Investor Targeting

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Getting in front of investors who are active in your sector but may not be familiar with your company should be a top priority for public company management teams. It is especially important for micro and small-cap growth companies who are not yet household names in the investor world to actively pursue this practice in order to maintain a readily available, informed base of investors and improve liquidity. Unfortunately, for some companies, acquiring new investors proves to be difficult, despite a track record of consistent growth and solid financials. That is why targeting these potential new investors is a first critical step.

We employ two complementary approaches to targeting new investors:

First, a traditional targeting exercise that focuses on utilizing a third-party database such as IPREO or IR Insight to pull a list of investors based on common metrics; and

Second, a bit of “secret sauce” based on our experience and familiarity with a range of funds and their investment profile. Here at Gilmartin Group, our investor targeting programs leverage an extensive list of investors, meeting history, and our collective experience working with companies in the healthcare industry.

Combining these approaches within our targeting strategy is beneficial because it matches a company that may be overlooked by a major fund with a fund that may go generally unnoticed. Skimming over a fund can be the result of multiple things including size, location, lack of publicly available information, and probably most notable – no relationship with investment banks. Regardless, investor outreach without a proper strategy can easily lead to exhausted resources, so having a list of investors at your demand that have already invested in or are consistently meeting with comparable companies should significantly improve your process. 


In these targeting exercises, we break the U.S. into the traditional regions and identify different tiers of investors for each region based on the company and sector in which they compete.

Our first approach with this initiative is somewhat standard. We determine a set of peers in the company’s immediate sector, for example: diabetes, cardio, ortho, pharma, etc. This list of peers can vary largely in market cap, so it’s important to use comps within a range closest to your company. The goal in this step is to narrow the range of investors to ones that are familiar with your space and also have an investment thesis that seeks companies similar to yours. Once a peer group is determined, pulling the collective ownership sorted by fund will provide a nice canvas to work off.

Further leveraging our experience with other healthcare companies with a similar market cap, growth rate, valuation, etc., provides a separate list of targets beyond the traditional practice of investor targeting.

The next steps for finalizing the priority targets for your company include:

  • Cross-referencing both lists and highlighting duplicates;
  • Removing index and passive funds;
  • Removing funds with high turnover rates (NOTE: some may be worth keeping for their significant investments in your sector and positive reputation);
  • Separating the long-only targets from the hedge funds; and
  • Employing a tiering system to highlight best targets/anchor accounts from back-up targets.

Anchor Funds

The first group of funds, also referred to as “anchor” accounts, are the household funds in each region who have strong reputations for their extensive diligence in research and vetting. Another way to think about an anchor account is a tier 1 fund that does not require data to validate the decision to target them; simply put, they are the funds every company aims to meet with when in the area. The great thing about anchor funds is that their position in a stock can serve as a way for smaller funds with less resources to double check their vetting process, and their reputation alone will put the company on the radar of other funds who tend to be slightly reactive.

As a side note, whether or not a meeting request is accepted by an anchor fund, the feedback can be extremely helpful; that is why it is important to always follow up and ask their reason for not taking a meeting. Their reason could be as simple as a scheduling conflict; on the other hand, they might tell you they are currently focusing on other sectors.

Tier 1 & 2 Targets

Next is what we consider tier 1 targets. These funds are generally skewed towards long-only investments with a sizeable amount of equity assets under management. Unlike the anchor funds, these funds are chosen based on the data you pull and analyze that makes them a good fit for the specific company. Finally, a list of tier 2 funds is created. This list is where most of the overlooked funds can be found. It can include funds not large enough to file 13Fs that still provide a solid addition to a company’s shareholder base.

With your target list now complete, the next step is to sit down with the entire management team to discuss the most efficient way to get in front of the new investors. You may decide to find time before or after an industry event, or augment your investment bank conference schedule to meet with some funds in the area. Similar to an investment bank conference, additional meetings from these targeting lists can be arranged surrounding a bank-hosted non-deal roadshow, or even to set up a roadshow without analyst support. Another option is for your company to host an investor day.

Role of Location

Location can also be part of the issue. New York, Boston, and the Bay Area are very popular regions to hit on the road, as they generally have the most investor demand and are therefore considered the most worthwhile locations. In our experience, there has been very little trouble setting up a good day of meetings in those areas, but there are plenty of other regions worth considering. Lackluster schedules in other regions, like the Midwest, Pacific Northwest, Southeast, or even the Mountain time zone can be a result of reaching out to the same list of investors or bad timing and/or planning. With a list of targets for each region, companies can feel more comfortable about setting aside time to go to a new region or a region that, in the past, was not as productive as they had hoped.


There are many benefits to a thoughtful, advanced approach to investor targeting. Such an approach allows companies to feel much more confident setting aside time for investor meetings because it may ease the thought of having a meager schedule at a conference or during a roadshow. At the same time, a strategic approach makes the time spent on the road much more productive. Of course, there are certain times when going on the road should be avoided. You can find more information on this topic in our blog about Preparing Your 2019 IR Calendar.

Meeting with the same funds and people while on the road can be productive in terms providing updates; however, it does not diversify your shareholder base very much. Performing well also plays a big role, but using the Gilmartin team experience and our wide-ranging database of healthcare clients to take a slightly different approach to investor targeting can help bolster and diversify your investor base with a list of target funds that are best suited for your company.

Ready to strengthen your investor targeting approach? Our team is ready to consult you every step of the way. Contact us today to get started.

Hunter Cabi, Analyst

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