When you are thinking about what to do with your career, it is something worth thinking outside the box. My series of posts on alternative finance careers will hopefully give you some ideas which you haven’t thought of before. You will only be able to land some roles with experience but others are ones that you can land straight out of college or university.
Today I will be covering the Investor Relations role – what they are, what they do and how you can get in and why you may want to think about it as a career.
What is Investor Relations?
Have you ever wondered how the CEOs of listed companies (especially large multinationals) are able to both run their companies well and also deal with the investment community? Well they wouldn’t be able to do this without their Investor Relations teams.
Investor Relations teams are the face of the company to the investment community (both large institutions and individual investors). They exist to assist investors better understand the company and to ensure that there is a balance between the amount of time that executives spend actually running the company and dealing with the shareholders in the company.
If you look at any announcement by a large public listed company you will notice that there is normally a contact number at the end if you have any questions about that announcement – that is the Investor Relations person (or team). If an investor (or a prospective investor) has a question about the company they are invested in they will typically deal with Investor Relations. Try it sometime – if you invest in stocks and a company you own releases an announcement you wish you knew more about…try calling or emailing the company.
What do Investor Relations Teams Do?
The Investor Relations role is all about:
- Understanding the company they are working for
- Understanding the strategy and financials that the company has
- Understanding what the senior management team wants to convey to investors
- Understanding the issues that investors are interested in and are likely to ask about
- Communicating the answers to investors queries while at the same time understanding what can and cannot be disclosed
Your ‘clients’ are both internal and external. Internally you will be preparing your CEO and the senior management team for meetings, briefing them on what Investors are likely to be asking them and what they should be messaging to investors. You will also have control over Investor Presentations and press releases ensuring that they are accurate and anticipating any questions that may arise because of them.
Externally you will be fielding calls from investors, and following up on information they have requested or questions that you could not answer without more information. You will also be meeting with investors both with and without the management team and answering any questions they may have.
Why you may want to think about Investor Relations as a career
The investor relations role is a fascinating role that is often under-rated by those interested in finance and those interested in business generally. Why would you want to spend your time talking to Investors? Actually it is so much more than that…
You are almost like an Equities Research analyst
The role is almost like that of a research analyst. Not only do you need to be on top of absolutely everything your own company is doing and all of your own financials, strategy, strengths and weaknesses you need to also understand the same of all of your companies competitors.
Investors will always compare companies against their competitors and will ask you about why your company is better or why they are doing something and you are not…and you need to have an answer for it.
You also need to have an understanding of finance and modelling so that you understand why certain things concern investors or analysts.
The access you get to management is unparalleled
How many jobs can you think of where you will get access to the senior management team at a very early level? Most jobs have so many levels of hierarchy that you will never get access to the senior management teams. Investor relations teams tend to be quite small and their staff have constant and intimate access to the senior management teams.
You are exposed to sophisticated investors at a very early stage
There are very few jobs which give you exposure to a range of sophisticated investors…and there are fewer still where those investors will remember who you are. However investors will almost always remember their Investor Relations contact.
The Investor Relations role is an incredible one to build contacts in the finance community and if you are competent it definitely gets remembered.
You are tested ‘under fire’
If you work in Investor Relations, you often go into meetings with your CEO and CFO. Investors will be addressing their questions to the senior management team and for the most part you will have nothing to do. However this does not mean that you can relax and not pay attention. If your CEO is struggling to answer a question about the financials or your CFO doesn’t know what the company line is about a certain strategy it is your job to jump in, answer the question and make sure that your management team don’t look like they don’t know the answer.
You come under pressure at the hardest moments and have to be able to answer questions that the people running the company are struggling with.
How do you get into Investor Relations?
Have I sold you on the Investor Relations role yet? Are you wondering how to get the job? Well there is good news and bad news.
If I start with the bad news – Investor relations teams are really small. Some company don’t even bother with them and it is only the really big companies which have teams of any size. Note that this is also a good thing because it gives you so much more exposure early…but it does make it hard to get in.
The good news is that people, especially people interested in finance don’t often think about the role. It is a role that is perfect for someone who is both interested in finance and in actually working for a ‘real’ business but it gets less attention than it should.
So how do you get in? If you have finance experience (especially Investment Banking experience) it actually may be easier than you think. The jobs are often advertised both through recruiters and through regular channels and corporates will often jump at the chance to get someone who has financial experience. Getting the job is all about showing that you understand the industry you are applying for and that you have excellent communications skills.
If you are coming straight out of college or university it is still possible to land one of these roles…but it is much harder. You need to apply to the huge companies which have large teams and are able to train you up and give you the knowledge and experience you need. Try applying for companies in industries which are not ‘sexy’. All industries (even the boring ones) need Investor Relations staff so you can often get in by being less picky about the industry you start out in…be careful about getting trapped in this industry though.
Have you thought about Investor Relations as a potential career? What stopped you? Or have you done it and hated it? I’d love to hear about it below.
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