Category: Investor Relations & LP Experience

They say it’s not what you know, it’s who you know.

Anyone working in private equity investor relations can attest to this. Because most investment deals require a number of outside resources to close, having a trusted network of partners and experts easily accessible is vital to any firm’s success.

Unfortunately, many  firms rely on traditional networking approaches to relationship management and building their roster of key players. That’s a mistake, and one that puts them at a competitive disadvantage.

Strategic Relationship Management

According to Forbes, many general partners (GPs) spend their time “mentally reviewing their contacts while scanning for ‘good fits,’ rather than approaching it in a systematic firm-wide fashion.” In order to compete in today’s marketplace, a strategic-yet-personalized approach to relationship management—especially with limited partners (LPs)—is essential.

For starters, personalization can differentiate your firm from competitors and help you stand out from the crowd. What’s more, adopting a more strategic approach to relationship management undoubtedly results in better, more meaningful relationships over time because your firm can offer specialized service to investors.

And these two factors can add up to more—and more profitable—deals. That’s especially true in alternative assets, private equity, and venture capital (VC).

Networking is such a crucial part of the business. Consequently, it’s critical for GPs and other team members in investor relations to adopt technologies and tools that make providing a high-touch engagement experience for investors as simple as calculating an interest rate.

How can your firm increase engagement simply and seamlessly? Read on to find out. 

Effective Relationship Management: Traditional Networking Is No Longer Enough

It used to be that a few follow-up phone calls or a nice lunch or dinner out was enough to stay top of mind with investors. But these days, raising funds means being proactive and persistent in maintaining strategic relationships with LPs.

Because LPs now expect such a personalized approach, traditional networking methods are no longer sufficient. What’s more, clinging to those methods can make your firm appear “behind the times” or “out of touch.”

Personalization, on the other hand, demonstrates that your firm is committed to excellent relationship management and provides a higher level of service. To compete effectively, GPs need to understand that and have this critical capability buttoned up.

Today’s Tech Makes It Easy to Personalize

Here are two key ways you can use private equity solutions to improve relationship management:

1. Use secure interaction hubs.

Your team can take advantage of an engagement platform to manage the GP-LP relationship. You can post data and investment materials, share multimedia files like recorded fundraising webinars and video presentations, and even use the platform to capture investors’ digital signatures.

Best of all, you can manage your important documents–from draft to final—to ensure accuracy for investors, and to maintain compliance.

2. Provide high-touch investor experiences.

To manage investor demands, your team can adopt reporting and communication tools that enable you to easily track document history for better recordkeeping and compliance.

Centralized LP portals enable you to offer secure access to all of the necessary materials when putting together a deal. Even better? You demonstrate your ability to respond quickly and stay in front of potential investors every time they access the portal.

Ultimately, enhanced relationship management—and all the benefits that flow from stronger relationships—are within your reach. All you need to do is develop the appropriate processes and implement the right technology to support them. 

An Investor Relations Tool to keep LPs happy and satisfied is the cornerstone of a sustainable firm. Positive LP interactions keep funds alive: much more than perfect valuations or cost-saving operational changes do. 

In the pre-Covid era, cash was getting harder and harder to come by. During the height of the pandemic when part shortages and supply chain inefficiencies were commonplace, LPs had no choice but to sit back and pray their GPs wouldn’t report bankrupt investments in the end-of-quarter reports. 

Now, LPs have a much lower risk tolerance but the pandemic is hardly over in many countries where those inefficient supply chains originate.

Fundraising as a Data-Driven Pitch

Raising capital is more important than ever but, quite problematically, fresh cash is hard to come by. Even firms sitting on mounds of dry powder aren’t immune, capital calls only go so far. All hope is not lost however, there are many easy adjustments firms can make to their LP interactions to keep the cash flowing. 

At its core, raising capital is not similar to assigning credit lines. LPs are entrusting firms with precious cash with the hope that GPs spend their money wisely and return alpha. Just like modern banks, credit unions, and even car dealerships have technologically updated their credit assigning methods, LP feedback requires a revamp.

LPs want to be able to predict results before they invest. This of course means fundraising is now a data-driven pitch. One rather expensive option firms tend to take is simply hiring a fundraising manager to present themselves in the most favorable light and to leverage the manager’s connections. 

This may be a time-tested way to provide cash but the chances of maximizing LP synergies are very very slim. Once it comes time to raise again, these LPs seek to invest elsewhere especially after something as industry shocking as a global pandemic. 

