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Fine Tune Your Investor Targeting to Attract the Right Shareholders

Fine Tune Your Investor Targeting to Attract the Right Shareholders

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Executive summary: Explore the steps needed to create an effective investor targeting programme that finds the perfect investors to plug the gaps in your shareholder base. In addition, learn how regulations affect targeting and how IR tools will further fine-tune the targeting process.

Investor targeting helps you plug investor gaps, create both issuer and shareholder value, and raise your corporate profile by identifying and engaging potential new investors. In addition, you can use targeting to re-engage current investors and solidify your relationship with them.

Today, this task is much more precise and data-led than ever before, with more than 50% of issuers enhancing their targeting efforts through the use of online investor relations tools. 

Table of content

Why Is Investor Targeting Important?
What Does Investor Targeting Entail?
How To Get Investor Targeting Right
Investor Targeting Outside Of Roadshows
Investor Targeting Under MiFID II
Investor Targeting Tools
Optimise Your Listing For The Right Investors
References and Further Reading

Why Is Investor Targeting Important? 

At the basic level, investor targeting helps you find new sources of capital by engaging the sorts of investors who provide a perfect fit with your company. As IR Society’s Best Practice Guidelines suggest, 

“The IR team should have a clear understanding of the company’s investment proposition and the type of investors who might find this attractive. Ensure you align your company’s appeal with investor needs: 1) investment style, 2) country or region mandate, 3) cap-size requirements, 4) corporate governance guidelines and 5) sector or industry focus.”

If you want to discover new long-term investors, you have to identify and hone in on those potential shareholders who are most likely to want to be in for the long haul with that particular issuer.

Once you identify the type of investor who is most likely to provide that for your business, you can work on a strategy for persuading them to invest with you, and, then, involve them in your ongoing shareholder engagement process

What Does Investor Targeting Entail?

Investor targeting entails building a picture of the types of investors that you are missing from your portfolio as well as working out which investors are likely to be tempted by your offering. This helps you plan who to seek out when it comes to uncovering and utilising new pools of capital. If you can also pinpoint why ownership changes within your shareholder base, you can develop a strategy to engage and retain investors, based on the reasons for selling that you uncover in your research. 

To connect with your targets, you can organise investor roadshows, investor day and other live or online events. You can also contact them directly, particularly if they are the type of investor who doesn’t normally attend in-person events. 

How To Get Investor Targeting Right

Step 1: Shareholder analysis

The very first task when carrying out investor targeting is to analyse your current shareholder base. Go through your data and answer a series of questions:


What it tells you

Who is currently investing?

Work out which types of investors, institutional or retail, are already with you and what you are doing to attract the buy-side. 

Why are they currently investing?

This could help you improve your equity story and fine-tune your long-term outlook. You can also leverage these insights with new investors.

Which types of investors sell your shares and why might that be?

Any change of ownership patterns can tell you a lot about how investors view the issuer. 

Who invests in your peer group?

By looking at the portfolio of your rivals in the same space, you can target investors who might also be interested in what you provide. You might even find issuers in other sectors who work within a similar structure and whose investors could find you a good fit, too. 

This tells you who you need to target and how to approach them to appeal to them and their way of working.

Step 2: Create a plan

Create a plan and give yourself goals to meet. At the beginning of the year, plot out all the potential investors that you think may want to work with you. Break them down into regions and ensure you visit those areas for investment events and roadshows over the next 12 months. Work out where you want to be in terms of investment each quarter and by the end of the year. 

Step 3: Reap the quick wins

Start off by targeting the most straightforward potential investors. This includes current investors with an underweight portfolio in the issuer. They have already been sold on the business and you have a relationship with them. Engage them and encourage them to buy more stock. 

The other investors in this category are the shareholders of your peers. They know the industry, understand the challenges and the metrics used to pinpoint success. In addition, as part of their competitor research, they should know a lot about your business. This means you don’t have to start from scratch when introducing them to the space or the issuer. 

Step 4: Customise your outreach

To cast the net wider, you need to consider what will make you an attractive proposition to investors who are new to the issuer. Look at your key metrics and find a match with fund profiles that chime with yours. It could be that an investor looks for margin expansion, growth rates or something else in their investments. 

If you can wow them with your stats, then that is a great way to get your foot in the door. Similarly, if you have some impressive pedigrees within your organisation, leverage them. Some investors can be impressed with executives who have experience within blue-chip companies such as Google, Goldman Sachs, IBM and similar. 

