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Uncovering Hidden Investment Opportunities Since 1972

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Investment Banking and Private Equity

Private equity and investment banking both are terms commonly used in the world of business. But these big terms tend to confuse commerce students who are just beginning to learn about the various aspects of business. So what exactly is the difference between these two?

 

Let's start with the basics. To put it simply, investment banking is an advisory service offered by investment banks to assist companies/businesses in raising capital. Companies choose the best of investment banks to seek advice on matters of mergers and acquisitions, and restructuring. An investment bank also supports its clients by facilitating the capital-raising process. A private equity fund on the other hand, is a pool of capital collected from a variety of wealthy investors/organisations. The capital from the fund is directly invested in other businesses. Investment bankers are advisers and private equity firms are investors. That's the most basic yet major point of difference between the two.

 

The major roles of a PE associate are as follows:

 

1) Raising funds

While the complicated process of raising funds is handled by the most experienced PE professionals, the associates can be asked to assist in the process. They can contribute by putting together facts and figures regarding the fund's past performance, past investors etc.

 

2) Investment opportunities

PE associates play a crucial role as they are always on the lookout for investment opportunities. Based on various financial models, such associates identify key reasons for investing the capital of the fund in a particular company.

 

3) Managing investments

Those associates with prior management consulting experience may be allowed to help in increasing the operating efficiency of portfolio companies. But how involved these associates will be depends on the strategy of the fund.

 

4) Exiting

Private equity firms usually invest in a business with an objective of exiting at a later stage. Exit strategy too needs an in-depth understanding and analysis of various factors.

 

The work life of investment bankers and private equity associates differ greatly from each other. The life of an investment banker is hectic with no fixed work timings. Also investment bankers should be capable enough to work well even with little direction. PE associates do not have such a hectic work life but then they do not enjoy the same level of monetary benefits as investment bankers do.

 

For more information consult with the experts at CL King & Associates
CL King has worked as a Co-Manager for Bond Offering, Subordinated Notes Offering, Notes Offering and many more for the reputed firms such as Citigroup, Walmart, AT&T’s etc.
To find more details, please visit here: http://www.clking.com/

How Consultants Can Help Business For LPO Launch?

IPO (Initial Public Offering) is a way to raise funds or capital by transforming a private company into public company. It leads to selling of company's share among the general public. There are many companies in the market who don't have enough capital to start or expand their business. IPO launch is becoming a very common and useful process to raise fund without any risk factor.

 

Generally Entrepreneurs with goodwill are easily able to raise fund through such method. But how a startup or a company with lower fame will be able to raise capital? Business Consultants like CL King & Associates are always there for helping such entrepreneurs.

For a company, selling its share can be proven as a successful growth but sometimes IPO can take your company into huge losses as it solely depends on the SEC. Thus IPO is having various advantages but along with disadvantages. So before planning anything you must be aware about key points about IPO.

 

Good Amount of Capital

Through IPO, a company can raise a very descent amount of funds as there are many people in the market who want to invest their money in stock market. The both side profit leads to easy fund raising for any company. But sometimes funds are dependent on the name of the company and its yearly turnover because people are afraid of investing in new or unknown firms.

In such case, you can take the help of consultants who can help you to build your brand image and make recognition in the market through various branding strategies and media.

 

Publicity

The idea of IPO will surely bring publicity to your company that is a sign of further growth and development. Publicity can play an excellent role in making your company known among people on larger scale. It also helps in branding of company for achieving long term goals.

 

High Risk Factor

If you are investing in an IPO that doesn't means you are saving. It can be profitable as well as loss deal because it depends on the rise or fall in price of shares respectively. Therefore, there is a high risk in investing in IPO and most importantly there in no scheme for compensation for investors. It is totally a choice of investor as company doesn't have such history that can help you in making decision.

 

Time Taking and Complicated Process

IPO Launch is not a simple process but is involves various complicated steps from making goodwill to find investors and so much of paper work is also there. Sometimes companies also conduct campaigns for making people aware about such deals.

