Investor Relations: The Best Path to Getting a Life, Securing Stability and a Solid Paycheck, and Going Benefit Hopping on Friday Nights?

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Investor Relations JobsBored of working 100 hour weeks? About to break up with your significant other because he / she barely sees you?

One solution is to quit and become a ski bum.

Another is to go work at a normal company and get better hours in corporate development, corporate finance, and yes, also Investor Relations – one area that has generated lots of comments and questions over the years.

Today’s interviewee is an Investor Relations Manager at a Fortune 500 company in Asia – and he’s worked in similar roles at another company in the region over the past 6 years.

Here’s what we convinced him to share with you:

  • How to break into Investor Relations
  • What you do in IR and how it’s different from investment banking and corporate finance
  • The structure and hierarchy within IR and the different roles available
  • Interview questions you might encounter in your IR interviews
  • Exit opportunities if you decide you want to go back to those 100-hour workweeks

Pitching to Investors: It’s All About the Story

Q: So how’d you get started? Did you know you wanted to do Investor Relations since you were a kid?

A: Nope, it was much more random than that.

After graduating from a university in the UK with a major in IT and a minor in Economics, I began my career at a financial software firm as a Systems Analyst for a little over a year. And then I found my way into fund management and worked for a couple of leading global banking institutions, where I picked up my financial analysis skills.

After a few years at the financial institutions, I was a bit tired of the work and met up with a headhunter friend who suggested that I try working in the corporate world as an Investor Relations Manager for a mid-sized local company.

Q: That seems like a pretty random recommendation – IT to fund management to… IR?

What made her think that you were cut out for Investor Relations?

A: I think she realized that I was more of a “people person” and didn’t want to be crunching numbers in spreadsheets all day. I didn’t mind that as part of the job, but I wanted to do more than that – the long(ish) hours also didn’t help.

I worked in IR at the local company for a few years, and then moved over to a much bigger multinational firm to get more responsibility and higher pay – plus, I gained the opportunity to work with senior management, bigger banks, and institutional investors worldwide.

Investor Relations – Defined

Q: OK, so more exposure to executives, the buy-side, and more work outside of just number-crunching in Excel… sounds good so far.

What exactly do you do in Investor Relations at a normal company?

A: It depends on the level you’re at – just like with equity research, there’s less hierarchy than what you see in investment banking, but here are the 3 levels:

  • Business Analyst / Assistant IR Manager – Normally, a few years of experience in a finance-related field are required for this role.
  • IR Manager – This requires at least 5-6 years of experience.
  • IR Director – This takes more like 10 years of experience, and you report to the CFO at this level.

At a smaller company, you might have only 1 or 2 people in the Investor Relations department, so the hierarchy is compressed.

Also note that only public companies (or companies about to go public) actually need an IR department – if and when private companies deal with investors, the CFO handles most of it.

The IR Manager and IR Director focus on speaking with institutional investors from major buy-side houses and also research analysts from investment banks – they try to tell our company’s “story” effectively and make investors and analysts excited about the company, while also being truthful and giving accurate information.

As a junior person on the team (Analyst or Assistant IR Manager), you’re charged with producing weekly and monthly reports, following the markets and seeing what analysts and investors are saying, and putting together summaries for the senior management to review.

We also help with drafting the language for earnings announcements and with annual and interim reports (semiannually in Asia and quarterly in the US).

In addition, we also speak with other divisions to understand the entire company’s latest operations and answer questions from investors and analysts that call us.

Sometimes, management asks us to help with special projects and find information in areas they need for business development, or to find market data that they may get asked about at presentations or on earnings calls.

Q: So it sounds like there’s a lot of overlap with Corporate Finance, Controllership, and Treasury roles?

A: Yes and no. At a really small firm, some of these functions might be combined and the same person might perform some or all of them.

The main difference is that corporate finance deals more with the company’s internal finances, while investor relations is more about communicating with the external investment community.

You still need to understand and interpret the financial statements, but you don’t need to know as much about accounting, valuation, or modeling as someone in a traditional corporate finance role. And you would not be the one actually creating the financial statements for the company.

