Case Study: Hatteras Financial Corp.

3288 Robinhood Road
Suite 100
Winston Salem, NC , 27106
United States
Phone: 1-336-7609347

Company Profile

Company : Hatteras Financial Corp.
Industry : Mortgage REITs
Headquarters : Winston-Salem, NC
Ticker Symbol : HTS
Exchange : NYSE
The Challenge:

When Hatteras Financial Corp. (NYSE: HTS) debuted on the New York Stock Exchange April 30, 2008, the company was just a few months old and the smallest of a handful of publicly traded mortgage REITs. It was also up against one dominant player, which by market capitalization was nearly eight times as large as the No. 2 competitor.

Hatteras, an externally managed mortgage REIT, was formed in November 2007 to invest in adjustable-rate and hybrid adjustable-rate single-family residential mortgage pass-through securities issued or guaranteed by U.S Government agencies or U.S. Government-sponsored entities, such as Fannie Mae (FNMA), Freddie Mac (FHLMC), or Ginnie Mae (GNMA). From the outset as a public company, Hatteras wanted to distinguish itself from its peers by setting the industry’s standard for disclosure practices and transparency with investors.

To achieve this goal, the company needed high-quality consulting expertise to help it communicate its strategy to investors with clarity and open disclosure. An effective investor relations campaign would increase the company’s standing among investors, support the company’s share price, and pave the way for future growth.

The CCG Strategy & Implementation:

Based on CCG’s successful experience helping newly public companies establish best practice and build credibility, the agency in partnership with senior management developed an IR campaign that enabled Hatteras to achieve its goals and enhance its rapport with retail and institutional investors, despite uncertainty in the economic environment.

CCG advised Hatteras’ management as it defined best practices, creating high-quality disclosure. In several cases, the agency helped establish Hatteras as the clear IR leader in the mortgage REIT space. Our consultative approach guided Hatteras through each aspect of its first year as a public company.

CCG then set about building relationships with potential supporters of the company’s stock, including institutional investors and sell-side analysts who cover the mortgage REIT space. CCG advised the client on meetings that best fit Hatteras’ investor targets, as it received numerous invitations to participate in conferences and non-deal road shows by various investment banks. CCG’s counsel helped the client expand its presence on Wall Street in a manner that reflected Hatteras’ image as the best practice leader in mortgage REITs.

The Measurable Results:

Hatteras has attracted high-quality institutional investors and investment analysts and an increased standing in the investment community as a result of a carefully executed strategy that has resulted in:

  • Greater transparency and frequency of press releases and communications
  • Improved performance on average relative to its peers
  • Exposure to top-tier financial news outlets, such as Barron’s
  • The initiation of coverage by 11 equity research analysts
  • The addition of over 100 new investment funds that have taken a position

Perhaps more significantly, under extremely challenging market conditions, Hatteras has been able to tap the equity capital markets on two separate occasions since its initial IPO in 2008, raising in excess of $300 million.

For more information, contact Mark Collinson, Senior Partner, at (310) 954-1343 or mark.collinson@ccgir.com.
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