Thornburg IM: What matters in Investor Relations
A few perspectives from Thornburg Investment Management
I was recently introduced to Mahmut Mustafa Arikan from Thornburg Investment Management to discuss an investment case of a Turkish company. His firm manages $45bn in assets, and Mustafa is part of the team overseeing various global and emerging market strategies, frequently meeting with the companies they invest in.
During our conversation, Mustafa shared a few perhaps subtle specifics on the importance of effective investor relations practices in his process, especially in emerging markets.
While many of these may be obvious to seasoned IR teams, they can nevertheless still serve as a timely reminder for the rest of us!
Timeliness is Key: “The 2 Day Rule”
One of the primary points Mustafa emphasized was the importance of timely communication. He recounted an incident with Nestlé, where there were recent speculations about their milk formula. Upon reaching out to Nestlé's IR team, they received a prompt response within five minutes. This swift communication helped clarify the situation quickly. As he noted, "If I have a question, can I get an answer quickly? Two days is a good proxy."
Face-to-face interactions and the ‘comfort factor’
Building strong personal relationships between investors and IR teams was another critical aspect Mustafa feels strongly about. Despite recent advancements in video technology, Mustafa highlighted the irreplaceable value of face-to-face interactions, especially in a world where AI can access an increasing amount of information and perform basic analyses of companies’ investment cases. Conferences and personal meetings help build trust and provide deeper insights beyond what is available in the public domain. Those relationships add comfort to Mustafa, especially during a crisis.
Willingness to help, not sell!
Transparency and a willingness to provide detailed information (without crossing legal boundaries) are essential for effective IR teams. Resources such as quality investor presentations, annual reports, and earnings call transcripts play a vital role, whereas the lack of such resources on the IR website can be a major impediment in the investment process.
Mustafa shared his preference for IR teams that are enthusiastic and passionate about their company without being “excessive.” Ideally, he would like to have a relationship with both management and IR, but the ‘what’ and the quality of the relationship are more important than ‘who’ within the company is providing this. He pointed to many examples of companies where ‘IR-only’ teams conduct roadshows and meetings, which are perfectly sufficient.
Final Thoughts
Solid investor relations practices provide this advantage because they help investors like Mustafa get comfortable with the investment case and allow him to articulate it better internally. Timely responses, long-lasting personal relationships, quality dialogue, and high-quality supplementary materials are all fundamental components of this puzzle.