Overall, I’d say 30% of the role involves financial skills while the remaining 70% requires solid communication and presentation skills. Certifications like the CFA/CPA might help a bit, but are not necessary for the role.

Q: So are there any “standalone” Investor Relations firms? Or do you only see it internally at public companies?

A: Yes, there are some 3rd-party firms that companies can “outsource” IR work to – one example in Asia is irasia.

However, these firms mostly host events for listed companies and post documents for them, so they wouldn’t necessarily do everything that you do internally at a large public firm.

Then there are groups such as IR Magazine that host events in many major international financial centers.

But, the bottom-line: if you want to be in IR, you’ll be working at a decently-sized public company in most cases.

A Day in the Life

Q: OK, thanks for clarifying. So what’s an average day in your life like?

A: I usually get in at 9 AM and leave at around 7 PM (about 50 hours per week on average). My hours are fairly regular and I rarely work weekends, except for when a “major unexpected event” happens over the weekend.

If that happens, I’ll need to go back to the office to meet with the IR Director and senior management to figure out what we’re going to tell investors on Monday.

A “major unexpected event” might be a rumor or a leak on corporate activities in the news, a major company announcement to be made, or anything else you can think of.

One other point specific to Asia: Hong Kong-listed companies do not provide forecasts and EPS guidance in the same way US companies do, so we need to look at how the results we’re about to announce compare to Bloomberg consensus estimates or to those of individual analysts… and if they’re off, we need to explain why in the Q&A document we release.

If it’s a “normal day,” I start off in the morning by scanning through news sources such as the Wall Street Journal, Financial Times, Bloomberg, local newspapers, and research analyst reports from various investment banks.

I then alert senior management if I find any important news that they need to be aware of, and send over a brief one page summary. I also circulate it to other Senior Managers for their information as well.

Intermittently during the day, I also look at things like our own share price movement, competitors’ share price movements, major M&A or capital markets deals, industrial news, strategic partnerships, and anything else going on outside our own firm that needs to be reported to management in a timely manner.

After that, my tasks vary by the day – they might include:

  • Accompanying the IR Director or senior management to meet with investors from a major asset management firm or hedge fund that owns a stake in us or is considering acquiring one.
  • Reviewing interim financial statements, scanning for numbers that investors or analysts might ask about, and preparing responses to distribute to management.
  • Drafting presentations given at annual meetings and sitting down with senior management to rehearse answers to expected questions. It’s almost like prepping a management team for a roadshow before an IPO – and the IR team is always involved with roadshow process as well.

Q: It sounds like those tasks could create conflicts of interest – how do you get around that?

It must be tempting to tell research analysts, senior management, and investors different stories depending on what they want to hear.

A: Yes, it does require a skill set to handle these situations.

In IR, you have to be very cautious of how and what you communicate to the “external world.” You have to tell everyone – analysts, management, and investors – the exact same message that senior management conveys to the investment community to avoid any inconsistencies.

Q: Great, thanks for explaining that.

So why did you transition from a smaller firm to a bigger company? Was it just because of the pay?

A: Part of it was the pay, yes. The other issue is that in smaller corporates, it’s usually a “one-man band” operation. I was involved in investor relations, public relations, as well as some business development given the lack of resources.

While I learned a lot in that role, I was underpaid for the effort I put in and I felt like moving to a larger firm with more of a dedicated IR role would be better for me in the long-term.

Breaking In… At All Levels

Q: What’s the recruiting process like for Investor Relations?

A: The recruiting process is straightforward. At our firm, candidates go through 2 rounds of interviews: one with HR and the other with the Director of IR.

An interview usually lasts one hour, and the first round with HR involves the standard behavioral questions. The second round with the Director of IR involves more in-depth questions specific to the job, such as:

  1. Have you had interaction with fund managers and research analysts in your previous jobs? You don’t “need” to have experience speaking with investors and analysts in most cases, but having such experience will definitely be a plus.
  2. Can you deal with deadlines under pressure? We look for candidates who perform well under pressure and can multi-task, because there are a fair number of “unexpected events” and it’s always a rush right around earnings season.
  3. Do you have experience analyzing financial statements? We need candidates who know how to analyze financial statements so they can prepare reports for management, and so they can prepare answers to expected questions from investors and analysts.
  4. Do you have a background in IR and/or PR? Having such background is not crucial, but it is a plus.
  5. Have you written any reports to clients before? How strong are your writing skills? Having solid communication skills is crucial in this role, particularly for the more senior roles, where your job consists of talking to people and writing correspondence all the time.

