Buyside Perspectives on IR and the Future of Active Management

For its May program, NIRI Boston hosted three leading asset managers to lift the curtain on buy-side viewpoints of recent trends affecting IROs and how companies can foster better lines of communication with investors.

Moderator and NIRI Boston Board Member, Jeff Bray, led the panel of experts including: Jeremy Javidi, Senior Portfolio Manager at Columbia Threadneedle; Caroline Tall, Equity Research Analyst at Fidelity Management & Research; and Robert Bradley Sr., Chairman and Principal of Bradley, Foster & Sargent. Mr. Bray began the panel by asking a question on the minds of many IROs – how do investors decide whether to dial-in to a quarterly earnings call?

Mr. Bradley remarked that while he finds management’s tone during Q&A to be a critical element to understanding quarterly results, time constraints only permit him to listen to approximately 20 percent of his followed companies’ earnings calls in real-time, and reads the remaining transcripts in the weeks following earnings season. Ms. Tall remarked that given the sheer number of positions Fidelity holds, they prioritize calls where they may be a top holder and try to follow-up with questions for management teams shortly after the call.

The conversation spanned to other timely topics, most notably the continuing decline of the traditional sell-side model. Ms. Tall urged IROs to cultivate relationships with their best analysts who may not be at bulge-bracket banks, but provide thoughtful, accurate and useful analysis and clearly articulate stories to the investment community. Tall also reminded the audience to be firm with analysts who have overly aggressive bear or bull theses that may inaccurately influence potential long-term investors. In contrast, Mr. Javidi stated that while he conducts his own research, he appreciates the corporate access function offered by many research firms and noted that he meets with more than 500 companies per year. He also commented that if an analyst is only publishing research following a quarterly earnings call, or only appears to be covering because of existing or potential banking relationships, an IRO should think twice about continuing to support the relationship.

Mr. Bray continued with a discussion of the rise of passively-managed funds and the implications for both active managers, as well as investor relations professionals. Mr. Bradley does not believe passive investing will ever entirely replace active management, noting that markets frequently behave irrationally, which creates opportunity. Mr. Javidi’s investment approach considers several sources prior to making a buy, hold or sell decision, but he shared the insight that he has recently seen passive funds tracking keywords from company materials to drive trading activity.

Before the evening concluded, each panelist offered a candid view of their firm’s requisites for initiating or revising an existing position for the audience to consider:

  • Fidelity wants to understand your story. While the firm favors large-cap stocks, it is the role of their analysts to identify the right portfolio managers to pitch the story to.
  • Columbia Threadneedle places great importance on valuation. If fundamentals don’t support share prices in the later stages of their diligence, they will walk away from the opportunity.
  • Bradley, Sargent believes conviction should be driven by outcome; predictability is a sign of stability, which drives long-term investment.


Thank you to Nasdaq for serving as NIRI Boston’s premier sponsor for this event!