Guide | How To Improve the Investor Experience with Technology

A Guide to Improving the Investor Experience with Technology


It’s increasingly difficult for General Partners (GPs) to differentiate themselves. The appetite for risky deals is lower than previous periods so fund returns converge to similar levels more often. Your firm is likely vying for the same Limited Partner (LP) dollars and your LPs demand a better experience with increased transparency and real-time data. The key to differentiating your firm in this post-pandemic world is to create a stronger relationship by providing a better investor experience. But how can your Fund Managers and Investor Relations Team make the experience that attracts the top investors and opportunities?

Since the pandemic began, LPs also began asking more questions. Private Equity International surveyed 80 institutional investors on the clarity they have on COVID-19’s impact on portfolio performance; The results show that almost two-thirds of investors do not feel they have good visibility.

Two-thirds of investors do not feel they have good visibility on portfolio performance.

What level of visibility do you feel that you have on the impact of COVID-19 on your PE portfolio performance?

Almost two-thirds of investors do not feel they have good visibility on the impact of COVID-19 on their funds’ portfolio companies. When PEI asked fund managers about their correspondence with investors, 61% stated
they are being asked by LPs for more frequent reporting of portfolio company revenues in light of COVID-19.

In that same survey, PEI asked 120 Fund Managers about their communications with investors and 61% stated LPs request more frequent reporting about their portfolio companies since the pandemic began.

While increasing stakeholder requests is far from new, your firm will likely have to rethink how they communicate and handle in-person engagements with current and prospective investors.

Your team might evaluate the technology they use to drive excellence in their LP relationships while they now work remotely. In addition to clearly defined internal processes, the technology you need to compete in this new environment includes:

  • A CRM built for the Private Capital Markets
  • An email communication tool integrated with their CRM
  • A Portal for Investors to self-serve
  • A Business Intelligence tool to turn data into actionable insights

In this guide, we demystify the secret of how firms effectively use technology to increase investor confidence, satisfaction, and commitments when operating for the new normal.

Chapter 1: The New Foundation For Building Relationships In Private Capital Markets

In software, there’s a concept of “User Experience.” This is at the core of software development and focuses on the overall experience that a product creates—how easy it is to use, how much trust it builds, and how the product makes the user feel when interacting. In the software industry, the User Experience is paramount to customer satisfaction.

We believe User Experience translates directly to the Investor Experience.

Private Equity International surveyed 120 fund managers what they expect once “normal” business life returns, and 50% plan to hold more online meetings.

What is an Outstanding Investor Experience

To start, it’s not about the what, but the how. How do your investors receive your information if in-person meetings no longer happen? Is the experience seamless? Do you proactively address their questions? You need close consideration of how current and prospective investors receive documents and agreements; how firms manage communications around their annual meetings, funds, and deal announcements; and how accessible performance data is for investors.

Technology Drives Relationships

Software systems and data allow your firm to scale giving your team more time to manage investor relationships proactively. The most basic piece of technology that a firm needs is a CRM or more generally, a place to house your relationships and data. CRMs vary from the simple and non-specific—a few spreadsheets or an Outlook contact list—to the complex and tailored. While simple can be easy to implement and understood by your team members, it can often miss the mark on driving true benefits across teams to investors. We won’t go into depth on how to choose a CRM (you can check out our buyer’s guide for that!) but will say it’s relevant to understand the breadth and depth of the relationships, contacts, interactions between them, and data that you want to track and understand in your system of record when you select a software.

Once the technology foundation is there, the most successful firms leverage their proprietary and third- party data. As the industry continues to be competitive, firms’ technology solutions have to move beyond simply housing the different data to now automating and connecting it to drive action.

How to Leverage Technology to Keep Fundraising Strong

While fundraising slowed down since the pandemic started, firms with experience during economic downturns are using this time to remain top of mind for their investors.