You may get technical questions on accounting, valuation, and interpreting the financial statements, but they generally won’t be as in-depth as in banking or PE interviews.

Q: What about how to “tell your story” in IR interviews?

A: It depends on your background, but if you’re coming from investment banking the short version of your story might go something like this:

“I went into banking to gain the best all-around financial / analytical skill set and work on large-scale deals… but on one deal I was staffed on, I saw firsthand how the management team and some of our own team wasn’t quite telling the company’s ‘story’ properly and pitching them effectively, which made it difficult to get investors interested because of [Describe Why]…

I had ideas for how to improve upon those, but as an analyst I couldn’t implement them directly. But it made me more interested in a role such as IR where you leverage both the analytical and communication skills, and I started speaking with more and more people in the industry and learning more about it – in the future I want to take on that role for companies in [Industry X], and this role is a great way to get there.”

You need to highlight a specific instance where you saw a way to improve the company’s story and to use it to attract more/better investors.

Q: What kinds of candidates are they looking for? Do IR groups even recruit undergrads or MBAs?

A: Generally, no – we focus on candidates with at least a few years of experience in finance-related roles.

That experience could be almost anything, from investment banking to equity research to corporate finance or previous IR experience.

But most large companies do not recruit brand-new graduates for these roles.

Pay, Culture, and What to Do When Your “Relations” Go Bad – Exit Opportunities!

Q: So what’s the culture in IR like? Is it more “intellectual” like what you see in equity research, or more like what you see in banking or S&T?

A: It’s probably most similar to corporate finance because it’s quite bureaucratic and there are many levels of management, depending on the size of the company.

So don’t expect quick decisions or quick advancement.

Q: You’ve mentioned a few times that the pay is lower and that you were underpaid in your own role – what should you expect for compensation in Investor Relations roles?

A: First, let me just state that I can only speak to pay in Hong Kong because that’s where I’ve worked before.

I am assuming it will be different in North America, Europe, and other places, partially because taxes are much lower in HK.

Here are the approximate ranges I’ve seen:

  • Assistant IR Manager – 20K+ HKD / month (roughly $30K USD per year)
  • IR Manager – 40K+ HKD / month (roughly $60K USD per year)
  • IR Director – 1 million HKD / year (roughly $130K USD per year)

Q: Really? I’m a little skeptical because those numbers sound very low based on a quick search I did on Glassdoor and a few other sites.

Any thoughts?

A: Yes, as I said, a lot of it depends on the size of the company and the region you’re in.

If you’re at a Fortune 500 company in the US, the pay range might be anywhere from $100K USD to $700K USD based on surveys like the one described here.

And in developed markets, you might start out at more like $60K+ per year, as in other entry-level finance roles; it really depends on the size of the company and the team.

But there is a definite discount to the compensation that you’d receive in other fields.

Sure, you can still make it to the $150 – $200K+ range, but you won’t do it in only a few years as you might in banking or PE.

Of course, the trade-off is that your lifestyle is more controlled and you’re dealing with far less stress.

Job stability is also higher because they’re not going to cut the IR department if earnings fall – in fact, that’s when they need you the most!

Q: What are the most common exit opportunities? Are you more limited because it’s a specialized skill set?

A: Other than climbing up the ladder in IR, candidates usually work for another corporate in their IR division in the same capacity, or get promoted along the way.

Candidates who are outstanding and recognized in their work might possibly be invited to join a smaller corporate as a financial controller or CFO.

Better yet, candidates can look for start-ups who are about to go public and assist them in their initial public offering process. However, these cases are relatively rare, and most candidates usually stay within their same firm in IR and exit opportunities can be limited, unlike in IB.

