skills/capital-markets-issuance/references/investor-targeting.md

# Investor targeting guidance

Use this reference for investor/lender targeting, anchor strategy, roadshow prioritization, wall-crossing plans, and allocation thinking.

## Table Of Contents

- [Principle](#principle)
- [Investor segmentation](#investor-segmentation)
- [Required target fields](#required-target-fields)
- [Tiering logic](#tiering-logic)
- [Buyer psychology by security](#buyer-psychology-by-security)
- [Output format](#output-format)
- [MD-level guidance](#md-level-guidance)

## Principle
A target list is not a list of large investors. It is a prioritized view of who is likely to buy this specific security, at this size and price, for this use of proceeds, in this market window.

## Investor segmentation

### ECM
- existing top holders;
- long-only growth, value, garp, income, small/mid-cap, sector specialists;
- crossover investors;
- hedge funds and event-driven funds;
- strategic investors, sovereign wealth, family offices;
- retail/wealth channels where relevant.

### DCM
- investment-grade funds;
- high-yield funds;
- loan funds and clo managers;
- private credit/direct lenders;
- insurance companies;
- pension funds;
- banks;
- structured credit investors;
- distressed/special situations investors;
- regional investor bases.

### Convertibles/hybrids
- convertible arbitrage funds;
- outright convertible buyers;
- equity-linked specialists;
- long-only crossover accounts;
- preferred/hybrid income funds;
- existing equity holders willing to buy equity-linked securities.

## Required target fields
For each material investor/lender, include:
- name;
- investor type;
- tier;
- likely appetite;
- current holding/exposure if known;
- relevant prior deal participation if known;
- mandate fit;
- estimated capacity where supportable;
- relationship owner or coverage note if known;
- expected objections;
- recommended outreach message;
- wall-crossing requirement or sensitivity;
- next action.

## Tiering logic

### Tier 1: anchor candidates
Can validate the transaction, lead price discovery, or absorb a large allocation.

Look for:
- existing conviction;
- mandate fit;
- capacity;
- prior participation in similar deals;
- relationship strength;
- tolerance for instrument/structure.

### Tier 2: core buyers
Likely to participate if terms are reasonable.

Look for:
- sector/security fit;
- comparable holdings;
- normal allocation behavior;
- moderate price sensitivity.

### Tier 3: incremental buyers
Helpful for book depth but unlikely to lead.

Look for:
- price-sensitive demand;
- tactical or relative-value motivation;
- smaller expected allocation.

### Tier 4: education targets
Potential long-term buyers requiring story work.

Look for:
- new mandate fit;
- low familiarity;
- need for management access.

### Avoid/deprioritize
Investors likely to harm execution or waste management time.

Examples:
- investors outside mandate;
- conflicted accounts;
- excessive price sensitivity;
- likely short-term flipping;
- poor relationship or prior negative feedback;
- investors that raise mnpi/wall-crossing concerns without adequate controls.

## Buyer psychology by security

### Common equity
Investors care about:
- dilution versus value creation;
- use of proceeds;
- growth and revisions;
- valuation support;
- management credibility;
- future issuance risk;
- liquidity and ownership overhang.

### Debt
Investors care about:
- downside protection;
- leverage and coverage;
- liquidity and maturity runway;
- covenant protections;
- rating stability;
- use of proceeds;
- asset coverage and fcf.

### Convertibles
Investors care about:
- volatility;
- equity upside;
- downside bond floor;
- coupon/conversion premium;
- borrow and hedge feasibility;
- dilution controls.

### Private credit
Lenders care about:
- certainty of cash flow;
- collateral;
- covenants;
- sponsor support;
- documentation;
- downside case;
- exit/refinancing path.

## Output format
Use a table plus narrative.

| Tier | Investor | Type | Why likely | Expected objection | Outreach angle | Next action |
|---|---|---|---|---|---|---|

Then add:
- anchor strategy;
- order of outreach;
- who should be wall-crossed;
- accounts to avoid initially;
- allocation/book-quality considerations;
- investor q&a themes.

## MD-level guidance
- Lead with existing holders for public equity unless they are tapped out, opposed, or structurally unable to buy.
- Do not let fast-money demand set the tone before anchors are tested.
- For debt, separate real-money long-term demand from trading-account demand.
- For private credit, prioritize certainty, hold size, documentation flexibility, and relationship value, not just headline price.
- Investor objections should shape transaction structure and messaging, not appear only as a risk list.