Our Blog: The Podium

What Does the Buy Side Want From IR?

By Polly Pearson, Senior Vice President

An interview with Eric Clark, Portfolio Manager: Rational Dynamic Brands Fund (HSUTX), a global consumer and mega-trends fund.

One of my favorite “tools in the IR toolbox” is the act of “asking the target audience.” In IR, the investors are the primary audience. In this post, I asked Eric Clark, a fund manager, for his candid thoughts on how investor relations professionals could best make a connection between their companies and their primary target audience. 

This, in my book, spells opportunity. 

Q: How does a sub $2B market cap company get attention from the buy side… especially when the stock is out of favor? 

A: Small-cap managers are storytellers so they like story stocks. Telling the story to as many people as you can is wise, assuming the story is worth telling. If it is not, management needs to focus on the business and make it a better story to tell. The more content that’s created and out there, the more the story can reach investors. Creating content about their business and their story, doing interviews, and participating in podcasts are avenues that can be helpful.Picture1-2

Additionally, IROs should target asset managers for mutual funds in small-cap value, core, or growth. Identify the funds that invest in that space and call the PM/analysts. IROs also can leverage buy side research and contact the analysts covering that space. 

Fund managers are mostly style factor people – growth, value, and so on -- so even if the stock is out of favor, IR should sprinkle seeds with those fund managers that could own the stock in the future.

Q: What do you see as best practices when reaching out to the buy side directly?

A: Remove the friction as much as possible. The more you can provide versus what an analyst would need to research, the better. The more you can spell everything out for them, the more they will gravitate to you, versus making them do a lot of work on your company and on your peers. For example, you should understand that the buy side wants metrics and provide them. 

When reaching out via email, make the message feel personal, have relevance to what the market is doing right now, and what the market could be interested in. We like short and sweet bullets. Put yourself in our shoes.

A “strategic vision” webcast, analyst day, or investor day is also good starting point. By doing one annually you can hold yourself accountable. Also, consider a provocative annual letter and shareholder letter each quarter if there is something real to say. 

Q: What is your point of view on strong IR communications?  What does good look like and why?

A: The buy side appreciates companies that lay out the market opportunity, show market share, show strategies to achieve goals, highlight the progress along the way, and outline future opportunities. If you set a long-term vision that’s realistic and management has credibility, investors are often willing to take the ride with you.

Notably, companies admitting they need improvement, and providing metrics to show that they are improving is where the value lives.

Q: How would you improve quarterly earnings reporting?

A: Earnings reports can be maddening to fund managers. There often is no consistency. Certain data is available from some periods, and not other periods. Fund managers believe companies are accentuating the positive and eliminating the negative. The buy side appreciates consistent metrics, the long-term story, the vision, and the roadmap.

Picture4In my opinion, the “analyst expectations” game is bunk. The quicker a company can de-anchor from 90 days the better. Think about Amazon. They said, “Do not judge us on 90 days. That’s not how real businesses are built. They are built on long-term vision and execution every day. Companies that manage to quarterly expectations become beholden to each 90-day period. I believe a best practice is to provide 3-5 year goals and metrics to measure progress.

Q: What is your view on IR websites? How important are they? What do you use them for?  

A: DATA. Large cap fund managers in particular turn to the website for information first. I go to IR websites a lot. I look at ‘Why Invest,’ quarterly reports, and one-page summaries of the important data. 

Make my life easier by putting information on the website. The more friction you remove the more I will act. There is only so much time in the day. If companies make me research, I may go elsewhere. The IR website is an opportunity to tell your story and be proactive.


I love a site that shows me a video that features the management team. Once a year, give me an update on the market. Fifteen minutes or less. Share what the company is thinking about. That gives me an idea of management credibility. I look at it and can see obvious ways for the company to grow. 

Key Takes & Tips:

  • Small-cap managers are story tellers so they like story stocks.
  • Proactively lay out your company’s story in the way investors look at companies: opportunity, vision, market share, strategy, goals, progress, future opportunities. Include metrics.
  • Seek storytelling opportunities to capture investors’ attention, such as investor days, “strategic vision” webcasts, and video interviews with the CEO.
  • Have a data-rich website with highly valued “Why Invest” and the “Quarterly Earnings” sections.
  • Have a one-page summary on all the important data, including key metrics.
  • When reaching out to the buyside, customize the communication to the specific fund manager’s area of focus. Include metrics, be relevant, and use short bullets.  Timely information will capture more attention. 

Eric Clark  is a portfolio manager managing the Rational Dynamic Brands fund (HSUTX), a global consumer and mega-trends fund.  Eric is a thought leader in his field and uses modern tools to engage his clients and potential investors such as a podcast, a blog, and regular newsletter updates. Eric believes there are unaddressed market-value-building opportunities for companies by elevating their IR game. 

Sharon Merrill provides investor relations strategic advisory services for IROs and the C-suite to drive best-in-class IR programs.  

Sharon Merrill Associates, Buy-Side, Financial Communication, Investor Relations, IR Trends

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