'Speed investing' aims to sow seeds of rewarding business relationships

Investors and companies meet in a new twist on the dating game. By Stephen Foley
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If you are a restless fund manager looking for a passionate affair with a hot stock, or a corporate manager who just wants to settle down with a shareholder that truly understands you, there is a potential new solution.

The age-old dating game between companies and potential investors has always been fraught with awkwardness and disappointment, and in today's environment it is especially bewildering, now that upstart hedge funds are competing with traditional investors for the affections of more public companies than ever in a fast-globalising world.

Which is why, in a twist on the phenomenon of speed dating, Dresdner Kleinwort, the German brokerage, has been pioneering a new concept in investor relations: speed investing.

Ten companies meet 10 investors, they get 20 minutes to chat, then Dresdner matches those that ticked each other, and organises a longer date. A number of pilot events in London have been heralded a success, and the project was launched in New York this week for a string of UK and European companies interested in reaching out to investors on this side of the Atlantic.

Among the UK companies taking part were Aggreko, the generator leasing business, Home Retail Group, owner of Homebase and Argos, the drinks giant Diageo, BP, the fund management group St James's Place Capital, and Ultra Electronic, a mid-cap manufacturer. On the other side, a range of traditional fund managers and hedge funds – from Morgan Stanley to Paulson & Co, the hedge fund that shot to prominence by correctly betting on the collapse of the US mortgage market.

The name "speed investing" is now being trademarked by Dresdner, says Nick Seaward, head of equity liaison, who created the project. The idea first came to him in 2004 after reading a piece of research from Dresdner's asset allocation strategist at the time, Albert Edwards, who in his trademark personal style was making references to his own experience of speed dating.

"I'm not being bashful, but I didn't know anything about speed dating," says Mr Seaward. "I looked it up on Wikipedia. It was clear that there were lots of aspects that were applicable to roadshowing and the whole business of investor relations. There are limited slots for one-on-one meetings, which normally last an hour, and it has always been my opinion that companies could have said what they needed to say in 20 minutes."

Camilo McAllister, an investor relations officer at BP, said that different companies will have achieved different things from the event, whether it be raising a low profile in the US – not something BP has a problem with – or finding investors with whom they may not normally deal.

For BP, he said, "the generalist investor might ask you to name the two things that make your company better than the others – and that's not a question you usually get, because normally you are meeting with oil industry specialists who do their own analysis and think they know."

For Dresdner, it is an opportunity to bring companies and investors together in the hope that any share buying might go through their own brokers, and also to deepen relationships on both sides. While brokers have traditionally been valued by fund managers mainly for their research and their skill in the market, surveys show providing access to companies is increasingly important to their clients.

Events like speed investing tick the access box for sure, and they also add a welcome element of surprise, according to Michael Alsalem of the hedge fund Kingdon Capital, who attended the event in midtown Manhattan.

"There is a real problem with selection bias," he said. "At other events, you are not necessarily meeting the companies that offer the best opportunities, you are only meeting the companies that you already think will be the best opportunities."

It is a sentiment echoed by Mr Seaward. "It's just the same as speed dating. You hope to meet the three pretty girls, and expect to have to have to tolerate the ugly ones, but sometimes the ones that you thought might be duds turn out to be gems."