Instead, firms need to come up with a way for investors to continuously keep track of their money and see the positive and even negative aspects of their partner firm’s investments. Painting a true picture of a firm’s performance is the best way to improve investor confidence. 

Create Transparency for LPs

One key aspect of any successful investor relationship is being able to provide the feedback the LP needs. The most eloquent way to do so (without omniscience of course) is simply letting the LP pick and choose what metrics they want to track. Similar to our analogy of credit lines, investors want to see comparable benefits. 

PE firms need a way to continuously compare their performance against industry benchmarks and, during the fundraising process, compare their fund structure to other firms.

All of these changes to IR can be centralized with a rather often overlooked solution: the dashboard in your investor relations tool. A comprehensive and even at times exhaustive collection of data visualizations, predictive analytics, and all the important tax, valuation, and exit reports. 

There is a downside to taking this course of action. If the dashboard is not set up properly, the UX/UI may be more of a hassle for LPs than it’s worth. Of course, the vast majority of firms don’t have the time to create a properly integrated dashboard, however, they need not do it on their own. Altvia’s team of analysts and tech designers collaborate to create a simple but powerful interactive dashboard for LPs that is directly powered by the firm’s data.

Stand out from the crowd

Firms need not change what they’re doing now in terms of accounting and reporting and their Investor Relations will take a big jump in the right direction. Minimizing the amount of time and capital spent developing a dashboard like this is quite important for most PE firms and so implementing an already proven solution is an easy and economical addition to any firm’s tech stack.

A well-defined dashboard lets investors keep track of the firm’s decisions and investments and keeps a strong bond between the firm and the investor. These bonds and partnerships differentiate top tier, long-lasting firms from the average 10-year lifespan rabble.

It has become more difficult than ever to secure capital and close deals in Private Equity. When you listen and provide investors with value, you build relationships, earn their trust, and instill loyalty. But, with today’s level of competition, it’s challenging to build solid relationships without the help of an investor management platform.

As business practices and technologies evolve, so do communication tools and investor relationship management. More and more Private Equity firms are adopting scalable and efficient communication solutions. 

To differentiate firms and strengthen relationships, the right communication tools make a huge difference. Firms need to focus on improving how they interact with investors and increase transparency at the core of GP-LP relationships with an investor management platform.

A Tool Purpose-Built for Private Equity Communication

We’re in an era when technology is improving rapidly and there are endless options for communication tools. But what tool will best fit a firm’s needs? 

A tool made specifically for private equity is essential. Investors have specific needs and letting them know that they are understood is a critical relationship-building step that will pay off immediately and in the future. 

The right investor management platform:

• Automates processes to save time
• Removes the risk of error
• Gives the gift of time back to your team so they can focus building solid relationships 

That’s why Altvia built a Private Equity communications solution, Altvia Correspond. Correspond uses one integrated system to manage data, communications, smart lists, enhanced analytics, and flexible mass emails and templates.

There are currently more than 5,530 active users on the platform, connecting with investors, and nurturing relationships. See how they use the platform to connect with investors and how it has transformed their communication.

Automate IR Processes

The IR teams’ goal is to drive high-impact outcomes for your firm. Removing administrative tasks and data entry projects will give them more time to effectively and thoughtfully achieve their goals. The tools chosen to support communication should make things easier, not add busy work.

Correspond provides the high-touch investor experience that investors demand while streamlining reporting and communication processes. Teams can grow relationships with personalized communications and leverage contact lists and communication templates for more frequent engagement. It’s so simple that one person alone can handle large-scale communications—up to 50,000 recipients.

An investor management platform should bridge the gap between a CRM and the back office. Establish trust with investors with relevant, on-time communication. Investors don’t want to wait for the next reporting cycle or to ask for the latest fund performance report. Thankfully, with today’s technology, they don’t have to. 

Correspond simplifies processes by generating personalized documents and auto-populating them with data already stored in the CRM. It empowers IR teams to send on-point email communication through the entire investor lifecycle, including capital call notices, PPMs, and K1s. 

Provide Personalized Responses and Avoid Errors 

With a tool like Correspond, you can be confident that investors are receiving error-free documents and up-to-the-minute reporting. 

