EQS has had an office in New York for close to a year now. The entry into the most important financial market in the world is a real milestone for our company and is the reason I spent the last nine months in the US getting to know the market even better. To this end, I had countless discussions with current customers, prospective customers and partners – and learned a great deal along the way:
- The tasks of the investor relations officer (IRO) in the US are very different from those in Continental Europe. In the US, the IRO is fully focused on contact with institutional investors. The IRO in Europe, on the other hand, has a much larger target group to provide information to. This is usually done on demand. Investor relations work is correspondingly professional by all appearances in Europe, comparable to a well-established shop. The IRO in the US, on the other hand, contacts its much smaller target group more directly and actively – comparable to a key account manager who actively sells to customers.
- In the US, many more departments are involved in financial communications: PR accepts the news, corporate communications are responsible for the website and annual report, and legal and compliance are also actively in touch with financial markets. In Europe, many issuers concentrate all this work centrally within investor relations. Logically, IR departments in Europe are often much larger than in the US.
- Differences are also evident in work culture, in my experience. In the US, for example, often a higher rate of personnel turnover leads to a stronger concern for job security, which can come at the expense of innovations, unfortunately.
- Furthermore, US IROs are in the business of analysis and the targeted communication with investors. The use of digital analytics and targeting tools is already much more established in the US, as a result. Europe is still a bit cautious. European companies show a higher degree of professionalization, especially in presentation (IR website, digital business report), which is confirmed by many awards.
Our team at NIRI 2017
What Can the Markets Learn From Each Other?
Investor targeting, in particular, is an area in which Europe must compete for international investors. We expect this to be one of the trending themes in the next years. Investor Relations in the US, on the other hand, has some catching up to do with regard to company presentation, where European investors have different expectations and standards. And growth markets like Asia or the Middle East? They should orient themselves to the respective strengths of the two markets – and get support from internationally experienced service providers.
And What did EQS Group Learn?
As a company, we made three important findings:
- As in all our markets, there are local characteristics in the US. This confirms our commitment to presences in the most important financial markets. This also allows us to cater to local requirements while still having the advantage of the international scale and solutions of a global service provider.
- Markets have different degrees of professionalization in financial markets communications. With our global experience, we can help each other learn from one another and reach a higher level of professionalism globally.
- In the US, in contrast to continental Europe, many more business units communicate with investors, requiring well-coordinated workflows which pose corresponding challenges. We are now developing solutions for communications and compliance managers in addition to our investor relations solutions in order to better support companies.
Now back in our headquarters in Munich, I look back on an exciting time in a fascinating city with a great US team. And with these "Lessons Learned”, I look forward to developing even stronger solutions for investor relations, communications and compliance with our colleagues all over the world.
Good to rely on a great team!