At a glance:
• MiFID II poses new challenges to investors and issuers.
• Small and mid caps have had to adopt new ways of investor targeting since the beginning of 2018.
• Comprehensive software solutions are indispensable for an efficient investor approach.


Investor Relations work has become considerably more complex, extensive and, in some cases, more expensive due to the EU Financial Market Guideline, MiFID II. IR managers are suddenly faced with new challenges.

It has never been easy for small and mid-caps to gain access to investors. Now, companies are faced with a scenario where they may disappear from the field of vision of major institutional investors altogether. Funds, asset managers, and other investment companies are obligated under the new directive to separate costs of services related to the trading of securities from the costs of other securities-related services. Other services include, above all, offers from banks and brokers in connection with equity research and corporate access. Roadshows or conferences must therefore be priced separately and can no longer be “hidden” as part of an overall package price.

While blue chips listed on major national and international indices are likely to remain the focus of the vast majority of investors and analysts, it has also become clear in the first few months after MiFID II took effect that institutional investors are less willing to pay for research and corporate access for less capitalized securities.

Stay on Investors’ Radar

As a result, smaller companies are now under considerable pressure. Their choice is either to pay for the services of brokers and research houses in reaching investors or to accomplish the extra work in-house. The first solution significantly strains already tight IR budgets; the second alternative pushes the corporate organization to its limits because, in the small-cap segment, IR managers are often lone wolves. There, Management often takes over IR activities.

Disappearing off larger investors’ radar can be very expensive for companies because their perception on capital markets being seen and understood is what gives them a correspondingly fair corporate valuation and their stock sufficient liquidity.

IR officers need to ensure that investors’ information needs are being met. Because contracted research has never had a stellar reputation, it’s more important than ever for companies to engage in direct contact with investors. After all, brokers’ customer lists have become significantly shorter with the introduction of MiFID II, diminishing their ability to initiate direct contact.

IR Ecosystem with Global Investor Data

Without the automation and digitization of processes, however, listed companies may struggle to meet the complex challenges efficiently. While some blue chips have had isolated applications for several years, small and mid-caps find themselves in uncharted territory. Existing comprehensive solutions, already standard for fulfilling reporting obligations and contact management in investor relations, must be mined and expanded accordingly. For example, by implementing processes that identify and analyze potential and existing investors, or those that increase communication and interaction with capital market participants and assist in monitoring IR activities.

By linking the platform with an investor database, the company’s own CRM system and, if available, the share register, IR managers have access to their own individual ecosystem, forming the basis for a targeted investor approach.

“Ecosystem” Quality Can Be Measured by 3 Key Factors:

  • Functionality / Usability: It is vital to implement a system that is simple to use but that also provides all relevant information when you are on the move. With rapid data analysis and interpretation, IR officers can also intelligently prepare for upcoming one-on-ones and conferences, as well as provide management with necessary summaries.
  • Being up-to-date: Quality of data (global, up to the minute) is paramount if analysis of existing investors, the search for new investors, or peer group analysis is to deliver qualitative results. Exceptional investor relations lie in a combination of high quality external data and the continuous maintenance of that data (including meeting protocols and notes, Share IDs).
  • Granularity: Automatically linking other IR activities (i.e. publishing of capital market reports, a contact management system) with investor maintenance care and search functions adds clear value for IR managers.

The goal of such an ecosystem should be to provide an overview of all relevant activities with the respective (potential) investor or analyst.

Building an ecosystem for IR managers that also supports investor targeting and maintains contacts is not a project that can be implemented overnight. The sooner small & mid-caps tackle this task, the more prepared they will be for the challenges that MiFID II poses.


For the first time, the new EQS COCKPIT will also support you in targeting investors. Stay updated about the game changer in Investor Relations.


This article was first published by Going Public Magazin.

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