Case Study: Edge Natural Resources Is On Top of Their Game With Investor Relations

Edge Natural Resources is an energy private equity firm focused on opportunities in upstream exploitation and development with aggregate commitments from a diverse base of foundations, endowments, and family offices. The firm is experiencing strong momentum and as they grow, so do their operations and investor relations demands.

The Challenge

To help solve these growth challenges, management applied 25+ years of combined private equity experience in selecting a solution to help consolidate, organize and integrate their workflows and fund management along with investor relations communications. Their most recent experience included managing 300+ investors across multiple funds.

This experience was brought over to Edge Natural Resources with careful evaluation of cloud-based CRM solutions that could integrate with backend accounting systems as well as front-to-back solutions.

The Solution

“What led me back to AIM was a good experience and its ease of use. The decision really came down to people – who you know, who you wanted to help you succeed,” shares Stacie Moore, Partner, and CFO, of Edge Natural Resources.

In addition to AIM, Edge Natural Resources also selected Correspond Investor Edition to simplify investor relations communications like capital calls and document splitting as well as ShareSecure to manage the volume and coordination of investment materials. By implementing this integrated solution from the beginning, Edge Natural Resources has gained a competitive advantage.

“The business needs involved the information and manner in which we touch our LPs – communicating with investors in a seamless way that’s accurate and efficient. I wanted to be ahead of the game at Edge Natural Resources and ensure a smooth process and investor experience,” comments Moore.

In relation to the onboarding experience, the implementation process involved a dedicated project manager and support team to ensure adoption, data integrity, and training.

“When working with the implementation team of Altvia, this team really wanted to know our goals and workflows and then understood the end game so I could get to where I needed to be,” shares Moore. And with a prescriptive approach calibrated to Edge Natural Resources, the process was streamlined and effective by sharing best practices and providing customized training.

With this foundation in place, Edge Natural Resources plans to expand applications for the system and optimize processes with current private equity-specific modules and workflows.

What are the most important benefits? “Time and investor perception,” comments Moore. For example, Edge Natural Resources gains significant time savings when distributing a capital call through a more automated, integrated workflow. And to service the number and breadth of investor demands, the firm provides a high-touch investor relations experience with consistent communications, reliable reporting, and timely investment materials.

The derived benefits represent a partnership. “I do think that people make decisions differently and I make decisions based on relationships. I could tell that relationships are important to everyone I’ve dealt with at Altvia. The people I work with actually care – care what I think and want to make me successful. And that to me is very important, more so than if you have all the bells and whistles – you can get that eventually anyway. But having the people who care is more important. I want to have someone that I can count on.”

A traditional crm was built for general ‘customer’ scenarios

Software platforms have made the world a better place by making work a better place. Indeed the world is better off when people enjoy their jobs even marginally more, and workplace applications on big CRM platforms like Salesforce.com have done that and much more.

But the potential that platforms like these offer presents diminishing returns: once the platform provider has engineered too many industry specific components into its platform, its usefulness for other industries begins to be threatened, and with that so do the usefulness of the component tools built into the platform.

So it is with the CRM category that Salesforce.com has defined: it is generic enough to work for many industries, and yet still offers the potential for others to round off the edges and nail more vertically-oriented and extremely tailored software solutions.

Private capital markets are actually a great demonstration of this dynamic. Where generic CRM platforms simplify — appropriately so — to assume there’s a business, a customer, a sale, and service of that customer, there are a few industry-specific pieces that are missing.

Take for example, that investors become customers by investing through legal entities the GP raises. It’s a subtle but important nuance that just doesn’t make sense at a platform-as-a-service level (because it’s overly complicated for a simple one-time sale that many industries require), but which can easily be added without 10 years or software engineering. Once provided, the rest of the platform’s components become tremendously powerful again and you’re set to take over the world.

As a traditional CRM in our pillars methodology, these nuances must be present to properly account for investors in these legal entities, potential target companies and which are owned by these entities, the context of all interactions with these parties (as well as the appropriate overlap, ie co-investments), and how you’re arriving at finding these opportunities on both sides of the equation, such that you’re able to piece together what’s effective and what’s not. Not just because we say so, but because these are the very relationships and data that are key to the motivation behind a CRM in any industry.

It’s critical, too, that the valuable publicly-available information that helps to enrich CRM systems and save users painful steps of entering it themselves is fully-integrated at the platform level.

Again, look no further than the 3,000+ pre-built integrations that Salesforce.com — the creator of the CRM platform concept — has at a platform level to do so, and which only exists by way of holding just short of overly-specifying certain industry workflows that would present challenges to properly integrate.

Stakeholder reporting and communication (investor relations) draws on a range of datasets

The traditional “customer service” model of CRM systems once again makes overly-simplified assumptions about the customer relationship when applied to private capital markets.

In fifteen years I personally have yet to hear the terms “warranty” or “service call” in this market because it’s just not the same. But make no mistake, as uncomfortable as it may be to say aloud, customer service is more important now than ever and it’s constantly happening; the industry is, after all, considered to be a financial “service”.

As it turns out, that service is primarily information-based — it’s driven by data and takes the form of reports and analysis that drive decisions, and then end up again in investor-facing reports and analysis.

The foundational elements of a private capital markets CRM must be built such that they accommodate this data (like we discussed above), but so too that it can accommodate additional supporting data that investors (customers!) need in the context of service.

Oftentimes this supporting data — financial metrics and time-based values, for example — is believed not to meet the traditional definition of CRM and the natural thought is “well, better do this in Excel!”.

While I happen to believe Excel is still the greatest software application ever built, its introduction to this value chain we’ve discussed herein actually creates the problem many firms suffer from: key data needed to provide customer service (again: effectively the entirety of a firm’s reports and analysis) is now in disparate systems and detached.

Both of those dynamics are important and distinct: not only is this supplemental data disparate, but when brought together there is no logical association that can be made between the two data sets.

Allow me, then, to make the point very simply: not only can this financial and time-based value data (you may be thinking about is as “portfolio monitoring” or “accounting”) be a part of a CRM, it is arguably the most important part of a CRM because it’s at the core of what providing service to the customer entails — information that comes out of data!

Firms need a digital method to engage stakeholders (ie investor portals)

Investor portals are not new; in fact, for many of us — including myself — they conjure up horrifying nightmares in which we’re aimlessly guessing at folders to find the newest document we need.

So in lies the opportunity: not only have the portals we’ve come to hate not simplified the process of acquiring information, they’ve failed to create an entirely new experience that is “customer service” driven.

To be fair, this is not a B2C market where you’d be long out of business for not having focused on customer service and thus the customer’s technology-driven experience. But don’t expect to be around too much longer if you aren’t thinking about this shift.

Today’s institutional investors increasingly expect this same consumer-like experience, and a massive opportunity is being missed by not providing it. It’s not about providing them the experience they desire; it’s more about the ability to measure engagement that is had in return.

Put simply: what’s keeping the market from providing this experience is the availability of the information that’s required to create the service that provides the experience.

If you’ve hung in this long, you know that by focusing on your CRM, you have the data that’s required to manage the customer relationship and the technology-driven experience through which that information is shared to create a differentiated and opportunistic customer experience.

investor relations