What are Institutional Investor Relations?

 An institutional investor is an organization or business department within an organization that sells and buys securities to earn commissions and other forms of preferential treatment. Institutional investors always look for profitable investment opportunities to generate a return on their investment. These investors are always being pursued investors relations (IR) department of a public company for different types of investment in business operations. IR provides an accurate account of company affairs related to its financial activities and market standing to let investors decide on whether or not to invest in a company. 

IR handles communication on behalf of the company to establish instructional investor relations and keep investors and other shareholders updated with the latest company affairs related to finance, transactions, accounting, and management. Institutional investors usually don’t take interest in micro-cap and smaller businesses because of insufficient shares available. It doesn’t allow them to easily buy and sell the ownership positions. It is why institutional investors are not available to smaller companies for investment in their businesses. 

There are many risks and challenges associated with institutional investor relations. When an institutional investor decides to purchase a company’s stock, it may soak up the majority of the ownership by investing in the majority of the shares available. It restricts the ability of other investors who want to invest in a company’s stocks. As institutional investors hold up the majority of the company, any decision made by them can affect the company’s stock placement, stock prices, stock transfers, and votes in the market. The real challenge that investor relation officers face is to determine whether an institutional investor is a short-term or long-term investor. 

To deal with these challenges and risks, every company has an investor relations (IR) department to manage information on company affairs to handle communication with existing shareholders and potential investors. It is more likely a sub-department of the PR department and specifically focuses on institutional investor relations. An investor relation officer primarily does the following jobs:

·         Investor Targeting

·         Working on disclosure requirements

·         Managing investment communities

·         Managing and monitoring investment sustainability

·         Working as a communication bridge between the company and investors

·         Providing financial information to investors

·         Providing non-financial data for company valuation

·         Observing rules for stock exchanges and security commissions

·         Building receptive capital markets

The IR pursues and targets institutional investors depending on their investment behavior and growth profiles. Investor relation officers typically rely on in-house analysis and advice to build institutional investor relations and investor targeting in a specific segment. If your organization doesn’t have an investor relations (IR) department, hire an investor relations company for your needs. It helps you manage your investor community, financial commitment, and corporate affairs professionally.