Success in the Private Capital Markets is highly dependent on the firm’s ability to fundraise. In the past, much of the fundraising process and communications were manual. In recent years, the explosive growth in the Private Capital Markets increased the volume of people, information, and activities there are to manage.

Previously, you would be able to hang your hat on past relationships and handshakes, but today, LPs demand more access to information, proactive communications and reporting, and seamless exchanges with their GPs.

With these increased expectations, it’s worth taking a closer look at the fundraising process steps to determine how you can keep the momentum. Evaluate your investor’s experience so you can identify opportunities to improve communications and leverage technology to be more proactive and provide greater information access to your LPs.

Chapter 2: Move Beyond Basic Communications

The first area to consider increasing efficiencies and improving the investor experience is general firm communications.

We will assume that your firm has graduated from various spreadsheets with investor information to an industry-specific CRM platform. The next question you should ask: How do we communicate with investors? It’s likely email is a popular answer to deliver messages even in a post-pandemic era. There are a variety of documents you might send to your investors: what you’re bringing to market, deal announcements, the fund prospectus, newsletters.

Top tier firms use communication tools to send targeted emails based on the activity and behavior of investors.

Often, the most helpful email systems connect to your CRM, allowing your team to create lists right from your contacts for accuracy. Advanced delivery reports enable you to analyze email engagement and make informed decisions from the data. While there are many different products available with exhaustive lists of features, sometimes having a solution that is streamlined for the Private Capital Markets is ideal.

Investors work with a variety of GPs—what does your firm do to create a better experience for investors to build trust and differentiate?

To be a top-tier firm, you must identify points in your fundraising process (and beyond) to build brand equity and personalize communications. With the evolution of the new normal, 50% of GP said they will hold more LP Meetings online, according to Private Equity International’s Covid-19 study. Virtual meetings can be promoted through investor marketing campaigns. Additional potential messages you can promote:

  • Information about past fundraising milestones
  • What you see in the market and have learned from those findings
  • Your firm’s investment focus and news about partners
  • Portfolio company performance
  • Suggested resources and publications for investors to follow
  • Announcements of upcoming webinars and events

Chapter 3: Why Use a Secure Engagement Portal

Documents and requests sent in a decentralized system like email get lost, and it’s not clear where ownership lies. Your investors see your firm as disorganized if you delay a response or process. Todd Haring, Partner & Head of Consulting Services at SteelBridge Consulting shares his take, “A secure engagement portal for LPs helps reduce the need for frequent, ad hoc communications and manual reporting previously performed by the accounting and investor relations teams.” Haring adds, “We are seeing a major shift toward enabling investors to participate in the workflow, or self- servicing, of often time-consuming efforts. These includes processes such as contact management for who on the LPs team should be receiving what information from the manager.”

A central portal to post Due Diligence Questionnaires (DDQs) and agreements, transmit and assign requests, and monitor progress solves many of the problems that result from decentralized file sharing.

Engagement portals offer an organized structure that creates clarity for investors and even gives you an opportunity to go above and beyond by giving secure access to reports and dashboards about track record performance.

Portal solutions available today, have built-in features that make processes super smooth. Look for a solution that enables your firm to:

  • Find and share documents faster, so your team can better manage investors’ questions
  • Adopt compliance standards to meet reporting requirements from investors and regulator
  • Upload video files of a new FAQ or annual meeting
  • Reduce duplicative work
  • Get clear reporting about who received or viewed your documents and other resources
  • Set up notifications to remind investors to complete their agreements and to let your team know when everything is signed
  • Allow users secure portal access across all devices

With a central system, you can capture all of the terms of the agreements, so you can search and reference them for future communications and fundraising activities. With deal-related agreements such as DDQs and Private Placement Memorandum (PPMs) stored in one secure place, your firm and investors can find the documents and information they need. Reduce the need to search through old email threads or an inefficient database system.

