INTRO TO AN IRO: MAXIMILIAN ZIMMERMANN, GRUPO HOTELERO SANTA FEBy Allison Gosman / Nasdaq Corporate Solutions
Maximilian Zimmermann is the Director of Investor Relations at Grupo Hotelero Santa Fe. Max has over 10 years of Investor Relations experience. Prior to joining Grupo Hotelero Santa Fe, he worked in industrials at Nemak as Investor Relations, bringing the company public in July 2015, as well as in the consumer and retail industry at FEMSA and Coca Cola FEMSA. He also has experience in corporate finance, mergers and acquisitions, and a strong knowledge base of the investor relations community in Mexico.
1. What are your top priorities and biggest challenges?
My top priority is to get more and more investors to know about Grupo Hotelero Santa Fe. The company’s story, fundamentals, and growth prospects are great, but we have relatively low liquidity and market cap, therefore marketing the company adequately is key. Also, looking for the right long-term investors around the globe has been challenging. Many funds are not investing in small, low liquidity mid-caps in Mexico at the moment because of elections coming up next year. Even though we are only covered by three investment banks, I'm constantly in contact with all the real estate analysts in order to create more awareness of the company.
2. How have you seen the role and expectations of the IRO evolve in the past few years?
I’ve worked in Investor Relations for over 10 years, but I just started at Grupo Hotelero Santa Fe at the beginning of this year. Investor Relations has changed a lot as many IPOs and smaller companies in Mexico are putting more attention on their IR efforts. More and more companies have realized how important Investor Relations is. For a while, making a company public was viewed in the form of a bond where you didn't really have to follow-up too much with investors. But the truth is that it's an ongoing process where you really have to be close to the market, the analysts and the buy side in order for them to understand the story and get feedback of any questions they have, and try to be ahead of what's happening to the stock.
Back when I started in IR at Coca Cola FEMSA, there were relatively few Mexican companies that took Investor Relations seriously. Now, with all the tools available, it's easier to market the company so you are able to reach smaller investors that were tougher to contact in the past. I also think globalization has helped us reach all types of investors. It used to be about the larger investors such as Capital, Fidelity, or other big institutional investors, but now there are many more options and many more companies to compete for investor appetite with companies fr om all over Latin America and even Asia.
3. How can the IRO best engage the investment community?
I think it's all about the marketing. First off, you have to start with the basics and give the same message to everyone, so everyone has to be able to have the same access to the same information. You also need to have a pretty solid back office for your Investor Relations efforts. That means getting out your press releases, your earnings reports, your annual reports in a timely fashion, while following regulations. After that, attending conferences for the sector is very useful, but it's not the exclusive place to market. Many times conferences are very convenient because you go to a city and see a lot of funds, but often the investors that you want to see, if you do use targeting analysis, aren't those you are presented with. It’s about finding a combination of conferences and non-deal roadshows. Additionally, I think it's important to set up a non-deal roadshow where you have a mix of investors. Start with the investors that the investment banks want you to meet and ask them to set up meetings with the people who align with your targeting efforts to create a win-win scenario.
4. What is one important initiative that you’ve championed or experience that you’ve had as an IRO?
I would like to touch on two. The first one is when I was a part of the FEMSA team, which is currently the largest company in Mexico's IPC Index. Back in 2009, I was there for the Heineken transaction wh ere they bought Mexico's FEMSA brewery which represented more than a third of the company's market cap, and paid FEMSA with cash and shares. It was a very big multi-billion dollar transaction. We had a minute-by-minute game plan that included many players, from the CEO to Corporate Communications and Investor Relations. Everyone had their specific role in getting the information out to investors in a timely fashion. It was our team's job to put out the press release and talk to these investors and analysts. We were actually at a conference in Cancun, organized by a large broker, so we were able to address a large part of our investor base there. Additionally, we made many calls and held many meetings. Without a doubt, it was a very interesting experience from the IR perspective because we worked together with corporate communications and management to put out the right message in a timely fashion.
The other initiative I would like to mention was in 2015 when I participated in the IPO of Nemak, which is an automotive aluminum parts supplier. It was a great experience because we helped set up all the back office operations from the IR efforts to the marketing materials and together with management, established the story for investors. It was remarkable because when I met with investors afterwards I knew that we had made promises to them at the IPO meetings and about the future. All of us were accountable for those results, so that was something worth the experience on the IR side.
5. What resources do you rely on to stay up to date on the capital markets?
I constantly read research from all the banks, newspapers, and Nasdaq IR Insight® in the mornings to be up-to-date on what's going on in terms of the market and the economy of the countries that Grupo Hotelero Santa Fe is interested in. I also highly recommend you receive a daily digest with important news so you can get the most important information from a single source.
For me, Nasdaq IR Insight® is the only tool out there that is made by IR professionals for IR professionals. The investment that Nasdaq has put into their program has really been worth it because you can integrate it with Excel, Word and outlook. You can do your own targeting analysis, send out your CMS emails, and even incorporate it with a wire service which you can also have at Nasdaq, with GlobeNewswire. It’s very useful to have everything on one user-friendly, uniform platform.
6. What advice do you have for the next generation of IRO?
You always have to challenge the status quo. In Mexico, many companies use suppliers that aren't worth the money that they're paying and then there aren’t many people who know about Investor Relations overall. If you always stay updated with the newest platforms, attend the right IR seminars and round tables, and use all of the financial technology available to get to the right investors, you're doing it right.
Also, keep a good personal record of investors, analysts, and bankers. These contacts will be very useful in the future, and if you keep the notes you’ll know exactly what their follow-up questions will be next time you meet. Your contacts will feel that they are important because you know what they talked about during the last meeting. That's something that investors do all the time, but not many IROs do. There are a lot of best practices in IR that some companies who have been in the market for longer periods of time are following, but those are not necessarily the benchmarks they could or should be using. That's why attending IR seminars and roundtables will help you understand much more about what's going on in the IR community. Following up with chapters such as NIRI in the US can help you stay up to date and informed on what you're doing