Mastering Investor Trust: Lessons from a Global IR Veteran

Insights from Ricardo Jiménez Hernández, with 30+ years of experience building trust and driving investor engagement worldwide.

At LPblueprint.com, we're committed to taking our insights to the next level by delivering interviews and articles that elevate the way you approach investor relations and fund management.

To broaden the scope of our newsletter and provide a global perspective, I reached out to international IR experts—and Ricardo Jiménez Hernández, from Ferrovial, stood out as one of the most insightful voices in the field. His decades of experience navigating market transformations and building investor trust make this a must-read for anyone in the industry.

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Here’s what Limited Partners (LPs) and General Partners (GPs) will learn from the interview:

1. Evolution of IR in Modern Markets: You’ll understand how investor relations has transformed over the last three decades with globalization, technological advances, and regulatory changes like MiFID II. (If you do not know European regulatory frameworks, it’s very hard to raise capital in Europe)

2. Proactive Investor Engagement: Learn why investors won’t come to you and how a proactive approach—such as well-planned roadshows and transparent communication—is essential for maintaining visibility in competitive capital markets.

3. Lessons from IPOs and Market Crises: Discover strategies used by companies like Ferrovial to rebuild investor trust after setbacks, including detailed action plans, transparency, and active market communication.

4. Building Investor Confidence: Learn how investor confidence is a greater asset than share price and gain actionable tips for fostering this confidence, from pre-IPO planning to long-term trust-building.

5. Adapting to Change: Explore how IR teams need to adapt to shifting stakeholder expectations, increased ESG demands, and the challenges of balancing speed in decision-making with industrial timelines.

6. Transparency as a Strategy: Find out how transparency in challenging times and an open dialogue with investors, even when addressing mistakes, can enhance credibility and build resilience.

7. Practical Insights for Smaller Firms: Gain specific advice for smaller and mid-cap companies on how to stand out to institutional investors despite reduced analyst coverage and limited resources.

1. You got into investor relations from Forex in the early 1990s. This was right as the internet was coming on line. Right around 2000 you came to Ferrovial - how has IR changed over those 3 decades, both in Europe and globally?

   IR has changed as financial markets have evolved. In Europe, the adoption of the Euro in 1999 meant that domestic investors could invest in other European markets without exchange rate risk. Technological changes such as the advent of the internet have also greatly facilitated the international movement of capital flows. Deregulation in many countries and reduced restrictions on international investment, for example in the case of pension funds, have helped. All these changes have allowed many more companies of all sizes to access capital markets.

   In IR, the basics remain the same: investors are not going to come looking for you. The scarce resource for investors is time, not information, nor the number of companies to invest in.

   [Ed’s Note: In Europe, small-cap companies often have lower free float—this means a smaller percentage of their shares are available for public trading—because a significant portion of shares tends to be held by founding families, governments, or long-term strategic investors, limiting market liquidity and making it harder for these companies to attract passive investment compared to the U.S., where shares are more widely distributed among public investors. Just in case you were wondering why.]

   In the last 15 years with the strong growth of passive management, this problem has become more important, especially for small cap companies and especially with very little free float, which is very common in Europe. In such a scenario, the need to be more proactive is key to exist in the minds of investors.

   The introduction of MiFID II in Europe and the need to break out separately the fees paid for brokerage and research has greatly reduced the coverage of small and medium sized companies. In addition, there are generally no high growth companies (tech, etc.) in Europe. It’s therefore very difficult to attract the attention of international investors. If companies do not move, either with virtual meetings or travel, they disappear from the radar of investors, if they were ever on that radar.

   The huge legislative development of ESG issues, especially in Europe, has taken a lot of time and resources from companies and IR departments.

   On the other hand, the type of documents or information provided by companies should be much more direct, highlighting the main messages and most of the data in annexes that are understandable. We have to think that the first input of results is likely to be read by investors on a mobile phone with a small screen.

   I think it is still important for IR departments and company directors to consider investors as one of the most important customers of their companies. I'm not sure they always have that attitude.

   In the US I think companies have seen their international shareholders grow significantly, which opens up the question of where are my investors and the need to be more present with investors who historically did not make up a large part of their shareholder base

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   Below is the full, in-depth interview—over 5,000 words of valuable insights! 🎯

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