Tell The Story Without Doing it in Person

In the past, the success of a fund was partly dependent on the GP-LP relationship and alignment during in-person meetings. These meetings are now met with travel restrictions and pivoted to data delivery.
Arguably the most important part of any LP’s due diligence effort is a thorough understanding of your historical track record. Your firm can guide investors to recognize critical insights such as the performance of operating companies, geographical and sector analysis, and fund manager reports.

Like most firms, gathering the data to facilitate the insights above can take days, if not weeks, to accumulate and normalize. But with the right business intelligence tool, firms can pull data directly from various sources such as Excel, your fund admin, or a CRM system to deliver a visual and interactive dashboard to your investors.

Couple your data visualization solution with an email communication platform and a secure GP- LP Portal, and you’ve given your firm the competitive edge your investors want.

Once you’ve raised capital, 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.

Our next section will cover how to retain long-term relationships after fundraising.

We are seeing a major shift toward enabling investors to participate in the workflow, or self-servicing, of often time- consuming efforts.

Todd Haring, Partner & Head of Consulting Services

Steelbridge Consulting

Chapter 4: Retain Long-Term Relationships

In today’s competitive landscape, investors have plenty of choices. When you provide them with value, you earn their trust and loyalty. We’ve outlined the key ways your firm can build and maintain long and fruitful relationships with investors.

Develop Trust with Investors

Trust is fragile and takes time to build. To be a top tier firm, your firm should take a white-glove approach to this vital element of relationships and exceed your investors’ expectations whenever possible.

Here are three ways your firm can build trust every day:

Tell The Story Without Doing it in Person

You don’t have to be a mind reader but knowing what your investors need before they do is something best-in-class firms do as a matter of course. Successful firms make a habit of providing their clients with the latest market knowledge, industry information, and of course, timely reports on investments.

The key is to stay in tune with your client’s business, so you can provide additional value. Show them that you are paying attention to all of their needs—not just the ones inside your firm. It will set you apart.

Two-thirds of investors prefer to work with a manager with which they already have a relationship.

Two-thirds of investors prefer to work with a fund manager with which they already have a relationship.

Makes sense, right? If you’ve worked hard to manage your current investor relationships—earn their trust by anticipating their needs.
This will set your firm up to be well-positioned for a “yes” from investors when you ask them to be involved in the next fundraising opportunity.

Experienced firms use a predictive approach and leverage technology to share reports, fund information, and data.

Chapter 5: Final Thoughts

With the right technology, Private Capital Market firms will weather the post-pandemic storm with
visibility and anticipating investor needs.

With engaged investors, you have a happy partnership. Over time this leads to repeat investments. When you enter the fundraising stage again, you’ll be halfway to close if you provide excellent service.

The best way to stay in tune with your client’s business and where their other investments are is leveraging technology so you can provide additional value and set your firm apart.

Service is all about providing an outstanding experience to your existing investors, so they’ll want to do more deals with you. As we’ve outlined, if you’re as transparent as possible, tailor communications to preferences, and use every chance to provide added value, you’ll attract and build successful relationships with investors for years to come.

If your team is looking to digitize, but don’t know where to begin, start with our Data and Technology Guide.

Or if you’re in the process of adopting technology across your organization and looking for guidance on how to manage and increase your deal pipeline, download our guide, Winning Deals in a Hyper-Competitive Market.

Altvia is a market-leading provider for CRM and investor & deal management systems specifically built for Private Capital Market firms. Founded in 2006, Altvia has hundreds of world-class clients and supports over 40,000 LP investors. The company’s mobile-optimized platform (AIM, ShareSecure, Correspond, and Answers) is transforming the way GP’s deliver continuous value, real-time decision support, and secure communications to their valued constituents. Marquee firms across multiple verticals including IVP, Livingbridge, Tailwater Capital, and RCP Advisors trust Altvia to optimize operational functions and enable critically important communications.

LFM Capital

Private equity technology is changing so quickly. I feel really good that we are now on Altvia and Salesforce because I know that we can add more tools and applications over time very efficiently.

Jessica Ginsberg, Director of Business Dev

LFM Capital

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