How Investor Relations Can Drive Limited Partners Engagement

Since COVID-19 maintaining Limited Partners engagement is a top priority for Private Equity FIRMS

Recently, we had the opportunity to sit down with nine individuals who are the heads of investor relations for major general partners. We asked what was at the top of their list in terms of operational challenges. Across the board, the most commonly mentioned issue was lack of limited partners engagement.

What can investor relations teams do to increase LP engagement? Our recommendations focus on four areas:

  • Creating an outreach plan
  • Leveraging video
  • Using a secure LP portal
  • Measuring engagement to inform follow-up activities

We explain these recommendations below.

How to Keep Limited Partners Interested and Involved

1. Develop and follow an outreach plan. It’s vital that you have a strategy for when and what you email to LPs. At a minimum, your plan should indicate what the next few weeks will look like—who you’re contacting, what the focus of the outreach is, etc. Many types of information that create awareness of your firm can be used: New investments, new fund closings, employee spotlights, and thought leadership from partners are just some of the options. If you’re unsure about cadence and content, there’s nothing wrong with asking your audience. Conduct a quick survey using a free tool like Google Survey or Survey Monkey to get their input.

2. Start sharing information using videos. It’s well known that the human attention span is getting shorter all the time. And with many people working from home today—and dealing with countless distractions in many cases—it’s harder than ever for people to absorb and comprehend what they’re reading. Taking the best of your emails and expanding on their content in videos or audio files makes it much easier for people to digest the information you’re providing. You can also drive them to your secure LP portal for more details. (See below.)

3. Provide access to a secure LP portal. LPs want to know that their interactions with you and the content you provide are safe. A portal like ShareSecure has enterprise-grade security that can give them peace of mind as they check out resources you make available. Plus, you can track who has opened and viewed media files or signed documents.

4. Assess engagement to guide further outreach. With a tool like Correspond Market Edition or Correspond Investor Edition, you can gain insight on things like the recipient’s last activity and last open, as well as what content they’ve engaged with. This functionality is helpful for fundraising teams who might, for example, see that someone has opened an email several times but has not reached out—an indicator that they may just need a phone call and a little more information in order to get involved. Noting which email subject lines, days of the week, times of day, etc., are most likely to result in an email being opened is helpful as well.

Using Correspond, you can also pull a report on people who never open emails so that you can connect with them on the phone to ask what their preferred contact method is and note that in your customer relationship management (CRM) system. Altvia’s AIM CRM has a field for that purpose, which helps ensure you’re reaching out to people in a way that they’ll be receptive to. You may learn in your call that the recipient simply needs some assistance with how to manage their email correspondence from you, and a little customer service can do a lot in terms of strengthening relationships.

Staying Top-of-Mind With Investors

Taking the actions above can help you keep LPs engaged and empower your firm to achieve better results. By implementing the right outreach strategy and the right tools to support it, you can get and maintain the attention of anyone whose interest matters to your firm.

Equip your investor relations team with proven technology to increase LP engagement for the long haul. Our guide, How Firms Focus on an Excellent LP Experience, shares content like this and much more. Download the guide below.

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