Since communications are automated and connected to the CRM, there’s minimal risk of sending incorrect data or missing an important deadline. Correspond reduces the time required for teams to pull reports and send them off to investors from 5-10 hours down to 30 minutes. 

Be proactive by addressing investor questions and sending them the materials they want, exactly when (or even before) they need them. 

Some of those materials include:

• Performance data and reporting on investment performance
• Market insight
• Industry information
• Communications about annual meetings
• Investor documents and agreements

Send the right information at the right time with smart lists. Create dynamic and segmented email contact lists to ensure data integrity and send targeted communications. 

Personalize communication even more by creating groups of contacts to send documents regarding investor commitments and record those contacts’ communication preferences. That way important files, like capital calls, go where the investors want them–their  Portal or email. 

Once you’ve set these preferences, Correspond automatically applies the preferences to all future mailings driving accuracy and efficiency in your operations.

Enjoy audit functionality and the flexibility to track and send documents by email or through a portal to give peace of mind when communicating with key stakeholders. 

Get Back the Time You Need to Engage with Investors

Time is precious, and so are investor relationships. Investor relationships are a key driver in a firm’s success. With the right technology, IR teams will find more time on their hands to focus on nurturing relationships. 

By automating processes and significantly reducing the risk of error, teams will be less weighed down with administrative tasks and repetitive data entry. 

To make things even better, Correspond empowers firms to share reports and fund information and then track what the investors are doing with that information. This allows firms to track behavior and monitor their investor interest to improve the targeting and personalization of investor communications.

Embrace Technology to Elevate Investor Relations and Drive Revenue

By working hard (and smart with the help of technology) to manage investor relationships—earning their trust and anticipating their needs—you will set your firm up to be well-positioned for a “yes” from investors when the next fundraising opportunity arises. 

The goal should be to exceed expectations. Firms operating with tools like Correspond can be both proactive and predictive, giving their investors error-free, relevant information and guidance every step of the way. 

4 Reasons to Love Co-Investments

1. Co-Investment’s Strong Allure

Before we dive into why LPs find co-investments so appealing, let’s review how they differ from standard fund structures. Put simply, in a co-investment, an LP—along with other investors—makes a direct investment into a portfolio company. Financial investors also usually include a general partner (GP) whose traditional funds the LP already backs. This type of deal bypasses the well-defined agreements of typical private equity partnerships between GPs and LPs.

With very different terms than those in a standard partnership agreement, co-investments are technically a minority ownership stake for co-investors, many of whom are already existing LPs. 

Depending on the equity splits between a lead sponsor and the co-investors, the identity of the co-investors, and factors such as deal origination, sector expertise, and the jurisdiction of the co-investors, co-investments are often unique, with no one-size-fits-all arrangements.

2. Co-Investments Have Investor Appeal

In the age of digital disruption, investors are increasingly asking for customized arrangements like separate accounts and co-investments. So, it makes sense that LPs are eager to find opportunities like these. LPs can attract today’s investors and stand out in the marketplace.

“The demand has never been there at this level,” explains Altvia SVP, Industry Solutions & Strategy, Jeff Williams, in an interview with Tom Stabile of FundFire for the article “Blackstone, TPG Snag Private Equity Asset Crown.” He continues: “There is an increased desire for the asset class, and [limited partners] are trying to find creative ways to put [their capital] to work. And there is an overwhelming sense that we’re in the early part of the game.”

3. Co-Investments Have Term Appeal

Another big draw for LPs? 

The potential for higher returns with lower fees—something that naturally, investors are also looking for. ValueWalk reported that 80% of LPs reported better performance from co-investments than from traditional fund structures. In the same ValueWalk survey, almost half (49%) of GPs charge no management fee on co-investments, and 48% charge no carried interest.

In addition, co-investments can help lead sponsor co-investors plug holes created by tight debt markets, reduce risk exposure, and/or bring additional industry or regional expertise (or simply a brand name) to an investment. There are also opportunities to find diversification, achieve better net investment returns, and accelerate capital deployment

But the benefits don’t end there. Disagreements between GPs and LPs over a deal structure, asset buckets, or costs have ruined many a great investment. 

LPs prefer the co-investment model because it offers them an opportunity to:

• Understand how a GP operates, including how they perform due diligence
• Test-drive or deepen potential relationships with GPs, investors, and colleagues
• Piggy-back on the insight and expertise of the lead investor

4. Co-Investments Have Career Appeal

Private equity firms are finding co-investments ideal for keeping LPs on staff, while also providing opportunities for greater differentiation in the marketplace. To investors, a trusted CFO with a capable team that exceeds expectations and upholds the firm’s reputation speaks volumes during due diligence.

