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How companies are using the idea of speed dating to get closer to investors.
Jason Karaian, CFO Europe Magazine
September 24, 2007
Investors look forward to research from Dresdner Kleinwort strategist Albert Edwards as much for its humour as its financial insight. One popular note mixed Edwards' thoughts on asset allocation with his speed-dating experience, meeting with a group of singles for rapid-fire dates that last for only a few minutes.
Of the 16 women Edwards met, he made four "matches," that is, both parties expressed interest in meeting again. That was a higher yield than expected, Edwards wrote, "as the friend with whom I went and who was following on after me as I spoke to each woman, said that one woman had asked if I was gay."
Jokes aside, the note gave one of Edwards' colleagues a serious idea: speed dating for CFOs and investors. "Often you bring the CFO to an hour-long meeting and either the investor knows nothing about the company and requires 40 minutes of basic education, or it becomes clear after ten minutes that the institution isn't going to invest," says Nick Seaward, director of Dresdner's equity liaison team. "Either way, the CFO is wasting time."
With this in mind, Seaward organised Dresdner's inaugural "speed investing" event in May, bringing together 24 companies and 24 institutional investors in London. After a dozen 20-minute encounters with investors, companies usually received seven or eight requests for follow-up meetings. Similar events in London and New York later this year are sold out. "Word spread that this was something worth doing," Seaward notes.
Nick Beighton is a fan of the idea. The finance director of Luminar, a £204m (€303m) UK nightclub operator, met ten investors at the May event, something that would have otherwise taken "two and a half days of trawling." Beighton suspects that at least one asset manager bought shares after their follow-up meeting, making the speed-investing effort worthwhile.
But old habits die hard. Some executives simply raced through standard hour-long presentations in 20 minutes, Seaward claims. He suggests introducing two presentations: a basic, abridged introduction to the company and its investment case for investors less familiar with the firm; and a more detailed update on the previous quarter for those who already follow the company. As everyone on the dating scene knows, it takes a special effort to make a good first impression.