Investor relations

Investor relations (IR) refers to investor-oriented measures that are strategically designed, communicative, that create trust and serve to preserve and enhance the value of an investment vehicle (e.g. a fund or corporation) in the long term. Investor relations is a combination of the disciplines of marketing, finance and corporate communications. The goal of IR is to continuously give current and potential investors a realistic overview of the current and future development of the investment vehicle. This causes confidence in the enterprise to grow. Increased trust reduces the risk premium investors demand for investments. This leads to a reduction in the weighted average cost of capital for the company. This enables long-term investor loyalty and, for stock corporations, the optimisation of the share price and an increase in shareholder value.1
Various instruments are used to achieve these goals. These include a deliberate dividend and issuing policy and the comprehensive provision of information through annual reports, interim reports and individual measures such as sending advice and information letters to investors.2 This information is usually also provided on companies’ own IR pages online. Moreover, strategic IR instruments include corporate presentations to professional investors (roadshows) and individual meetings with relevant investor groups. For private investors, the annual general meeting is a central personal communications tool for the management of a stock corporation.3 For property funds, regular investor committee meetings are normally held for institutional investors.
The primary target group for investor relations is the current and potential investors in an investment vehicle (private and institutional investors). However, the entire “financial community” is addressed. This includes financial journalists, rating agencies, analysts, regulators, financiers, financial advisors, stock exchanges, etc. These intermediaries, opinion formers and stakeholders have a significant influence on investor decisions.4
For property companies and funds, investor relations instruments are a major criterion for success. The capital requirements of property companies are usually high due to the large investment volumes. In addition, German property companies are still often relatively unknown to private investors. On the one hand this is due to the low market capitalisation of some of these companies (low visibility). On the other hand, private investors often cannot identify with the business models of these property companies, resulting in more restrictive investment in property stocks.
  • 1 Vgl. Piwinger, Manfred (2005): IR als Kommunikationsdisziplin. In: Kirchoff, Klaus Rainer; Piwinger, Manfred: Praxishandbuch Investor Relations. Das Standardwerk der Finanzkommunikation, 2. Aufl. Wiesbaden, S. 16-17.
  • 2 Vgl. Schneck, Ottmar (2007): Lexikon der Betriebswirtschaft, 7. Aufl. München, S. 474-475.
  • 3 Vgl. Piwinger, Manfred (2005): Instrumente und Strategien der Inszenierung. In: Kirchoff, Klaus Rainer; Piwinger, Manfred: Praxishandbuch Investor Relations. Das Standardwerk der Finanzkommunikation, 2. Aufl. Wiesbaden, S. 19-22.
  • 4 Vgl. Allgäuer, Jörg E.; Larisch, Matthias (2011): Public Relations von Finanzorganisationen. Ein Praxishandbuch für die externe und interne Kommunikation, Wiesbaden, S. 243.
Swiss Life Asset Managers
: 7/13/2020