 

For more information consult with the experts at CL King & Associates.
CL King has worked as a Co-Manager for Bond Offering, Subordinated Notes Offering, Notes Offering and many more for the reputed firms such as Citigroup, Walmart, AT&T’s etc.

 

Also read: How Do You Know When Your Business Is Ready For An Initial Public Offering?

Finance Metrics and The Essential Contents

Managing money is not always about cost cutting. It requires analytical approaches that will indicate which part of the expenses should be minimized or totally eradicated. As such, there has to be measurements in managing money; and in terms of report, this is translated into what is called finance metrics. One cannot just simply decide that a certain process or machine be removed as it is expensive. Decisions based on assumptions are more likely to cause financial damage than assistance or resolution.

 

There are many aspects in managing finance. There are several Key Performance Indicators or KPIs that need to be incorporated in the report when finances are measured. One of these is job costing. Whenever there are projects that has cost, especially for manufacturing, a job costing analysis should be made. It is in this principle or light that a job costing report should be prepared so the managers will get a picture of what is transpiring. This way, they can also see if the investment is earning or if there is much potential for expansion.

 

Job costing shows people the total accumulated costs of a certain project, and this should include overhead expenses, too. Full costs are calculated against the revenue, and this is more often than not measured by department or division.

 

The first part of the job costing report is the job ledger. This should contain accounting transactions in a specific order. Normally, this contains job orders and job numbers categorized in a specific way for easy tracking. This contains revenues, costs, indirect costs, and receipts for all the jobs done for a specific project. The job ledger may be sub-categorized in different buckets to easily identify the pain areas in expenses and lost revenues. This may include current cost, purged job cost, billing cost, and invoice ledgers.

 

Another metric that can be used in analyzing financial status and movement is discounted cash flow. This is a method in appraising a company and its financial assets. Perhaps the downside of this approach is that it is based on the estimation of future cash out flow instead of current expenditures. However, this estimation is backed up by historical data, which is the foundation of any statistical study. Normally, discounted cash flow is only applied in investments and real estate development industries. However, its effectiveness in gaging financial performance has led it to become one of the most used tools in financial studies.

 

Discounted cash flow may be confusing to some. The problem is that this is not based on simple addition and subtraction. There are a lot of financial formulas that need to be used because one has to factor in the value of treasury notes and the span of time that has elapsed since the assets were purchased.

 

In general, people who want to manage their finances should consult an expert in finance management, whether this is personal or corporate finance. It is always best to consult experts like those at CL King and Associates when developing finance metrics, to be sure that the things being measured are ultimately aligned with the goals of the company.

 

To learn more, consult with the experts at CL King and Associates.
CL King’s Corporate Services unit offers specialized services and objective advice to help corporate clients achieve flawless execution directly in the capital markets. You can call at 518.447.8050

Valuation - The Essence of Corporate Finance

Valuation is an important process in corporate finance and it helps to determine the present value of assets. Both, assets and liabilities of a company can be valued. The process is important for all business owners, big and small, to know how much their company is worth. Valuation is needed for the purpose of analyzing investments, capital budgets, preparing financial reports etc.
 
Valuation is necessary so that if and when a company is put on the market, the buyer knows clearly how much are the company's management, capital structure, and assets are worth as well as what sort of future earnings prospects it presents. Valuation is also necessary from the purview of legal requirements for companies. Often, a company's assets need to be valued for the purpose of tax, accounting etc.
 
Increasing shareholder value is one of the key functions a manager needs to take care of. Valuation is an important step in decision making and assists managers in making important decisions. It provides an objective overview of the company's current market position to the managers. With its help managers can make both long and short term strategic decisions as well as plans with respect to capital investment, investment banking or other financial planning matters.
 
There are different ways in which valuation is done i.e. discounted cash flows, multiples based and options based valuation. Of these ways, one of the most commonly used methods is the discounted cash flow method. According to this method,
 
 
Value of an asset = Sum of the Present Value of All Future Cash Flow
 
  • Asset: Bonds, stocks, business, house, art, etc.
  • Present Value: It refers to the future value divided by (1 + discount rate) raised to the power of the time period.
  • All: Refers to the recurring as well as onetime cash flows, savings etc.
  • Future: Only future cash flows are considered. Past cash flows are not considered.
  • Cash Flow: Refers to the inflow and outflow of cash and not the net income.
 
