broker -1.3
5%
22. Special Situation Investor Distribution
Hedge funds
Are they in for the short term or long term?
Are they event driven, arbitrageurs, or looking for instability?
Activists
Are they active investors or activists?
Does the activist have support elsewhere in the shareholder base?
Prime Broker
Are they acting for securities lending, leveraged trade executions,
cash management?
Or are they acting for Hedge Funds?
24. Investor focus
It is important to be diversified among a broad spectrum of fund focuses
Who am I attracting? Or equally as important – who have I yet to attract?
Sector followers? Growth investors? Value players? Market cap specific
funds?
Which universe of peers are they comparing me against?
Which benchmarks are my shares being compared against?
Heavy weighting in any one focus area can yield swings in ownership and
share price if the specific focus comes under pressure, or the demand from,
or fund flows to, those types of funds change
25. Current Shareholder Entry Points
and Trading Exposure
Price Paid by New Entrants
40 Share Price Pricing Trend Number of Entrants 80
New Entrants
Share Price
70
30 60
50
20 40
30
10 20
10
0 0
P revious Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 C urrent
26. Current Shareholder Entry Points and
Trading Exposure
It is assumed that investors which have suffered large losses or
benefited from large gains are more likely to part with their shares.
The aim is to best estimate when the current shareholders entered
the stock so as to estimate the number of investors which would be
considered likely to be at risk.
The analysis should be viewed in the context of the general market
and sector performance and be read in conjunction with the active
versus passive analysis to give a picture of those individual investors
at risk.
27. The next steps
The primary goal of all Targeting Programmes is
to find investors who have both the appetite and
the capacity to buy your shares
It is important is to look at the whole market and
then filter down and prioritise to identify those
targets that will best fit with your future
objectives
28. How can targets be evaluated?
Step 1. Identify targets with the “Appetite” to buy
Monitor current buying and selling activity in the peer group
Monitor current capital flows across the sector
Monitor current capital flows across the region
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29. How can targets be evaluated?
Step 2. Identify Targets with the capacity to buy
Net asset value of the fund
% Fund exposure to the sector
% Fund exposure to the country
% Fund exposure to the rest of world
Top 10 holdings of each individual fund
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30. The “Weighting” objective
Most Targeting methodologies rely on a “Weighting
Principle”
