Service — this is where best-in-class firms truly differentiate themselves from the competition. Instead of creating a more tactical management style, these savvy firms strategically position themselves to become less about “doing things right” and more about choosing the “right things to do” for their investors.
Once you’ve raised the money for the fund, you may feel that the hard work is over. But even though you’ve secured and committed the business, you’re still only halfway to a successful investor relationship. The truth is that the real work is just beginning. The worst thing a firm can do is behave like their job is done once they’ve closed an investor.
As a GP during the closing stage, how you share, store, and sign key documents is an opportunity to provide excellent service and build a strong relationship with investors. Using technology to support all of the necessary back-and-forths when signing agreements and sharing documents can provide your firm with a competitive advantage. To build trust with your investors, this document-heavy stage must be as painless as possible.
Private equity success is highly dependent on the firm’s ability to successfully fundraise. In the past, much of the fundraising process and communications were managed manually. In recent years, the explosive growth in the private equity space has increased the volume of people, information, and activities there is to manage. You used to be able to hang your hat on past relationships and handshakes, but today, LPs are demanding more access to information, proactive communications and reporting, and seamless exchanges with their GPs.
As we discussed in a recent webinar with PE Hub, GPs are finding it increasingly difficult to differentiate themselves. Fund managers are vying for the same LP dollars and LPs are demanding a better experience—supported by increased transparency and real-time data. The key to differentiation is to create a stronger relationship, by providing a better investor experience. But how can firms, fund managers, and IR teams create an excellent LP experience to attract the top investors and opportunities?