In fact, 48% of CFOs identified talent attrition as a top risk in the EY 2018 Global Private Equity CFO survey. CFOs understand that engaged LPs remain loyal and perform better, making co-investment deals a win-win for firms, too.

What’s more, strategic co-investments offer more than a way to attract and retain top talent, they’re also an opportunity to engage with your network in a new way and solidify your firm’s reputation in an increasingly competitive environment. 

What’s not to love?

We have interesting conversations with clients and prospects regularly about our ShareSecure virtual data room and secure data rooms in general.

In those discussions, we’ve found that there are some common misconceptions that people in the financial industry have about data room security. And, unfortunately, these “myths” represent a real risk. In some cases, people who believe them end up paying for more security than they’re getting in return or paying for features they don’t need.

But there’s an even worse potential outcome. Some of the people we talk with are using protective measures that are easily circumvented or no protective measures at all. This leaves them vulnerable to a security breach that can have both immediate and lasting consequences.

In the short term, there is the time, effort, and money expended to investigate and remedy the breach. And over the long term, the damage to a firm’s reputation for having failed to protect stakeholder data can be disastrous.

Below are the three misconceptions we encounter most often.

Myth #1 – More Security Features Equals Greater Data Room Security

Frankly, this statement depends on how you define security. If you’re just referring to the number of “security features,” then certainly some secure data room providers can tout a long list of features they’ve built into their systems.

In building our secure data room, we carefully considered the feature set and have intentionally not included a number of features because we feel that much of the functionality that expensive legacy secure data rooms offer isn’t relevant to the market they serve. Consequently, it drives up the cost of the product unnecessarily. That’s great for the provider, but not for the consumer.

One of these features, for example, is limiting a user’s ability to print or take screenshots of documents. When this feature was first introduced by those providers long ago, no one had camera phones, so preventing someone from printing hard copies of reports or taking a screenshot actually meant that, to a large extent, you could keep them from illicitly sharing information.

Today, everyone has a camera in their pocket and a continuous internet connection. Nevertheless, some people still consider printing/screenshot restrictions (and other outdated functionality) to be important and will continue to pay for it. But the truth is that if information is accessible online and people have bad intentions, there will always be ways to share it. As a result, forcing customers who need a secure data room to pay for this outdated and unnecessary feature is unreasonable.

Myth #2 – Well-Known Data Rooms Are More Secure

In the Private Equity industry, we’ve found that many people consider Dropbox to be the gold standard for sharing documents with LPs. However, you may have read this article on Dropbox security explaining that  a number of sensitive documents that were shared on the platform ended up freely accessible on the internet. 

That’s a call nobody wants to have with an investor or other stakeholder!

The same security flaw was present on the Box file sharing platform at the time. In each case, the security breach resulted from a design choice to make sharing links easier. Both platforms have been updated since this issue was discovered, of course, but the incidents underscore an important point: The big data room providers are no less susceptible to security flaws. And, you could argue that being a well-known platform makes them more of a target for hackers.

These breaches also highlight some of the drawbacks of financial institutions relying on a data-sharing service that was designed for general consumer use rather than specifically for a firm’s needs.

Myth #3 – Complete Data Room Security is Achievable

As noted above, if information can be displayed on an electronic device, it can be copied, shared, and sent around the world in seconds. There’s simply no way around that. That’s a troubling reality to wrestle with, but it’s important to keep in mind that your documents and data are safer online today than they are in a filing cabinet in your office.

The objective with developing and maintaining online secure data rooms isn’t to create something that is immune to cyberattacks at all cost. Rather, the goal is to build virtual data rooms that are affordable and highly secure while still facilitating the efficient and effective exchange of information. You’ve got to protect your data, but you also have to close deals.

In other words, it’s about balance. You want a secure data room like ShareSecure that gives you the best of both worlds.

Click here to learn more about our data room, ShareSecure.

Succession Planning for Private Equity Firms is Essential to Long-Term Financial Success

Succession planning is important for any type of business that would like to see the legacy continue after the founding members are gone. Often, private equity firms put a great deal of thought and effort into the succession planning of their operating companies, yet fail to practice what they preach when it comes to their own firm.