You can move from ECM or fund-raising type roles on the buy-side into IR, but it’s quite rare to do the reverse, though I’m sure people have done it before.

Here’s an interesting example of how someone gets into IR: take a look at Wen Hsin Tong, who moved from IB to IR to Executive Chairman of the Board at Foxconn.

Q: Thanks for explaining that one. Based on everything we discussed so far, who would fit in best with the group?

A: Someone who wants job stability, regular hours, and who wants to build relationships with the investment community and fit in with the corporate culture.

There’s also the prestige factor involved if you are working for a multinational corporate because you work with a team of high-caliber senior executives – even as a junior-level person, you’ll have significant access to executives, which is pretty rare in any job.

So if you like that type of opportunity and you really enjoy working with seasoned executives, IR could be a great fit for you.

Q: Great. Thanks for your insights and your time!

A: Anytime, enjoyed the chat!

About the Author

has worked in institutional sales, private banking, and investment banking in Hong Kong. When she's not working, she enjoys kiteboarding at exotic beaches, jumping off planes and bridges, and shark-diving.

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35 Comments to “Investor Relations: The Best Path to Getting a Life, Securing Stability and a Solid Paycheck, and Going Benefit Hopping on Friday Nights?”

Comments

  1. Senior going into Banking says

    Thank you! This was very insightful for someone who is considering going into IR. I really enjoy these interview series.

  2. Andrew says

    Thanks for this interview I currently work for an IR firm and always wondered about how my skills can be used in another field.

  3. ECMChick says

    Quick question – I am currently a 3rd year analyst in ECM at a bulge bracket bank. Im wondering how working in IR at a public company would differ from working in IR at a hedge fund. The opportunities headhunters keep throwing my way are with hedge funds.

    Thanks!

    • says

      Hmm good question – the main difference is that you spend more time with the LPs and answering questions about the fund’s performance vs. the interim reports that F500 companies spend time on. Also, there’s probably less hierarchy at hedge funds since most do not have the same level of resources that large companies do. I’ll see if we can do an interview on IR at a HF in the future.

      • M&I - Nicole says

        Adding to Brian’s comment, I suspect the compensation at a HF is probably higher and that the recruitment process is probably more intense for a HF IR role.

        • ECMChick says

          Thanks so much for the valuable intel. I am pursuing a few different avenues and was initially down and out that more traditional banking exit opportunities were not available to me. Feeling a bit better about things after reading this post. As an aside I have been reading since college – there’s no one who quite compares.

          • M&I - Nicole says

            Yes there are definitely other areas outside of traditional banking exit opportunities that you can explore. Its mostly about your network and willingness to go out of your comfort zone. Thanks for your support!

          • Adam says

            IR at an HF or PE firm would somewhat be the same as at a corporate – analyzing performance and presenting it to investors (i.e. the fund’s AUM), keeping track of what competitors are doing and reporting this to senior partners, etc. The place where’d you really diverge is that at a fund you’ll spend a lot of time on fundraising, which the fund will do every couple of years. At a corporate you’ll be involved in capital raisings yes, but some companies go years without going to the market, only borrowing from a commercial bank here and there.

          • Adam says

            One more thing – at a fund a big issue is retaining AUM – investors can pull out when they want (or at certain intervals, depending on the fund agreement). The IR person will play a big part in keeping investors from leaving.

            At a corporate, this isn’t an issue. Once the co. has the capital they don’t have to give it back (or just repay at maturity for debt, but not sooner). Yes the co. needs good IR to prevent shareholder/debtholder revolts, bad press, and to keep access to capital markets open, but the degree to which a company needs IR depends on the company. A very popular and successful co. can thumb its noise at investors, and those investors will still line up to invest (Apple is known to do this). This was true for hot fund managers also, before 2008, but not really any longer.

  4. Comms guy says

    Thanks for this, very helpful. In a similar vein, I’d love to learn about corporate communications or media relations positions at F500s or big banks — think Goldman’s Jake Siewert, or Facebook’s Mike Buckley

  5. B J says

    Quick question. I am a high school student in Canada, what can I begin learning in my offtime and in the summer to have a competitive edge in IB after graduating Univerisity with a BCOM in Accounting, Finance or MIS.

