Cartica was the first overseas institutional investor of any size in Grana y Montero and at the time it had no investor relations department. According to Lubrano, only around three to four analysts covered the company.
“Their idea of transparency was that if anyone wants to know they can come across the street in Lima. Though they had an inkling that we were going to attract international interest, as on each page on the website there was a little Union Jack, where you were supposed to click to get the English version, but they never developed it.”
The firm’s website was designed for customers and not investors. “There was nothing for overseas analysts to analyse,” says Lubrano.
It should be noted the ‘crossing the street’ in Lima is not that simplistic. It is a little known fact that Lima has the second largest population of any city in Latin America at 8.8 million, making it bigger than other high profile cities such as Buenos Aires, Rio de Janeiro, Mexico City and Santiago. Only Sao Paulo is bigger.
Lubrano’s regular visits to Lima to discuss how the company was missing out were not always welcome. “I would show how companies of their size could be disclosed and why it would benefit them and put up their share prices,” he says. “I was annoying a lot of the time.”
Through Cartica’s influence the firm sold off non-core assets such as shopping malls, encouraged a younger CEO to take over and brought in an investor relations department. Cartica exited the company in 2012 and “made a lot of money”.
Grana y Montero listed on the New York Stock Exchange in 2013 and is now spreading its footprint across South America. Its website is now a model of transparency and contains on its homepage the mission statement “To be recognised as the most reliable engineering and infrastructure service group in Latin America.”