Succession planning refers to the process of ensuring that an organization’s operations continue uninterrupted and that its performance doesn’t suffer in the event that one or more leaders depart. A principal’s exit can be planned or unplanned, but either way, the departure can cause tremendous upheaval in the organization. Just as importantly, without proper succession planning, a change of leadership can be a cause of concern for investors and portfolio companies.

Private equity firms suffer the same consequences of poor succession planning as other types of companies. It can lead to a loss of customers, talent turnover, and reduced company performance. 

But the unique nature of private equity relationships introduces additional threats to the company when succession planning isn’t done right or doesn’t happen at all. International leadership development strategist Jenn DeWall shares, “For private equity, this can mean loss of investor trust, leading to fewer investments, instability in relationship management, and gaps in asset management.”

Why is Proper Succession Planning Important for Private Equity Firms?

It’s important for private equity leaders to understand that experienced LPs recognize that poor succession planning can be bad for their returns. Many will want to know about the firm’s succession plan during due diligence. Those private equity firms that can’t provide clear answers that reflect the careful preparation they’ve done are considered riskier investments.

This is because private equity leadership is unique. Your firm needs leaders who understand the intricacies of navigating relationships with a variety of stakeholders, including partners, investors, and leadership teams of portfolio companies, not to mention their own firm’s internal team. 

They also must be able to understand how to continue to maintain a strategic focus on value creation in current investments, while simultaneously developing new opportunities. There are not many people in the industry who have the skill and experience to understand and effectively address these factors, particularly through a period of transition.

When a leadership exit occurs in a private equity firm, there is a significant risk that the transition period will be chaotic. It can often result in key partners and/or employees leaving the organization, as well. It can also create changes in the firm’s strategic focus. These and other negative potential outcomes can impact investors’ returns, even as they are stuck in a long-term contract. 

If the ship isn’t righted quickly, investors begin to feel the burn and will react accordingly. And they should be expected to. Nobody enjoys suffering losses, in particular those that could have been avoided with better succession planning. Not only will the firm find it difficult to retain investors, it will also have a tough time bringing in new ones.

5 Private Equity Succession Planning Best Practices

Simply having a succession plan shouldn’t be any firm’s objective. There is a right way and a wrong way (really, many wrong ways) to do succession planning. In our experience, the five best practices below are essential. 

1. Start early.

It is never too early to begin succession planning. A great example of this is the story of Blue Point Capital. This mid-sized firm had a succession plan almost from the very beginning, and was able to exercise that plan by their third round of funding.

The earlier you begin your firm’s succession planning, the easier it is to put the rest of these best practices into place. It also gives you ample time to groom your next generation of leaders, helps your firm react to an unplanned exit easily, and improves transparency and communication among investors and the internal team. When you plan for succession early on, it becomes an organic transition rather than a knee-jerk reaction.

2. Remember that firm culture rules.

A positive firm culture is critical to effective succession planning for several reasons. First, if you’ve developed a sense of ownership and fairness in economic outcomes among your team members, they’re much less likely to react negatively to a leadership transition.

Developing a culture of open, honest communication and full transparency also helps with the transition. It means that you’ve been communicating with staff, partners, and investors openly about your succession plan so that there are no major surprises when it happens.

Further, when your firm has a culture that is focused on the professional development of employees, it becomes much easier to promote from within. This way, you’ll know that the next generation of leaders intimately understands the business, the culture, and the firm’s shared values. Developing your next generation of leaders should include a mix of leadership development training and mentorship programs.

When the time is right and you’ve identified the right people, promoting co-leaders in order to give them hands-on experience and training is very beneficial. As the founding leadership team of many top private equity firms are entering their twilight years, this approach to transitioning to the next generation of leaders is proving quite valuable. Bain Capital and KKR & Co. are two examples of top firms incorporating new co-leadership positions into their succession plans.

3. Keep a “portfolio” of leadership contenders.

Many private equity firms create a “portfolio” of potential CEO contenders for the companies in which they invest. But this is also a good practice for your firm’s own succession planning. Some firms simply don’t have the resources or the talent pool to be able to promote from within. In that case, you will need to do an outside search for leadership talent.

Maintaining a list of potential next-gen firm leaders helps your leadership team keep an eye on their professional development and achievements over time in order to determine how well a person fits into the firm’s vision of the future. It also helps make the transition less time consuming and costly if there is an unplanned leadership exit.