    • M&I - Nicole says

      I think you can gaining in-depth knowledge of financial modeling, the stock markets, how capital markets work, and perhaps start talking to people in the industry. If you’ve already been doing the above in your freshman year, you’ll be ahead of many people.

  6. Val says

    Thanks for the article.
    I work in the field of IR as an IR Manager in Europe (so in house)and I would like to add that there are more exit options:
    - Working for an IR/financial communication consultancy
    - Working for an investment bank in corporate broking team or roadshow team
    - Using your IR knowledge to work for an IR/communication recruitment consultant
    The good thing with IR is that is a very versatile role and there are a lot of transferable skills.

      • Adam says

        Just to add, on occasion IR people at corporates will move over to equity research, at least I’ve seen this happen several times in Asia.

        • Val says

          Maybe but in that case you would need to have some kind of accountancy qualification or equivalent (which is not always required in IR).

          • Adam says

            Accountancy qualification? No you don’t. The accounting knowledge needed in ER is not that heavy at all, a course or 2 is sufficient. Anyway, if the ER team likes an IR person and thinks he/she has sufficient analytic ability the team will seriously consider hiring him/her, regardless of any qualification or lack of.

    • K says

      Hi Val,

      Recently I have been interviewing for a F100 company in the IR department as a Financial analyst. I have been given these two projects as part of my interview process:

      As we speak with investors, it’s good to understand our competitors’ strengths and weakness in developing messages that resonate and stick. As such, these messages tend to have (but are not limited to) financial performance. Assess “ Competitor A” as a company and how you might suggest we talk about “Our Company” and “Competitor A” in the same discussion.

      Information flow is a continual challenge in IR. With analysts following the company and competitors, that’s potentially 1,000 analyst reports to review each quarter . . . and then there’s press coverage and blogs. Investors are data driven people, so outline your plan for ingesting, analyzing and leveraging data from a larger dynamic set of data sources. This is a Big Data challenge inside one position.

      Can you let me know what your ideas would be for these two?
      Thanks!

  7. Val says

    However, in terms of stability, if you want to work in house, make sure the company is not too small or vulnerable to a takeover. Happened to me twice and got made redundant.

  8. Tri Nguyen says

    Hi Brian

    Can you give more advise if ppl want to switch to IB/Corporate development from IR?

    Is it going to take a long time with lucks?

    Thank you

    • M&I - Nicole says

      Yes it may take some time and it isn’t a common move from IR to IB because IR doesn’t provide the necessary valuation experience IB requires

  9. K says

    Hi Nicole,

    Recently I have been interviewing for a F100 company in the IR department as a Financial analyst. I have been given these two projects as part of my interview process:

    As we speak with investors, it’s good to understand our competitors’ strengths and weakness in developing messages that resonate and stick. As such, these messages tend to have (but are not limited to) financial performance. Assess “ Competitor A” as a company and how you might suggest we talk about “Our Company” and “Competitor A” in the same discussion.

    Information flow is a continual challenge in IR. With analysts following the company and competitors, that’s potentially 1,000 analyst reports to review each quarter . . . and then there’s press coverage and blogs. Investors are data driven people, so outline your plan for ingesting, analyzing and leveraging data from a larger dynamic set of data sources. This is a Big Data challenge inside one position.

    Can you let me know what your ideas would be for these two?
    Thanks!

    • M&I - Nicole says

      Please see below for a few pointers:
      The first point – it is about your ability to understand your competitors and craft strong messages that represent your company.
      The second point – you need to be able to determine the news from the noise. Learn to distinguish data that is useful to your investors.

  10. Mark says

    As someone who is currently working for an IR team I can say that internships are available, however you might need to reach out to the team. If it is a specialty company, prove you know a decent amount in the field. And if anything, READ THE 10K AND LATEST 10Q. Prospectus and latest few 8-K’s cant hurt either. Very dynamic field with lots of work around earnings time. So far very enjoyable!

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