Future SmallCap IR Challenges And Opportunities
Recently, the IRMagazine.com staff shared “How best to tackle IR for small caps.”
The article, produced by ELITE Connect and originally published on the ELITE Connect platform, included a Q&A with small cap investor relations experts. These experts shared what they see as future IR challenges and/or opportunities for small caps.
Question: What do you see as future IR challenges and/or opportunities for small caps?
James Houston (managing director at Jones and Palmer): “There are obvious challenges in the future, and many small-cap companies will continue to struggle with less recognition and media attention. They will naturally face lower liquidity and greater volatility and, with significantly smaller teams, will have fewer resources to work with.
It’s not all negative, however. With a smaller team of corporate stakeholders and a more accessible senior management team it is perhaps easier to maintain a more consistent investor message. It can also provide any external agency with an opportunity to be more effective at telling the corporate story in an engaging manner.”
Steph Osborn (research analyst at Invicomm): “The challenges are pretty steep, but they also create some great opportunities for small caps. Instigating IR activities internally and with external specialist partners will help to overcome the visibility trap created by Mifid II and get noticed by the buy side and investors.
It could also improve and transform the way these firms communicate with all stakeholders. Partnering with experts in communications and IR activities will become increasingly attractive to small caps. There is much to be communicated about these firms. Although inherently riskier, small caps have delivered a strong financial return. Over the last five years the FTSE Small Cap Index delivered a 13.2 percent return, while the FTSE 100 delivered just 7.7 percent.”
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