4. Develop fair incentive programs.

Including incentive programs for your firm’s next generation of leaders is a must in your succession planning. Too often, new leaders become frustrated and disenfranchised when they take on greater work and responsibilities in the firm without increased compensation, while the founder sits back and continues to take the lion’s share of economic benefit. This often leads to the successors leaving the firm prematurely to start their own firms.

Make sure your next generation of leaders are well compensated and cared for if you want to ensure your firm’s ongoing success. They need to feel a real sense of ownership in the organization, even if they weren’t the original founding members.

5. Ensure leaders get comfortable with the idea of letting go.

Perhaps the most difficult thing for a founder to do is just let go. It’s risky to hand the reins over to young and less-experienced team members. Founders worry that they’ll watch everything that they’ve worked so hard to build crumble. It’s a legitimate concern, but one that must be pushed aside if you want your succession plan to be a success.

New leaders will likely do some things in a different way and make different decisions than a founder might. But that’s not necessarily a bad thing. It’s vital that current leaders not let their egos stop their firms from continuing on without them.

Succession planning is inherently difficult in any type of organization. For private equity firms, it’s even more so. 

The transition that takes place when a key leader exits a firm can cause a significant amount of stress and financial pain—for the private equity firm as well as investors. But putting a transparent and fair succession plan into action early on, and ensuring it’s one that focuses on the development of your internal team, can smooth the transition and make sure your operations get back on track as quickly as possible.

With the COVID-19 pandemic creating physical distance between investors and fund managers, frequent communication with a private equity platform is even more paramount. 

Firms historically struggle to create a consistent and clear flow of information with their LPs, causing Investor Relations teams to feel stuck in a reactive state with limited tools to improve communication and visibility.

PEI asked 120 Fund Managers about their communications with investors and 61% stated LPs request more frequent reporting about portfolio company revenues in light of COVID-19. 

In this guide, we’re sharing how funds can keep in step with frequent reporting requests. 

For IR teams to drive key relationships and continue everyday engagements they need to:

Automate common workflows 

A maxim of productivity is to automate anything that is done more than twice. In IR departments several activities fall within this category and can be automated with a private equity platform. 

PPMs

A well-crafted PPM is an asset to investor relationship management. A PPM with modern design and thorough information can bolster confidence. Automate the process of creating your private placement memorandums so your investors see your consistency, attention to detail, and reliability. 

Cap Calls

Capital calls must be executed flawlessly to ensure the growth of your fund. Create a cap call template that includes your key information like the percentage of unfunded capital called for, due date, list of total commitments, name of the fund, and payment details. Once this template is in place, it should be added to your private equity platform so you can automatically deploy it when your firm finds its next promising deal. 

Distribution Notices

Managing distribution notices with an email service can become an administrative nightmare. Automating the distribution notices saves hours and ensures the communication schedule is reliable which cultivates LP trust.

Review communication coverage of investors and stakeholders with your private equity platform

Use interaction data provided by your communication platform to create a proactive plan for engagement. Develop a habit of reviewing tearsheets that summarize interactions with LPs. 

Measure engagement to inform follow up activities, and talking points

From your interaction reports and tearsheet review, you will see details of each interaction. Those details should be used to schedule further, meaningful connections with investors. 

Perhaps you need to schedule a brief touch base to inform an LP on the progress of a recent cap call. Perhaps you see a group of LPs is waiting on a report. Develop a practice of reviewing your LP interactions weekly and creating your task list from that. 

Provide self-serve analytics in a secure portal

Self-serve analytics is the norm for today’s tech-literate consumers. Provide investors access to as much data as possible while still maintaining a high level of communication. 

Most LPs appreciate the ability to dig into data and review it for their own purposes. Your private equity platform should have several options to display and deliver self-serve reports for investors. 

Proactive outreach earns trust

The state of investor communications has been indelibly changed. Proactive outreach to LPs is a new requirement. 

Use automation to optimize administrative tasks, follow-up based on previous interactions, accountability across the team, and share rich reports with LPs through a secure portal.

Through technology, communication can be automated without sacrificing the investor experience. Reduce time spent on one-off requests and take advantage of your data, interactions, and industry knowledge to build stronger investor relationships.

Private equity firms and managers are significantly expanding initiatives focused on how data is accessed and used in order to elicit more actionable insights and implement a better data management strategy. And, as deal-making becomes more competitive, the need to strengthen investor relationships grows as well. Fortunately, new data technologies can boost transparency and accuracy around research, financial strategies, deals, and assessments.

