Fund management software has benefits for both fund managers and investors during annual meeting season

private equity annual meetingIf you are a firm in private equity, it is expected that your team holds an annual meeting for your fund managers and investors. It’s a time when you get to take a step back and see the results of a year’s worth of work (and investment). You get to celebrate victories, learn from defeats, and present your firm’s next year strategy.

However, it can also be a very stressful time. Fund managers prepare for annual meetings for months leading up to the event. On the other side, investors often end up scrambling at the last minute to collect a year’s worth of reports and try to make sense of it all. 

Fund managers and investors alike that use fund management software benefit significantly throughout the year—and particularly during annual meeting time.

Fund managers and investors alike that use fund management software benefit significantly throughout the year—and particularly during annual meeting time.

THE STANDARD PROCESS OF PREPPING FOR ANNUAL MEETINGS

It’s your annual meeting. The time of year when you get all of your investors together to feed them full of information (and food and booze). To most, it’s a necessary evil that requires months of preparation and some serious time away from your core business activities.

Everyone agrees that the idea of sitting through a 150-slide presentation is pretty painful. But the pain and suffering endured to create that PowerPoint is much worse! Often stretching out for months leading up to the annual meeting season. In the end, really all you’re doing is compiling an update about what your firm had been up to in the past year, and where your firm is looking to invest in the future.

If you’re using spreadsheets and calendars to track your activities, then your analysts are going to have to comb through a year’s worth of Excel rows and shared calendars (read 10 Reasons Why Excel for Fund Management Doesn’t Work) . Essentially to count up how many meetings you’ve had, how many calls you’ve had and with whom, and the number of companies you’ve invested in and their revenues or changes in revenues. This is a tedious process. But it’s also likely to be highly inaccurate due to human error. For fund managers who enlist the help of a capable fund management software system, the process can be made quite a bit easier and more efficient.

For fund managers who enlist the help of a capable fund management software system, the process can be made quite a bit easier and more efficient.

Good private equity fund management software is designed to, among other things, track and report on exactly the data that analysts are spending weeks or months gathering: what have you been up to in the past year? If you have the right system, getting this information for your annual meeting can be as easy as the click of a button.

We have several clients doing this reporting already. It may not make a 3-hour presentation any more comfortable to sit through, but I promise you it makes it a lot easier to put the presentation together!

Fund Management Software Improves Annual Meetings for Investors

As a Limited Partner, the most obvious benefit to using fund management software is the potential to significantly reduce the amount of prep work required to investment reportsattend the annual meeting.

Every diligent LP plans to arrive at the meeting, knowing what the manager’s portfolio looks like. However, without a regimented approach and significant effort, this plan usually results in a chaotic scramble that produces a half-baked summary. While this summary will remind you of the more notable recent events or pieces of information, it will never tell you what hundreds of pages of quarterly reports have explicitly (and not-so-explicitly) conveyed over the course of the year.

On the other hand, when you have detailed performance information stored in a fund or data management system, tracking each portfolio company becomes easier. In mere moments, you can see operational metrics and broader portfolio analytics. You already know what the manager will tell you during tomorrow’s annual meeting. You are one step ahead, ready to ask about the value drivers or the companies that have grown revenue or EBITDA most over the last year, for example, before you go to the annual meeting. Naturally, GP’s want diligent investors, so they’ll be impressed that you’re on top of things.

During the presentation, everyone else will be just learning about the high-performing portfolio companies that you already know about. By that time, anyone offering to co-invest is just extra noise to the GP. They all got the quarterly reports for the past three years, and no one has read them all. Ultimately, the reports are just words on paper, and the real value in those reports lies underneath all the words in the raw data. Using private equity fund management software, you can capture that data and are better equipped to analyze and understand it. Not only do you save yourself a ton of time, but you also provide your firm with a significant advantage because you’re already making sense of the data they’re reporting on. Demonstrating to a GP that you are this active and interested investor can earn you priority.

A final justification for fund management software for investors during annual meeting season is simply to make it easy to catch up on the prior year’s activities, including meetings you were a part of, but meetings and conversations that you weren’t. We all want to avoid getting caught off guard, and while technology can help prevent that, it can also enable more meaningful conversations with managers that make you stand out and open up the highest potential for value creation. Whether being proactive in offering to co-invest in a value driver you’re already aware of, or simply coming off as on top of your relationship with the manager, avoid being caught off guard and falling behind by using technology as a strength.

Annual meetings can be a gathering of who’s who in the alternative investment community.

Annual meetings can be a gathering of who’s who in the alternative investment community. For funds of funds, they can be a great hunting ground. So, understanding who is going to be at the meetings and knowing who in your network might provide an introduction can be a very valuable tool. All of these things are easily captured in data but easily forgotten in our heads. That is where good fund management software comes in and helps you act on your data.

Not every fund manager or investment firm needs fund management software. For those that are actively raising capital, chasing new deals, managing a portfolio, and communicating with investors, it’s absolutely a strategic advantage. Of course, the software needs to be used all year long, but it becomes evident just how beneficial it is during your firm’s annual meeting.

See how firms like yours use Altvia by viewing our clients and case studies.

 

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