Thinking of a career in corporate investor relations? Here’s my story
Jack Riehemann, CFA, is Head of International Investor Relations at Robinhood Markets in New York.
In this article, he shares his personal career journey to becoming an investor relations (IR) manager, and the skills he recommends aspiring IR professional to develop.
Jack shared his career experience as part of the CFA® Program Career Webinar Series, in which CFA® Charterholders detail their professional journeys, his responsibilities and the essential skills and attributes he believes are critical for success in investor relations.
Corporate Investor Relations (IR) professionals serve as a vital bridge between a public company and its investors. They manage relationships across the buy-side (institutional investors who purchase the company’s securities) and the sell-side (analysts who publish research on those securities). It’s a specialized role, often filled by former equity research analysts who previously covered the sector and bring deep industry knowledge to the position.
What I like about this role
Most of what I'm doing today involves leading our global institutional investor relationships. That said, I am also heavily involved in the earnings and disclosure processes. A core part of my role is understanding what investors and stakeholders are looking for and bringing that back to the leadership team to inform the business strategy.
The IR function is incredibly strategic, which I love. It’s a finance role that has a great blend of high visibility with senior leaders -- including the C-suite -- regardless of what level you are. For example, analysts on my team are getting in front of the CFO, which is rare so early in your career. It also gives you the opportunity to learn about the entirety of the business. In IR, you need to have a broad understanding of everything that’s happening across the business, from both a strategic and financial perspective, because if you're having a conversation with an investor you have no idea what they're going to ask you. So, you have to make sure that you're well equipped to answer anything and think on your feet.
Lastly, I think IR is one of the few roles in finance that really has a heavy social element to it. You're frequently going to events with investors and research analysts, and I really enjoy that.
Within all of this, as your business is evolving and you're delivering on new initiatives, you're continuing to learn. It keeps work from being redundant – which is important to me.
What it takes to prepare for an earnings call
A lot of our lives revolve around a quarterly cadence. The first month of the quarter is typically what's called a “quiet” period, which is when we are preparing for earnings for the prior quarter and we're not speaking to investors until earnings are released.
The earnings process itself involves producing a lot of materials: the press release, 10-Qs and 10-Ks (mandatory US regulatory filings), our earnings presentation and Excel supplement, and the prepared remarks for the CEO and CFO. These are thorough amounts of disclosure that our team works with a number of teams cross functionally to produce and then ultimately release to the public.
But I think another big piece that people don't often see is preparing senior management for the Q&A portion of the earnings call. A big part of our job as IR professionals is to say “okay, what have we been seeing in the market? What are investors talking to us about? And how can that inform what questions we'll anticipate from the research analysts on the call?” And importantly, this prepares us and the management team for the full quarter ahead, not just the call. After we report earnings, we market with investors for a few months before the quarter ends and we are right back into quiet period again.
Beyond the earnings call: Engaging investors all-year round
After earnings, we begin engaging with investors for the remainder of the quarter. In addition to individual meetings, we participate in roadshows and conferences hosted by research analysts. These events are opportunities to meet with institutional investors and analysts, and help them build confidence in the company and its strategy. Outside of earnings, engaging with investors takes up the majority of my time.
Importantly, many companies also have some form of intra-quarter reporting. This helps analysts build and maintain their financial model, and tends to limit the amount of quarter-to-quarter volatility in your stock. Our team leads the monthly reporting of our key business drivers, for example.
We also put on an ‘Investor Day” event every few years as a way for us to take a step back and discuss long-term strategy with the investment community. This helps long-term investors build confidence to hold a position in our stock for several years, if not a decade or more.
How to enhance disclosure to work effectively with analysts
When there’s limited disclosure from a company, there's no way that analysts can truly understand what's going on in the business, and that can impact how they model company performance. So, we proactively work with investors and research analysts to understand how they model our business.
Once you understand that, there are two things you can do. You can say, “okay, now we know what they want to put in their models so we can better disclose that information”, or you can say, “we don't think they're modeling the business correctly, let's help them understand how to do that more accurately, and then produce disclosures that meet their needs.”
It’s about understanding what the ‘street’ is looking for, and really pushing forward to ensure that the outside world understands your strategy and how to value your business.
My career journey: From financial planning to IR
Several years ago, I was working at LPL Financial, another large broker-dealer, in Corporate Financial Planning and Analysis. In that role, I was doing a lot of cross-functional work with IR. The strategic nature and the high visibility of IR was attractive to me. So, I started telling my boss that any time there's involvement with IR, I want to be the lead on it. I started to build a good relationship with our Head of Investor Relations, and ultimately, they needed a Senior Analyst on their team. I took a lateral move at the time to join that team.
I eventually left LPL for a role in corporate strategy at another wealth manager. But because I had built good relationships at LPL, when their head of IR went to Robinhood, he recruited me to be his number two and I have been there for three years since.
Top skills to have for Corporate IR professionals
A strong base of general corporate finance knowledge is key. We get a lot of comparisons in the IR world to communications, but I think the key difference is, we are the subject matter experts on the financials of the company. So having that ability to really understand and communicate financial information is key.
Pairing that with a strategic mindset brings you to the next level. Being able to understand the financial drivers of the business in depth, but explaining them concisely and clearly is a challenging but important skill. And when you can tie that back to the business strategy, it helps keep the investment community engaged and interested in investing in our company.
How the CFA Program prepared me for this role
The CFA® charter makes your resume stand out, but it really is all about the knowledge that you learn. I think the CFA Program does a good job at making sure you understand the curriculum through the rigor of testing.
For example, while I am not an accountant, I have a deep knowledge of financial reporting, and I know how to apply it in my day-to-day work because of what I learned in the CFA Program. And that helped me quickly understand the financial picture of the company to succeed in the role.
Conclusion
If you're looking to move into a Corporate IR role, I think it is important to do your research. I know it sounds simple, but I cannot tell you how many times I've asked right off the bat in an interview, “tell me how Robinhood makes money”, and people just kind of stall. It shouldn't be a differentiator, but it is. If someone can clearly walk you through the drivers of the business and tell you how that converts to revenue, that's the first thing I look for in an interview.
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