As an expert in investment management data strategy, Altvia Founder and CEO Kevin Kelly was featured in an article published by FundFire, a Financial Times publication. Titled Blackstone, KKR Move to Revamp Data Strategy, the piece, which requires subscriber access, addresses growing trends and increasing industry needs around data strategy and solutions in the private equity marketplace.

Long-Standing Pain Points in Investment Management Data Strategy

Pain points for firms include the challenges associated with growing volumes of disparately stored data. And these issues go back many years, as The Economist Intelligence Unit found in a 2015 survey of 201 asset and insurance executives. Today, the need to manage data more effectively is driving many firms to consider more sophisticated data solutions.

According to the FundFire article, firms like Blackstone Group and KKR are committing significant resources to data strategy in order to increase the effectiveness of deals, investing, and operations. Data warehousing–using a central data repository created from disparate sources–is also being implemented by a growing number of firms in order to increase data accessibility and usability that can aid in the decision-making process across teams.

Report: Enact Your Investment Management Data Strategy Now or Fall Behind 

FundFire also notes that according to a new report from Deloitte, firms and managers should actively improve their data handling methods. And they need to do so relatively quickly in order to avoid “strategic risks” and “outmaneuvering” by competitors. 

To get your firm moving in the right direction, get started below.

When we hosted THRIVE, we purposely scheduled it early in the year knowing our clients would be gearing up for a busy annual meeting season in Q2/Q3.

We spoke with a marketing director at a lower middle market fund of funds about how they traded in the Ritz Carlton for a ritzy online experience and wanted to share these tips to keep investors satisfied in 2021 and beyond. 

1. Less is more in virtual annual meetings

Annual meetings are vital in connecting your team with all of your external stakeholders in order to network, talk about performance, and share ideas regarding strategic direction. That full schedule does not translate well to an online summit, so teams have had to quickly rethink the best use of the available time.

One thing that our client mentioned was that instead of the traditional two-day, “all-in” program, they set up a virtual annual meeting as a series of 45-to-60-minute webinars spaced three to six weeks apart. This allowed them to reduce the risk of webinar fatigue because each event had a concise, tailored message. In fact, in their first pre-annual meeting COVID-19 check, they actually saw a 30% increase in registrations because people didn’t have to block days on their schedule and book travel.

2. Focus on what investors really want

While some people like a steak dinner and schmoozing, ultimately, what matters most to your investors is the meat of your firm’s performance. They come to annual meetings to understand where and how value is being created in the portfolio and to better understand how you’re positioned to take advantage of opportunities and/or avoid risks. You want to be able to provide that information to your investors, but you don’t have to wait until they are with you at a conference table.

Creating a track record dashboard to securely share information with your stakeholders can accomplish many of the same goals and also make the data easier to consume than on a slide in a presentation. While there may be fewer opportunities to answer questions during the meeting, interactive data access like this allows the investor to ask any questions they have on their own time when it’s convenient for them.

Additionally, as uncertainty about the pandemic and its aftereffects lingers, investors remain hungry for your firm’s updates. You can meet that need and increase your touchpoints with them by storing your presentations, videos, and dashboards before or after your meetings in a secure portal or data room.

3. Find the right technology to support your virtual meeting

The sudden switch to online events is a major paradigm shift. Beyond the simple things (like not having anyone flush in the middle of your presentation!), you also need to make sure that the communication platform you select is secure, protects your data, and has clear audio streaming features.

While many people have moved to Zoom Webinars, we have also seen success in some of the advanced solutions from On24, BrightTALK, and BigMarker.

A few things to consider for your annual meetings include:

1. Does the software require you to download to view or is it in-browser?
2. How does the webinar solution help you manage event marketing and registrant tracking?
3. What is the breadth of viewer analytics you receive during and after the event?
4. After the presentation ends, how is view-on-demand access controlled?

4. Get “all hands on deck!” to prepare for your annual meeting

Your investor relations team and fund managers are always involved in preparing for an annual meeting, and moving to an online format doesn’t mean there is less work to do. In fact, it might actually increase the amount of effort needed and require resources from across the firm. As our client stated, “We are going to over-communicate until they tell us to stop.”