The first step in the process is the estimation of future cash flow over a given period. The next step is to determine the growth rate after the forecast period. This future cash flow is then discounted to the present value. Interest and principal repayments, future selling price and dividends, free cash flow from the work, rental and/or any other income is used for discounting the future cash flow to its present value. Finally, the terminal cash flow is discounted to current value. The assumption made here is that there is continuous cash flow always. All the present values of assets are summed up to get the present value of cash flow over the forecasted period and the horizon value.
 
The process of valuation is based on fundamentals and not current market sentiment and hence, the valuation is objective and accurate. In this process, since the values of assets are calculated based on the cash flow it provides a real indication of value. Hence, valuation is an extremely important part of corporate finance and decision making.
 
For more details you can consult with our experts at CL King and Associates.
CL King provides investment banking, equity research, sales and trading, and investor services to corporations and institutions. Call at 518-447-8050 today and explore some best investment deals for you!
 
 

Benefits Of Choosing Corporate Strategy Services

Corporate strategy services help in building and sustaining competitive advantage. Businesses need innovative strategies to keep pace with the changes that place in a typical business environment. Strategic services help in laying down the groundwork for developing the corporate strategy and putting the action plan to work.

 

Most businesses find it difficult to grow beyond a certain level as they are not clear about what they want. The corporate strategy services can help businesses get a clear perspective of how they need to grow in the future. It can also help address the challenges that the business may face in the coming years.

 

Top Benefits of Choosing Corporate Strategy Services

 

  • When you choose good corporate strategy services, you may be able to improve the overall performance of the organization. When choosing strategies, it is important that you consider the current and future capabilities of the organization. This can help in achieving maximum efficiency and competitiveness.
  • The strategy services can help in managing the unique challenges of your business. The new strategies can help improve efficiency by providing you the tools that can help propel growth.
  • Planning and execution of new ideas becomes easier when a step to step guide is provided by the strategy service providers. Implementation of strategies becomes easier and helps things move forward.
  • If the current corporate strategy that is been followed is not able to deliver success, you may be able to make a fresh start using the strategy services. The strategy service providers have qualified professionals who may be able to provide you new ways to expand and grow.
  • The corporate strategies that can be used for businesses may vary depending on the industry and level of competition. Most businesses make the mistake of blindly following the strategy of their competitors. It is important that the strategies are customized as per the specific needs of your business. The firm may be able to identify those strategies that work best for your business based on a careful analysis.
  • It can help in streamlining the operations of the organization so that a lot of time and effort is saved. This can also prove to be cost effective for the organization. The strategy services can help in filling the skill gaps in the management when faced with obstacles.

 

When you choose the correct corporate strategy it can help in achieving all your business goals and objectives easily. If you make a wrong choice you may lose a lot of time and effort and this can be detrimental for your business. Irrespective of the size of the organization it is important that you choose good corporate strategy services so that you are able to grow successfully in a competitive business environment.

 

The corporate strategy services can help organizations focus on the core areas of the business. This is important for a sustainable performance in the future. When the core areas are determined accurately it can help businesses grow beyond the growth achieved in the current year.

 

For more details you can consult with our experts at CL King and Associates.
CL King is Uncovering Hidden Investment Opportunities Since 1972. We provide investment banking, equity research, sales and trading, and investor services to corporations and institutions.

Call us 518.447.8050 today and let us explore some best investment deals for you! Or visit us here: http://www.clking.com/

Capitalization and Medium Term Notes

Why is there such a requirement for making an investment in non-public programs that use MTN's or medium term notes and sometimes Treasury Bills? Since the mid-1990's to the present time, Medium term note investments have risen ten folds. Corporations in the likes of Sony Capital, Harley Davidson, LG and other well recognized entities have all issued Mid-Term Notes by their assets for enlargement and development.

 

From lows of less than 2,500 in all of 1996, you can see the interest towards non-public trading gains when markets and the economy in total degrades catapulting the requirement for short term, well secured notes backed by established companies, banks, and asset holders.

