Seems like there is never much talk about Investor Relation positions on here.
It seems to me to be a nice combo of corporate finance, investing, and general strategic management.
What am I missing? Why so little love for it?
it’s like a has-been job.
I have noticed some companies hire former good sell side equity research analysts to head up their IR department. It does seem like a sweet gig and you are constantly interacting with the executives etc. I think you need to be a good presenter and communicator as you are constantly making presentations to investors and answering their questions. It may be somewhat of a tough transition if you are used to being in your cube crunching numbers.
I did IR at a corporate for a couple years, and I thought it was fun. I had a lot of interaction with our CEO and CFO and the rest of the management team, which was great. I recommend it for anyone that’s in corporate.
I’m not entirely sure why it doesn’t get a ton of respect, but one theory is that there are a lot of folks with communications backgrounds, opposed to finance, in the corporate roles, and they refuse to learn. Those folks are able to stick to their script, but that’s likely it. They aren’t able to answer tough questions from investors or analysts. So, then the financial community just wants to talk to the CEO/CFO to get their questions answered and IR is just viewed as a roadblock. So, a few bad apples give everyone a bar wrap.
Internally, a lot of the folks in the rest of the business often don’t really understand what IR does. So, they too can find us annoying when we start asking for information around earnings time or when preparing for a conference. The ones that understand the role are a lot more understanding; however, we do often create work that’s incremental to their day job.
One of the companies I cover is soon to be looking for a new IR dude, since the old IR dude got promoted. I’d like to throw my hat in the ring.
^i also saw an top IR guy get promoted to cfo recently. i got a buddy who is in ir for a top bb. harvard background. econ. you make a bit over six figs. but there is a glass ceiling. ie your pay is not a function of your work ethic, and it requires a ton of work ethic. like 15 hr shift work ethic.
IR is a pretty sweet gig - def a consideration for later in life/when you burn out.
The cfo at my company also got promoted from IR
I’ve actually never heard of an IR to CFO move
It’s pretty fun, I thought.
Make presentations, fly around the world talking to people, tell some bullshit stories, drink some wine on the company card, raise some money, and keep people who already gave you money quiet.
^This. It gets really annoying…although if it is one of our hot IR chicks (~75% are) I’m too nice about it so they keep asking and I keep giving.
In IR, your job is to present the company in the best possible light so that no matter what the stock price is, it’s always a buy. If you’re successful at doing this, it keeps the cost of capital low, which is what management wants.
Unfortunately, the reality is that sometimes the stock price really is too high and you have to justify why it is too low. As a result, the options are 1) tell the truth and tick off your bosses, 2) lie cleverly so that you’re not obviously lying, 3) make arguments that don’t really hold up to scrutiny and act like you’re too dumb to know it. For obvious reasons, #1 is not a very popular choice, so you get to choose between sounding smarmy or dumb.
I think the reason IR doesn’t get a lot of love here is that many people think it’s just a sales job and not an analysis job.
That said, if you like shooting the breeze with people and don’t mind defending things that aren’t always defensible, it’s not necessarily a bad gig.
I’m not sure I agree with this. We viewed our job as closing any valuation gaps that may be present - that is, any differences in what management thought we were worth vs. what we were priced at. Sometimes that included tempering management’s expectations, since management teams can be overly optimistic about themselves. Sometimes, it involved countering someone’s pessimism about us. Either way, we were tried to be as honest and open as we could be - whether that was with good news or bad.
Could be. I’ve not been an IR person, so your experience trumps mine. But I imagine that there’s still a lot of pressure to paint rosy views for company shareholders and potential shareholders. I’d imagine that it’s understood that one can’t be fully optimistic 100% of the time. But presumably it depends on senior management’s willingness to face bad news or not. In my experience of managements, that’s something that varies a lot - some can handle it, others can’t, and perhaps that’s a key point to consider in any potential IR job.
When I wrote my first post, I had not considered that a good IR person would need to “manage upwards” to keep management’s views from being excessively optimistic, but that’s a good point, and clearly a good IR person would need to do that and do that well.
In my own work in varied capacities, it is true that often times the way to be optimistic in the face of difficult data is to concentrate and/or focus on the things that can be read well.
You would think, but not my old IR boss. His whole game was to be unrealistically optimistic on the situation, always no matter the situation. I tried to point out to him that throwing in some honesty with the lies makes it more believable. Since he didn’t get that I played that role for him.
Haha, seen all this happen and can confirm #1 is unpopular, yet underrated.
IR seems like a pretty sweet gig to me. Front office, client facing role with relatively low stress and nice hours. Main downside being a lot of travel I would say. You see a lot of former investment personnel move into IR after a few years for work/life balance reasons.
Disclaimer: I’ve never worked in IR so just basing the above on my own dealings with client relations staff.
Depends how you see it; hanging out drinking on the company card with a couple half-naked bar girls on your lap might not be a downside to some…
Lol… sounds like a good way to lose your IR job 
Dsapo covered a lot of the key points in his first post. In IR communication is huge, and sometimes having an undergrad in communications actually carries some weight, which is probably one reason why the IR gigs don’t receive as much love as an IB or PE role.
It also seems like this forum is heavily weighted toward people who work in, or aspire to work in, investment management type roles. And the top dogs are typically managing directors, where as an IR gig is more aligned with corporate finance, and could lead to a CFO role. Headhunters target CFOs who have IR experience, its a signal that the potential CFO has experience working with investors and understands how to answer their questions.
IMO it really depends on what type of career you are interested in pursuing. How much modeling do you want to do every day? (IR you will work less in excel, and more on press releases and working with investors)
^ This post definitely makes me want to move to IR. It sounds great. Basically the intangible side of finance
I know a few people going this route. Different backgrounds, different companies, totally different opportunities. I would suggest it is very much dependent on a company: high profilers in BBs and Fortune 500, and simple marketing guys in SMEs. I imagine the latter is not really what you are looking for, and the former is now what you will be considered for.