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Intro to an IRO: Stuart Kingham, Head of Investor Relations at Challenger Limited .

Nasdaq Corporate Solutions is highlighting the Investor Relations Officers who have performed beyond the traditional role of the IRO.

Intro to an IRO: Stuart Kingham, Head of Investor Relations at Challenger Limited

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Stuart Kingham is Head of Investor Relations at Challenger Limited, an Australian-based investment firm committed to providing its clients with financial security for retirement. With over 10 years of Investor Relations experience, Stuart maintains a major role at Challenger by facilitating investment communication and strategy with key stakeholders in the investment community.

What are your top priorities and biggest challenges?

Investor Relations plays a key role in ensuring the market can ascribe fair value; to do this, we must know the business not only from the ground up, but also top down. At Challenger, we’re fortunate to have internal teams that understand our IR strategy and what we are trying to achieve. This is right across our finance teams, strategy, distribution – all of the key functions. We also have a management team that values proactive investor engagement, so we have a great platform on which to build our IR strategy.

Our strategies and priorities haven’t changed for some time. They are focused on proactive investor engagement and providing transparency, both on an operational and financial level. This coupled with proactive investor engagement has been very successful for us over the years and will remain our top priority.

In terms of challenges we’re focused on, we work in a market that is rapidly developing, which is both exciting and challenging. It means IROs must play an important role in educating the market as market participants have less time these days. IROs need to be effective communicators, not only on the company but also changing industry and market trends.

How have you seen the IRO role evolve in the past few years?

Equity markets are rapidly changing. There are revenue pressures across both the buy and sell sides and now as an industry we are working through the implications of MiFID II. This means IROs need to play a much greater role – more direct investor engagement, less support from the sell side and less thought-provoking equity research.

At times, there can be a vacuum of information and this can be challenging. Markets are becoming much more volatile, placing even greater importance on the long term and ensuring you present a compelling investment thesis to a targeted audience. This is become critical to ensuring IROs are effective.

Short-term trading has also increased, creating greater demands on our time and increasing the need for more external engagement.

How can the IRO best engage the investment community?

It’s important to be available and respond to investors in a timely way. Investors need to be confident that when they reach out to you, you are in a position to help. You need to treat everyone the same. Be fair and provide the same information to all. You need to be recognised by both the buy side and sell side as a valuable contributor to the story, and you can only do this if the market trusts and respects you.

You need to have good access to internal information and have a very good understanding of the operational and financial performance of your company. Internal relationships are as important as your external ones. They go hand-in-hand and you can only be effective if you have both.

At Challenger, I’m very fortunate to work with a team that understands markets and places a high value on an effective investor relations strategy.

What is one important initiative that you’ve championed or experience that you’ve had as an IRO?

At Challenger, we have embraced transparency to ensure we achieve fair value. Five years ago, Challenger traded at a 5x P/E – the market didn’t understand our products, didn’t understand our market position and underappreciated the growth opportunity, in part due to lacking some financial disclosures. As a result, the market applied a transparency discount.

We have embraced transparency and improving our market disclosure has been a journey Challenger has been on. But you only set out on this journey if you have internal stakeholder support and a solid understanding of what the market needs and how it will react to certain disclosures.

Challenger’s story is a successful one – our P/E has expanded to 17x today, with a more diversified share register and ultimately much stronger shareholder understanding and support. The bedrock to this was improving our disclosure and changing our investor and targeting approach.

What resources do you rely on to stay up to date on the capital markets?

We live in a digital world; there is a huge amount of information available. It’s important that you know your shareholder base, and leverage tools like the Nasdaq platform to know as much about your shareholder base as possible.

This is however only the start. The internet is full of information on your market, your investors, what stocks investors are buying and selling and what factors they are considering.

These tools and digital insights provide valuable information to help you understand what’s happening with your shareholder base, it helps put you in their shoes and provides greater insights.

What advice do you have for the next generation of IRO?

An IRO is a privileged position at any company. You get exposure to the Board, work closely with the executive team, and get this fantastic top down view of the business from a very unique vantage point. It’s a role that will provide fantastic business experience, as you see it all and some great life skills, like perseverance.

To be an effective IRO, you need strong relationship skills, both internally and externally. You need to be across the detail of your business and the markets you operating in. You need to be seen as having good insights and be trusted by the market. You can only do this if you have the right internal support. You need to make sure you give the market what it wants – not too much, not too less, it’s a fine balance.

What are the benefits you have seen from being a Nasdaq IR client?

Our focus over the last few years has been attracting offshore investors. We are trying to target investors who have a deeper understanding of our products and the value proposition we provide to our clients. It’s been important to partner with a truly global provider like Nasdaq, someone that can provide global insights, not local ones. These insights coupled with easy-to-use digital tools and improved investor targeting have helped drive our offshore holdings up to 45% of issued capital today from about 10% five years ago.

The key is to partner with a global player, who truly understands what we’re trying to achieve.

About Challenger:

Challenger Limited is a publicly listed investment management firm. Established in 1985 and listed on the Australian Securities Exchange in 1987, Challenger Limited now manages in excess of $50 billion in assets, and is part of the S&P/ASX100 Index. The Challenger group is focused on providing Australians with financial security in retirement. For more information about Challenger visit their website at: https://www.challenger.com.au/

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This communication and the content found by following any link herein are being provided to you by Nasdaq Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, “Nasdaq”), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Nasdaq, the Nasdaq logo, and Nasdaq Corporate Solutions are registered and unregistered trademarks, or service marks, of Nasdaq, Inc. or its subsidiaries in the U.S. and other countries. ©Nasdaq, Inc. 2018. All rights reserved. Comments or opinions expressed on the blog are those of their respective contributors only. The views expressed on this blog do not necessarily represent the views of Nasdaq, Inc. or any of its affiliates, or its or their management or employees (collectively, “Nasdaq”). Nasdaq is not responsible for, and disclaims any and all liability for the content contributed by contributors to the blog. 

This communication and the content found by following any link herein are being provided to you by Nasdaq Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, “Nasdaq”), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Nasdaq, the Nasdaq logo, and Nasdaq Corporate Solutions are registered and unregistered trademarks, or service marks, of Nasdaq, Inc. or its subsidiaries in the U.S. and other countries. ©Nasdaq, Inc. 2018. All rights reserved.

Comments or opinions expressed on the blog are those of their respective contributors only. The views expressed on this blog do not necessarily represent the views of Nasdaq, Inc. or any of its affiliates, or its or their management or employees (collectively, “Nasdaq”). Nasdaq is not responsible for, and disclaims any and all liability for the content contributed by contributors to the blog.

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