Private Equity Tools to Build Trust with Investors

There’s no question that private equity is booming. Investors have allocated more capital to this space over the past five years than at any time in history, according to Bain & Company’s Global Private Equity Report

In addition, Pitchbook reported that a remarkable 23 startups have earned unicorn valuations in one recent year.

At the same time, deals are becoming more complex and the Securities and Exchange Commission (SEC) is tightening regulations. Naturally, this calls for greater scrutiny before deciding to invest. 

 For limited partners (LPs), transparency has become critical to their decision-making process. Before investing, LPs demand an understanding of how the data supports higher-level calculations and how it will impact their investments. 

As a result, LPs expect companies and investment funds to disclose more detailed information, including the nature of their investments, compensation to their managers, liabilities, overhead costs, and investment performance.

It’s no longer enough to simply use private equity tools to put together a nice-looking report with pie charts and bar graphs. These days, the success of your business depends on understanding the impact of the relevant data—and sharing it openly with all stakeholders involved. After all, if you don’t, your competitors surely will.

How to Build Trust with Investors

As LPs demand more transparency, many private equity firms are adopting technologies that give them the capabilities to organize, track, and present insights from the huge amount of data available. A well-designed platform can help you track where you are in the fundraising process and easily communicate status updates to investors.

If you’re putting together monthly or quarterly updates,  a purpose-built platform for private capital gives you the power to share documents securely and provides visibility into how often your investors are accessing the information. 

Even better, it can help you automate reports and communications so that your investor relationship tasks—as important as they are—don’t take up so much time.

Preparing to Implement a Private Equity Tool

Of course, the critical first step before adopting a solution is to determine the information that is most important to you and your investors. This typically is not all information, of course. So, with that list in hand, your firm can create a process to collect the relevant data—whether it’s financial or non-financial—and build it into the tool.

It’s also worth noting that members of the C-Suite consider transparency critical. According to Deloitte’s Effective Investor Relations (IR): Lessons from the Trenches:

“In our case, management is executing on a five-year turnaround plan….and helping investors understand what the milestones are and what they can reasonably expect along the way is incredibly valuable,” says Rob Binns, former VP of Investor Relations at Hewlett-Packard, who now serves as CFO and VP of HP Software. The feedback from investors, he adds, is that “they welcome an honest, straightforward story—they don’t want to be sold to, they don’t want to be spun to.”

Tools Designed for Private Equity

Altvia has developed advanced data and technology solutions specifically for the needs of private equity firms like yours. Our CRM combines the Salesforce platform with an email marketing tool to provide clear, secure, and easy-to-understand reports and communications to LPs.

The combined solution delivers advantages both for your clients and for you. Create an exceptional LP experience and support strong relationships while lightening your team’s workload.

LP Experience
investor relations
Search
Webinar

Tuesday, February 27th | 1:00PM ET // 10:00AM PT

Join us in our upcoming webinar, “The Power of Unified Data: Creating a Competitive Edge,“ to hear industry experts delve into the significance of data in private capital markets.