 

Hedge Funds, Portfolio Managers, and non-public backers are typically drawn to these non-public programs and understand the guidelines and laws that follow.

 

Less experienced, smaller financiers are dismissed thanks to the tension levels and constant hectoring of updates. High-net worth, seasoned speculators have their funds mixed with other clients to build a bigger trade bases, if individually massive enough, say one billion and up, enter into a personal trade program by themselves, however they also may actually be bundled up with other client assets to reduce the amount of trades being managed. Their funds represent these MTN trade programs and are an incredible economic inducement in their own right by the generation of liquidity by the workings of process. The derived profits most frequently than not together with the leveraged quantity of the funds, will go into further capitalization of new firms assumed to have important expansion chances in industries like: medical care, bio-technologies, software/hardware and telecommunication companies.

 

These non-public trade programs increase the value of these firms and further force advances in those particular sectors. Though usually $100 million and up will roll out the welcome mat, financiers can sometimes, take part with $10 million to the specific fund of the fund manage, which is unlikely. For those reduced quantities under $10 million, the platform executive may not let you take part unless you are a commissioned financier with a net worth between $10 to 50 million dollars. Is it worth using the time and consideration? There are many key hazards in any kind of investing since you fundamentally, with any investment, cannot guarantee a return (except low yielding T-Bills, for example.) Personal trading is not an exception. As discussed earlier, the charges of personal trade programs that deal with smaller financiers can be higher than you would routinely expect with typical investments, for example, hedge funds. With a pre-established historic return rate on these smaller (less than $100M) funds could be in the double to triple digits as reflected in prior eventualities over a period of time with the effect of compounding.

 

You can learn more from the CL King and associates experts. CL King offers complete investment banking solutions and has worked as a Co-Manager for Toyota Motor Credit’s $1.5 billion 2-tranche offering of 2-year floating rate and 5-year 3.45% Medium-Term Notes. The issues are rated Aa3 / AA-.

Click here to read more!

Corporate Service - The Multiple Corporation Strategy

When you decide to incorporate your first business the very next thing that you should do is to incorporate two to five more businesses even if you don't have any plans on using them at this point.

 

There are several key reasons for this strategy and if you are serious about building a business and possible corporate credit you should follow these steps suggested by our experts at CL King and Associates.

 

  • Once you have your first business incorporated and you're working that business and growing that business, you may find that in time for one reason or another that you may need to shift some of your assets around for protection or simply to go after new business opportunities that may present themselves to you that won't work with your current business structure.
  • After you have established your first corporation and have built its credit worthiness, you will find it is easier to build credit for your other corporations by simply sharing that credit with your other corporation though a process known as daisy chaining. This is a super way of building the credit multiple corporations from all of the hard work that you have already done.
  • Having multiple corporations set up allows you to create your own set of shelf corporations. These are corporations that are just based on their age alone which will allow you to get any business up and running in a fraction of the time it would normally take. These shelf corporations will add real tangible value to your bottom line in many ways. Such as if your ever chose to sell one, the going rate is approximately $1,000 per year of age, and if it has any established corporate credit attached to it the value can triple or even quadruple.
  • Statistics say that most businesses fail in 1 to 5 years of their inception, so if this is true, by simply having multiple corporations in the wings ready to go, this fact will no longer mean anything to your. Simply because you planned ahead and quietly and strategically created back businesses with unsecured corporate credit financing already established.
  • These four simple steps will see you through almost any business ups and downs if you apply them correctly and get started today. Right now implementing them, you will find that in less than a few months you will not only have your first corporation set up, but you could have already established thousands of dollars in unsecured lines of corporate credit.

 

For more details you can consult with us at CL King and Associates.
The firm is offering corporate clients achieve flawless execution directly in the capital markets. Call us 518.447.8050 today and let us explore some best investment deals for you!

How to Select an Investment Banker?

As an investment banker for a boutique firm providing merger and acquisition services and corporate finance advisory services, we at CL King & Associates are often asked to "pitch" our services to prospective clients as they try to figure out who to hire. 