In order to host a successful virtual annual meeting, team members from each department will have to connect with LPs to make sure they are well-informed about market changes, investment performance, and how your firm is adapting to new business requirements. Others in the organization will have to get involved, as well, to provide the kind of white-glove service participants receive during an in-person event throughout the extended virtual event.

Ultimately, the expertise firms have developed in coordinating virtual annual meetings will benefit them in many ways in the months and years ahead.

Will you be hosting virtual annual meetings? If so, how will you ensure they are engaging and effective?

Annual meetings aren’t the only activities that have gone virtual. Fundraising is being conducted largely remotely these days, too. Get insights on how the most successful firms have adapted to this approach in our information-packed webinar The Art of Virtual Fundraising.

The competition to win—and retain— investor communications are becoming increasingly fierce, and market predictions point to continued escalations in difficulty.

Combine that with a noticeable decline in the number of investors planning to invest more dollars in the marketplace and we’re finding that many Private Equity firms and asset managers are actively looking for innovative and effective ways to win over new investors and maintain the interest of existing ones.

Private Equity Communication Tools: Turning Challenges Into Opportunities

While it is more difficult than ever to secure capital and close deals in Private Equity, this challenge actually provides a unique opportunity and powerful motivation. Forced to adapt or be left behind, firms are exploring new technology that they may not have otherwise considered.

What they are finding is that these tools can be used to improve workflows and streamline operations. When successfully implemented, Private Equity communications solutions, in particular, can positively impact both resource utilization and revenue.

With communication and transparency increasingly at the core of GP-LP relationships, focusing on improving and redefining the ways that firms interact and communicate with their investors can produce a significant competitive advantage.

Setting Your Sights on a Purpose-Built Private Equity Investor Communications Tool

Many communication tools promise the ability to increase the effectiveness and efficiency of interactions with stakeholders. However, few are purpose-built for the Private Equity industry.

As an asset manager or other stakeholder searching for the right solution for your company, it’s important to prioritize your specific needs and goals rather than settling for a system that’s “good enough.” Before you start shopping for a solution, you should create a detailed list of your requirements so that everyone involved in researching and reviewing your options is, literally, on the same page.

Insisting on a Proven Solution

Altvia’s Private Equity communications solution, Altvia Correspond, is built around specific industry needs like investor relations, communications, marketing, and fundraising. Altvia Correspond Market Edition provides the core features of a mass email application with the benefit of integration with AIM, our Private Equity CRM solution on the Salesforce platform.

It’s an end-to-end system that addresses all of a firm’s data and Private Equity communications needs. It allows users to easily, creatively, and effectively manage communications for prospecting, fundraising, deal announcements, and roadshows without the labor-intensive, manual “swivel chair” approach that requires exporting data from a CRM and then importing it into a separate email application.

Some of Altvia Correspond Market Edition’s advanced capabilities include:

• INTEGRATED COMMUNICATIONS. Use one system to manage your data, mass communications, contact lists, and reporting.
• SMART LISTS. Create dynamic email contact lists from your AIM data to ensure data integrity and send targeted communications.
• ENHANCED ANALYTICS. Leverage data from your communications to drive more informed decision making for fundraising and deal sourcing.
• FLEXIBLE MASS EMAILS AND TEMPLATES. Grow relationships with personalized communications for broad audiences and leverage contact lists and mailing templates for more frequent engagement.

Investor Communications Tool Provider That Stays on the Leading Edge

Private Equity communications tools, and investor relations solutions in general, continue to evolve as business practices change and available technology improves. As more Private Equity firms adopt scalable and efficient communications solutions, the need to differentiate in order to stay ahead of the competition will increase.

Simply implementing an adequate system and then turning your attention to other initiatives isn’t a good long-term strategy. Becoming complacent about your private equity communications solution can cause you to fall behind your competitors. You’ve got to regularly assess your options and be prepared to move to a better system if one is developed.

At Altvia, not only do we offer a full line of integrated solutions to meet your needs today, but we also provide comprehensive consulting and support through Altvia Care to ensure that your needs are addressed and you’re always taking full advantage of our suite of products as they evolve in sync with our changing industry.

As Keith Janosky, CFO, Head of Investor Relations at Khosla Ventures notes in a webinar on The Art of Virtual Fundraising, “We use Altvia to track our LPs and our regular communication with regards to fundraising so we can record their interactions and emails.”

Get more of his perspective and insights from other experts when you watch the information-packed session.