Step 5: Engage portfolio managers

You can also play up to portfolio managers’ favoured themes in order to have them notice you. Generalist investors might be impressed by certain business strategies that match yours or by hot button topics that might relate to your sector. For example, developing AI, battling climate change or something similar. If you can capture the investor’s attention with broad strokes, it helps you retain their attention as you then move onto the finer points. 

Step 6: Employ investor targeting tools

Utilise the data available with investor targeting tools. These can sift through vast expanses of information to find the best matches for your business.  

Step 7: Analyse and monitor your shareholder base

To fine-tune your investor targeting strategy, you need to understand what types of investors you’ve attracted so far. So, be sure to get as much data as possible on your existing shareholders and the funds they manage. What is their investment style? What are their hedging strategies? How likely are they to churn?

Keep in mind that this is not a one-time activity. Rather, it is an ongoing process that should represent a crucial part of your overall investor targeting efforts. So, once you’ve done the initial shareholder analysis, continue to monitor your shareholder list and compare it with your peer holdings. Check that your equity story still fits the business you have become and adjust it as needed to ensure that investors know what they are getting.

Step 8: Segment your list

According to a survey by Rivel Research, many fund managers are unenthusiastic about meeting issuers who are targeting them for investment. This is down to a number of reasons that come down to a lack of research on behalf of the issuer. These include not being a good fit for their investment style, being too big or small by market cap, in a sector in which they do not invest and more. 

To increase your chances of success and find the most likely matches, it’s best to segment your list of target investors. Similar to shareholder analysis, research your potential investors’ public disclosures and try to learn as much as you can about them. Below are some of the questions you may want to ask yourself:

  • What is their investment style?
  • What type of returns are they focused on?, e.g. cash dividends, stock repurchases, debt reduction, etc.
  • What type of funds do they manage?
  • Are they focused on short-term growth, long-term value or another objective in-between?
  • What are their buying and selling trends?
  • How is their portfolio performing? (both individually and compared to their index benchmark)
  • What is their typical length of holding?

If you are new to investor targeting, we recommend reading the articles in the ‘References and Further Reading’ section for more information on the terms used. 

Step 9: Build a relationship

Understand that it takes time to persuade a potential investor. Only 12% of institutional investors said they would buy stock after one meeting, the Rivel survey found. In fact, the average was three meetings, and 52% said they wouldn’t invest until they had met the management of the issuer, even if the IRO answered all their questions.  

Investor Targeting Outside Of Roadshows

Often there can be direct approaches from you or from the buy-side to discuss investments, apart from the usual roadshows. However, the issuer needs to be absolutely certain that this one fund is worth talking to outside of roadshows, especially when assigning executives to use their valuable time to meet with them. 

The Investor Relations Officer should rank these potential investors by taking into account the executive with whom they would like to meet, their investment style, investment profile, and whether they have invested with a peer. From these details, you can gain an idea of how valuable they might be and whether the relationship is worth pursuing. 

Investor Targeting Under MiFID II

MiFID II, the regulatory framework introduced by the EU in January 2018, has had an effect on investor targeting. It forces investors to separate the money they spend on researching issuers and for corporate access to companies from trading commissions. This has led to investors cutting back on brokers’ services and roadshow attendance. In turn, the knock-on effect is that issuers report they are struggling to get in front of premium leads. 

Although the rules only officially cover the EU, many investors apply them across the board for all of their dealings, making it a worldwide issue. This is leading to issuers bypassing roadshows and embracing technology to connect with the right investors.

Investor Targeting Tools

The role of investor targeting tools such as Euronext’s IR.Manager is to provide a route to meeting new ideal investors. 

These tools are often fueled by Big Data and analytics to provide a tailored solution. With the help of such databases, you can easily narrow down your search, further analyse the suggestions at hand and streamline your targeting strategy. 

Another technological factor is artificial intelligence which is becoming popular with IROs. It can analyse previous investor behaviour to predict future decisions and give you an idea of how likely an investment in your company is and when they would be likely to buy. 

Optimise Your Listing For The Right Investors

The Post-Listing Advisory service from Euronext enables you to position your organisation to best take advantage of the capital markets. Our data-led approach helps you to:

  • Analyse your current shareholder base 
  • Find out who invests in your peers
  • Understand how prospective investors view your offering
  • Boost your equity story
  • Implement your investor relations strategy
  • Engage investors for the long-term

Request a free demonstration >>



Investor targeting is ever more important and ever more data-driven. Whereas once there was little you could do outside of roadshows, now there is so much more to the process. Taking a thoughtful approach to establishing a solid investor targeting programme at the heart of the business will help you meet the right kind of investors for you and your company and expand your shareholder base. 

References and Further Reading 


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