This is achieved by identifying funds/institutions that are
currently overweight in the peers/sector/region but
underweight in you
The goal is to be at least fairly weighted
The objective is to identify funds/institutions that are
currently buying into the peers/sector/region
31. Is this objective being achieved?
No, for two fundamental reasons
A Weighting Analysis cannot easily be achieved by
using the usual data sources
Therefore most Targeting Programmes start from
an incorrect view of the market and can send you
in the wrong direction
32. “Public Data” sources – The problems
The lack of “up to date” information
The lack of complete information
“Public Data” sources do not identify who makes
the investment decisions for multi-managed and
outsourced funds
33. The lack of “up to date” information
The information that is made available in the
public domain consists of Regulatory Fund Filings,
Declarable Stake threshold breaches, “Technical
Announcements” or Published Fund/Institutional
Positions
Both the filing and published information is
historic by its nature
34. Weighting Analysis
using “Public Data” sources
Because there are mostly only Mutual Fund positions in
the public domain, any Weighting Analysis is immediately
flawed because it is based on only a partial and historical
picture of an Institutions true investment behaviour and
potential
If you are comparing bespoke researched shareholder
positions on you against public filings, you are not
comparing like with like
the peers may appear “underweight
35. The lack of complete information
Mutual Funds only represent (approx) 25% of investments
Pension Funds
Sovereign Wealth Funds
Active and Activist Funds
Insurance Funds
Hedge Funds
Prime Brokerage and Proprietary Desk positions
Wealth Management
Stock Lending
Retail
FEW IF ANY “FILE” OR APPEAR IN PUBLIC DATABASES
36. Can your broker help with Targeting?
Yes because they see current trading activity
The limitation for brokers is that they do not have a complete view of
which institutions are actively investing/trading
UBS – 9.0%
Goldman Sachs – 8.2%
Deutsche Bank – 8.1%
Citigroup – 7.9%
Credit Suisse – 7.3%
(Q4 2006 Leading Brokers, Top 5 ranked by value traded
Source - The Trade)
The potential investors outside their field of (trading) vision have to
be obtained from public information sources
37. End of Part 1
Targeting
Define your objectives
Know your customer
Prioritise the investment community
Evaluate your targets
38. Part 2 – Evaluation of alternative
sources of information
Publicly available data sources
The lack of “up to date” information
The lack of complete information
“Public Data” sources do not identify who makes
the investment decisions for multi-managed and
outsourced funds
39. The lack of
“up to date” information
US Mutual Funds - 13F Filings
4 snapshots in the year
45 days in which to file
“Window dressing” & “Bed and Breakfasting”
40. Mutual Fund public information
update frequency (Europe)
Country Frequency by year
Austria 2
Belgium 2
Denmark 2
Finland 2
France 2
Germany 2
Greece 2
Italy 2
Netherlands 2
Norway 2
Portugal 2
South Africa 2
Spain 4
Sweden 4
Switzerland 2
United Kingdom 2
41. Which Non-US companies
are filed on a 13F?
Run Date: 07/09/2007 ** List of Section 13F Securities **
294821 60 8 * ERICSSON L M TEL CO ADR B SEK 10
294821 90 8 ERICSSON L M TEL CO CALL
294821 95 8 ERICSSON L M TEL CO PUT
92857W 20 9 * VODAFONE GROUP PLC NEW SPONS ADR NEW
92857W 90 9 VODAFONE GROUP PLC NEW CALL
92857W 95 9 VODAFONE GROUP PLC NEW PUT
000937 10 2 * ABN AMRO HLDG NV SPONSORED ADR
000937 90 2 ABN AMRO HLDG NV CALL
000937 95 2 ABN AMRO HLDG NV PUT
42. The lack of complete information
Mutual Funds only represent (approx) 25% of investments
Pension Funds
Sovereign Wealth Funds
Active and Activist Funds
Insurance Funds
Hedge Funds
Prime Brokerage and Proprietary Desk positions
Wealth Management
Stock Lending
Retail
FEW IF ANY “FILE” OR APPEAR IN PUBLIC DATABASES
43. The Public Data view
100% 100%
94% 92%
90% Current
80% Previous
70%
60%
50%
40%
31% 32%
30%
20%
10%
0%
Total Market Cap Bespoke Public
Outstanding
When comparing shareholder visibility across the sample
set of 20 companies, bespoke data provided 94% coverage
while public only provided 31%.
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44. Bespoke vs. Public Top 3 SA clients
100.00%
90.00%
80.00%
70.00%
60.00%
50.00% B es poke
40.00% P ublic
30.00%
20.00%
10.00%
0.00%
AB S A G old F ields Nas pers A verage
45. Bespoke vs Public Data
SA Case Study | Buyers
350
293 Bespoke
300
Public
250
USD (millions)
200
150 130 126 119
91 101
100 83
50 31 24
0
-2
-50
NWQ Franklin Capital Barclays Global T. Rowe Price
Investment Advisers, Inc. International, Investors NA Associates, Inc.
Management Inc. (California)
Co. LLC
Bespoke revealed the above named investors as the five largest
buyers into South Africa and in every case public information has
failed to pick up the true magnitude of the share acquisition by
these investors.
45
46. Bespoke vs. Public
SA case study clients - Sellers
10
2
0
-10
-11
USD (millions)
-20
-30
-40 -33
-37
-50 -47
-50 -48 Bespoke
-60
-59 Public
-70
D. E. Shaw & Lazard Asset Emerging Batterymarch Federated
Co., Inc. Management Markets Financial Investment
LLC Investors Corp. Management, Management
Inc. Co.
Bespoke data reveals the above named investors as the five largest sellers of
South African stocks while public data is yet to be updated with their latest
holdings
47. Bespoke vs Public Data
– SA Case Study | Holders
2.0
1.8 1.8 Bespoke
1.8
Public
1.6
1.4
1.2 1.2
USD (billions)
1.2
1.0
1.0 0.8 0.8
0.8 0.7
0.6 0.5
0.4
0.2
0.0
Paulson & Co., Tradewinds Blackrock Dodge & Cox, NWQ
Inc. Global Investment Inc. Investment
Investors LLC Management Management
(UK) Ltd. Co. LLC
48. Finally, How do you measure whether
you have targeted the right investors?
Monitor subsequent trading activity
Determine investor perceptions
A constantly evolving process