For a business owner contemplating hiring an investment banker, selecting the most appropriate one for your situation and who will provide high quality advice are key. It could mean the difference between a failed versus successful deal, or at a minimum, a poorly executed deal with a low valuation, troublesome terms or high cost of capital versus a well executed transaction.

A troubling issue is that most business owners do not maintain ongoing relationships with investment bankers and will only work with that person once - on that owner's deal. Since it is such an important decision as a lot is riding on the transaction, how does a business owner select the right investment banker to represent his interests?

Here are a few questions a business owner should consider:

 

Do they have the right experience to execute my transaction?

Experience spans multiple spectrums; here are a few ways to think about a banker's capabilities.

 

"Bulge Bracket" vs. Middle Market vs. Business Broker

Bulge Bracket generally refers to the large investment banks characterized by those headquartered near Wall Street offering the full range of investment banking, sales and trading of securities, research, lending, market making and large distribution networks often with a global footprint. Investment bankers are recruited from the top schools, receive formalized training, are put through a rigorous apprentice program and gain a lot of experience.

Business Brokers generally represent sellers of "main street" businesses. These could range from a small, local business, such as a restaurant, to a business with $1-$2 million of revenue.

Middle-market investment banks fill the area in between. Generally, companies with $5 million or more of revenue are too large and the deals are too complicated for a business broker to handle. Due to the minimum fees charged by Bulge Bracket firms, companies with less than $150-$200 million of revenue do not capture their attention. Some middle-market investment bankers began their careers at the Bulge Bracket firms, ultimately electing to focus their high level of experience on middle market companies.

 

Industry Specialization vs. Generalist.

Does they focus on the industry in which my company competes or is he a generalist with a smattering of experience across a broad range of industries? Ultimately, can they banker understand my company, its competitive advantages within the context of its industry and communicate a compelling story to investors or buyers? Bulge Bracket investment banks tend to have industry specialist groups. Business brokers are typically generalists. A middle-market investment bank could be either a generalist or a boutique having a specific industry focus or some hybrid of both.

 

Track Record

Demonstrating a track-record of successfully closed transactions similar to the one being contemplated is where the rubber meets the road.

 

Approach Toward the Transaction Process

Does they customize each transaction process to the client's situation or does he use a one-size-fits-all, taking the same approach for every deal?

 

Personal Network and Relationships

In order to be effective, the investment banker must have a large Rolodex of genuine relationships with investor groups and buyers of deals. Since investing or buying companies is risky, personal relationships built on trust is a cornerstone of the deal business. Building relationships takes time and is usually the result of representing many transactions to these groups to understand their deal appetite as well as get to know the people personally. Just offering a database download or a list without the relationship component is ineffective.

 

Will they devote their full attention to my deal?

You need to ensure that the investment banker has the capacity to handle your deal. If he is managing too many transactions requiring significant amounts of time, he can become distracted and hard to reach. Also, the deal should fit from both a size and type perspective with what the investment banker normally pursues. From a size perspective, is the deal on the smaller or larger end of the spectrum for this investment banker? Larger deals tend to receive more attention.

 

Do I believe this banker will provide honest, candid advice?

Other than what you perceive in personal conversations with the banker, one of the easiest ways to research this is to contact references. Past clients and other professional advisors who have worked with this investment banker, such as attorneys and accountants, can provide important feedback.

 

Do I like working with this person?

A transaction process is intense, interspersed with anxious moments, and requires a lot of time and back-and-forth communication. Having a good relationship is important as you will be working side-by-side with your investment banker.

 

How are the fees structured and are they reasonable?

We have written about investment banking fees in a separate blog called "Aligning Investment Banking Fees with Client Interests", but here is a quick summary. Generally, a credible investment banker will charge a non-refundable retainer upon engagement. This retainer may be a lump sum, paid over time or paid based on achievement of certain activities associated with the transaction process. This retainer should represent a minor portion of the overall fee.

 

The majority of the investment banker's fee, is tied to successful completion of a transaction. The success fee is structured as a percentage of the deal size. Although many business brokers refer to the Lehman formula, few investment bankers use this structure. Instead, they may quote a straight fee percentage (based the amount and type of capital raised or the overall size of a M&A transaction) or a performance oriented fee percentage that increases or "ratchets up" based on hitting certain transaction value hurdles.

