Companies state their desire to raise funds. Investors state their willingness to invest. At the same time, the International Business Brokers Association statistics show only 10% of closed deals. So what prevents successful deals and, most importantly, what can help business and capital establish an effective dialogue?
In August 2018, Axilliem Capital Deal Makers became an authorized partner of Closir (London) international platform in Ukraine. Closir is the financial and technological solution, which provides companies and investors with a conflict-free direct corporate access to one another. As a strategic tool that dictates the future in building investor relations, Closir platform opens broad prospects for national business to enter the international capital market.
Closir’s authorized partner in Ukraine, managing partner of Axilliem Capital Deal Makers, Anna Reznichenko, told Destinations how to go beyond broker networks, have a whole investment network at hand and reach investors beyond your focus.
How have recent changes in the capital market affected investment activity?
Modern technologies and new regulatory rules in finance significantly change the culture and approach to investor relations, as well as ways of raising capital. Thus, in the light of the recently introduced MiFID II rules, an investor is to independently acquire analytical information about the company it considers for investing. This prompts the investor to limit the range of its interests and be much more selective.
Thus, investors’ low awareness, on the one hand, and companies’ unpreparedness, on the other hand, only widen the gap between the real capital and the business, while reducing investment activity. Therefore, our companies need to become more proactive in targeting and raising investments.
What requirements must a business meet?
Many companies entering the international capital market, unfortunately, focus on a short-term goal of successfully completing a transaction, and forget that it is very important to consistently work with the investor. By showing interest in emerging markets, investors place particular emphasis on internal teams. Much remains to be done in the area of investor relations and corporate governance standards.
Thus, factors like the lack of transformation of the company, the absence of an investors’ page on the company’s website or a page without extensive information, the lack of the full range of IR tools, including corporate access and people responsible for the information disclosure, mean that the company doesn’t have a long-term investment strategy and isn’t ready for open, consistent communication.
Before selling a company or raising capital, the owners evaluate the potential of their business, follow the program of accelerated business growth and qualitatively prepare both the company and the offers to investors, reflecting not only the current position of the business, but also a strong strategy of its development in the market with a convincing equity story. This strategy is based on the best cases.
Tell us more about the AI technology itself. Which companies in Ukraine have this corporate access now?
Closir AI-technology of corporate access was initiated by Michael Chojnacki — ex-Vice President, Bank of New York Mellon. It is aimed at connecting the emerging market companies with institutional investors. The platform allows targeting a pool of potential investors, organizing direct meetings, road shows and online conferences. The tool is used by large investors, including pension funds, hedge and mutual funds located in the financial hubs of Europe, the USA and Asia, as well as leading public companies in emerging markets.
Natural and Liquefied Petroleum Gas PLC is the first company in the Ukrainian market to implement Closir AI-technology. By using Closir’s IR strategic tool and meeting the requirements of the capital market with the best international practices, N&LPG is on top along other successful market leaders that also use Closir technology solutions in building investor relations and capital raising activity.
What is so special about Closir and how can it help the Ukrainian companies?
Closir provides a conflict-free direct corporate access to investors and companies. The proposed solution expands the circle of investors and opens up broad prospects for the national business to enter the international capital market. The corporate event calendar, which is provided by Closir technology, contributes to the implementation of disclosure rules and is a promptly-updating system for monitoring expected events. The corporate calendar integrates into the investors’ calendar, allowing them to directly schedule meetings with the management or confirm their participation in corporate events in one click.
Closir’s AI-technology sets the future in building investor relations, allowing companies to go beyond broker networks and have their investment universe at hand, reaching investors outside of their focus.
What is your role and goal in this process?
Most Ukrainian companies do not dare to transform their companies, because they do not see the interest of investors, and investors do not see that companies are ready for a deal. Our goal is to get rid of this gap and give confidence to both sides. Our main task is to support companies at all stages of attracting investments and provide direct access to financing. The practical case of ours that inspires Ukrainian businesses today is N&LPG. Even before going public, the company existed as a public enterprise, where an IPO is not a one-time transaction.
Having done the impossible, in March 2018 N&LPG interrupted the five-year pause of Ukrainian IPOs and, overcoming obstacles in the midst of constant changes, fulfilled the requirements of the capital market. In the entire history of Ukraine, no company has previously dared to go through the process of obtaining approval by the German regulator BaFin directly. N&LPG made an IPO possible in 6 months. With its unconventional approach, the N&LPG team has broken stereotypes and prejudices in the market, paving the way for Ukrainian business to the international capital market.
Their success is based on the pro-active position of the internal team and, most importantly, the presence of a long-term strategy of relations with investors. Inspiring others N&LPG had a significant impact on the culture and approach to investor relations, paving the way for raising capital for ambitious companies. Now the Ukrainian companies’ entering the international capital markets seems inevitable. We are ready to multiply successful achievements.
Axilliem is global network of deal-makers that provides companies with access to capital, skills and networking using innovative digital technologies (fintech).
Closir is a technology platform that connects emerging market companies with institutional investors, allowing them to target a pool of potential investors, organize direct meetings, road shows and online conferences. The tool is used by large investors, including pension funds, hedge and mutual funds located in the financial hubs of Europe, the USA and Asia, as well as leading public companies in emerging markets.
Natural and Liquefied Petroleum Gas PLC is a leading gas utility holding company that consolidates several strategic Ukrainian gas infrastructure assets. N&LPG is the first company in the Ukrainian market which is already using the Closir platform in building relations with investors.