"So where are we going to travel to on the roadshow?" - that's usually one of the first questions a prospective IPO issuer will ask bankers pitching to lead its flotation.
The idea of visiting the world's main financial centres over just a couple of weeks might seem exciting. Chief executives and their teams rack up thousands of miles flying first or business class, and meet portfolio managers after breakfast at the Four Seasons or Mandarin Oriental. Sounds glamorous? It's anything but.
Management will only travel to New York and Boston if the deal is aimed at large, US institutional investors. Failing this, the trip will remain confined to Asia and Europe. For smaller IPOs, most of the demand will normally come from Hong Kong and Singapore only - so the bankers involved may decide to skip the European leg altogether, or to limit it to just one or two cities, starting with London.
Most roadshows include events in the main financial hubs, but lesser known cities may also be visited to accommodate investors that specialise in a particular industry sector, and whose involvement adds considerable value to the share register.
To maximise time, a roadshow commonly follows the sun - it will start in Asia and end in the United States, where the pricing meeting will often be held. Two teams may travel simultaneously to boost coverage of investors. On occasion, and especially when multiple bookrunners are appointed, agencies are used to handle the logistics of a complex schedule that changes at short notice to respond to demands from institutional accounts.
An IPO roadshow typically spans two weeks, and is built around three types of meetings. There are the large, theatre-style presentations, held in ballrooms of business hotels, and where investors enjoy a sit-down lunch while management talks.