Choosing the right investment banker is important. You need to ensure that he can represent your interests well and can act as your advocate in a transaction. Make sure to do your homework.

 

Consider the experts at CL King & Associates for your investing banking needs. The firm transacts directly in the capital markets on behalf of corporations through the Corporate Services business focused on share repurchase and continuous share offerings ("ATMs"). Call at 518.447.8647 to learn more!

Corporate Advisory Services from CL King & Associates

Corporate advisory services from CL King guarantee that a corporate undertaking runs productively at its greatest potential through compelling service of budgetary and different assets. It additionally restores feeble units and old-line companies that aides existing units in finding activities/areas of diversification and growth. As a rule, merchant bankers give these services. The corporate advisory services speak to a vital segment of the exercises' arrangement of merchant financiers. These services for a business endeavor incorporate the accompanying services like providing direction in territories of broadening in view of the Government's financial and authorizing strategies.

 

Forecasting future patterns and reviving old line companies and debilitated wiped out units by assessing their innovation and procedures and rebuilding their capital base. The move to assist the ailing mechanical units is a well thoroughly considered service by the shipper brokers which stayed unattended for quite a long time. The merchant banks have perceived this hole and began assisting sickly with companying to defeat their issues.

 

Many banks created unique ability in the territory and mulls over to offer assistance in this touchy range in one or a greater amount of the accompanying ways, viz.

 

  • appointing of indicative studies,
  • evaluation of recovery prospects and planning of restoration arrangements, plans of modernization and broadening, patching up of the money related and hierarchical structure,
  • orchestrating approbation of the monetary establishments/banks for plans of restoration including budgetary help and so forth help with getting delicate advances from the budgetary foundations for capital use and the imperative credit offices from the bank,
  • checking of restoration plans, and
  • investigating conceivable outcomes of takeover of debilitated units and help with making considerable course of action and transactions with money related companies/banks and different premiums/powers included.

 

The corporate advisory services as clarified don't cover every one of the services rendered by merchant banks to the corporate world. Truth is told there can't be a limited list of these services. As new issues come up there would be a requirement for another sort of corporate advisory, which would take care of those issues. Some merchant banks would respond to the call and rigging up their exercises for giving the required corporate exhortation. This prompts the rise of new corporate counseling services. Thus it can be rightly said in regards to dealer banks, merchant banks like CL King & Associates are the companies which distinguish and take care of corporate advisory services.

Strategic Thinking, Instinct and Flair for Better Investor Communication

Investor communication differs from marketing communication, external relations and media communication (to pick specific ones based on its importance to any company).

Meant in the sense that who-ever is appointed to get investors interested in the company and keeping them interested, should be a strategic thinker firstly. In other words, the investor communication expert should, broadly speaking, be able to find reasons why the share is not performing (or deteriorating); keep the company abreast of a looming fall and, recommend possible interventions.

 

In dealing with the reasons the share is not performing, the investor communication expert needs to know how the global and country specific financial markets operate. It is a volatile and fast moving environment. World events outside your country borders can impact on your company share price within seconds. A company clearly operating below efficiency is a given one to receive a hiding in the financial markets. Therefore instinct, anticipation and preparation of what could happen and what needs to be done about it strategically, is important.

Reading from financial indicators including price-earning, dividend/cash yields, headline earning, and liquidity, what the share is bought at then sold, in the end the closing price rules! It is the key message to the company every second of the day!

 

Right here is where the investor communication expert needs to be able to provide the company with strategic information which would normally be troublesome internal and external company issues impacting on operations; and corporate brand and reputation damage. His internal audience would be those that take critical business and investment decisions. Thus, decision makers from board to executive management level.

Time is of essence in the investment world. The expert responsible for investor communication should apply some instinct reading from global and country specific trends, and have an on-going view of how it had in the past and could in future have a detrimental influence on company share performance. Corporate strategic scenarios once a year are there for a reason, but in a fluid investment environment it is often too slow to adapt to a volatile investment world.

 

An effective board and executive would be able to integrate insight into investor related issues (also critical key driver brand and reputation perception information) with the insight of other experts in the company. Once done, the company would from having an overall picture of the current and potentially future problems impacting on share performance. They would be able to revise former decisions and replace them with new ones to address the performance.

 

While the investor communication expert is not the board or CEO in one, he/she needs to be used as a key resource and be allowed to do the job! Investment communication experts could only fulfil a strategic role if they have a presence among and, attention at the top level of the company.

If not, the company will relegate investment communication to a level where it becomes nothing more than routine external and internal communication to ''we had bad publicity, the share fell again, go put out a press release'. Pro-active participation by the investment communication expert, in shaping the company as an investment proposition (would besides being allowed to participate at top level), warrant true working knowledge of corporate strategy, business strategy, investment sciences, and communication sciences.

 

In other articles one would elaborate on what now seems, wrongly if that is the assumption, to be a super person position in the listed company. Not so! While not an expert with very deep specialized knowledge of each mentioned discipline, without sound knowledge of corporate strategy (investment knowledge would form a critical part) and how it impacts on business strategy and operational execution reflecting the company, the communication expert would not be able to add value to the company. Or, find ways from a communication point of view, to get the share to perform better.

Perhaps it is more realistic to position investment communicators as those can that can influence corporate strategy design, and warn on business strategy that might be a strong risk factor if planned wrongly. If the corporate strategy is not understood properly and used as a framework for business planning it could be the start of share under-performance.

 

Understanding of the investment world, its dynamics, influencer and investors is a non-negotiable. Understanding communication as a science and art is equal to this! Mixing corporate, business, investment and communication strategy is a tough task. You might be very knowledgeable about the investment world but would you be able to drive effective investor communication. Similarly, you may be an excellent marketing communicator in manufacturing and retail or a financial journalist. Would these fields make you a versatile investor communicator? Perhaps, but also not perhaps unless you can think strategically!

 

Investor communicators find itself in a position where they have to cope with different corporate platforms. Worldwide in the investment world mergers, acquisitions, take-overs, divestment and restructuring of state owned assets towards selling off, are taking place daily. The list of possible platforms are by no means exhaustive.

 

It might be that investors have in its totality bought (or holds majority shares) in a state-owned-enterprise. The investor needs to not only make and keep the enterprise a sustainable one, but also raise capital to grow the new company. They would go to the investment market. Investor communication would play a critical role in the overall process.

A private company that lists on the stock exchange would be another corporate platform. Small and medium sized companies could find themselves in a start-up phase, or still growing. They would need capital and the strong option would be to list.

 

Private to listed company would present the investor communicator with a very particular challenge of introducing the company to investors and, maintaining the shares bought by them. Many investors are careful when they decide to put money into a company which is still to prove it is going to survive. More or less the same with companies that seems to grow, albeit gradually. Investors expect dividends in the near future of the company. Investment horizon is very much alive in the investment world.

 

Shaping the investment proposition (message 'why-buy versus 'do not sell'') puts the investment communicator to the test. If the message and evidence behind it are wrong the choice of the voice (channels) would also be either wrong or ineffective.

The right message needs acumen and flair, be it proactive and preventative, or during a crisis where shares are tumbling (reacting to the crisis). Here, the worth of a true investment communicator gets tested.

 

As the saying goes: Prevention is better than cure! A board and executive should allow the investor communicator to fulfill the role of a recognized strategist in the company. They should allocate sufficient funds to enable a proper investment communication strategy with all the necessary structures, systems, human experts and technology in place. Then get to work!

The right person and people (staff and co-operation from others like the board, executive and respective experts) would be the key to getting value from whatever is spend on investor communication.

Effective investor communication is all about getting investors interested in buying shares, and thereafter keep them on board.

 

If you have any query then consults with the experts at CL King and Associates. CL King Corporate Access is a strong partner in building investor relationships with a long-standing commitment and track record of facilitating meaningful dialogue between public company managements and institutional investors.
Call at 518.447.8647 or visit http://www.clking.com/

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