4 Key areas Investor Relations teams are looking to prioritize in 2019.

From June 19-20, over 300 Investor Relations professionals came together at Convene in Midtown Manhattan to network and talk about the trends and technologies affecting their Investor Relations team and Alternative Investment firms.
 During the event, Altvia CEO, Kevin Kelly had a chance to moderate “Fundraising campaign management: sharing war stories” with panelists Michelle Daubar, from Oak/HC/FT, Laura Fahrney, from Ridgemont Equity Partners, Kathlika Fontes, from Grain Management and Tailwater Capital’s, Lindsay Grider.

Throughout the two days, there were a few consistent themes that our team heard that we wanted to share with those who may not have been able to join us at the event.

Investor Relations Teams are the Glue of the Modern PE Firm

Positioned between the teams running investment sourcing and portfolio monitoring and leading the charge on fundraising and managing LP communications makes the Investor Relations team the conduit for the day-to-day activities of the firm and the messaging to the investors. Limited Partners today do not want to receive reports or metrics on fund performance directly from the deal teams. And with performance across the board hitting new heights, investors are increasingly more interested in hearing both more specific metric performance as well as information beyond the numbers. The Investor Relations team has the ability to translate the holistic message around the firm differentiators as well as build that custom investor communication plan.

Fundraising Never Stops

The formal capital raise is getting shorter and shorter with 56% of those seeking capital being closed or over-subscribed within 2 years¹. However, much of this seemingly reduced timeframe is matching with increasingly longer pre-market programs and informal relationship building to keep the LP relationship tight and the same investors in subsequent funds. The amount of travel and high-touch investor relationship building that occurs to keep the conversations strong and engaging has increased exponentially. As the one-panel member said, “I don’t know when I’m not fundraising.”

Left to right, Kathlika Fontes, Kevin Kelly, Lindsay Grider, Laura Fahrney

ESG is more than a trend. It’s a movement.

Bubbled throughout the different panels, and primarily driven by European investors, environmental, social and governance (ESG) is a theme that can no longer be ignored but is still nebulously defined to many firms. Reporting or requirements on ESG were once held to side letter agreements but are now part of core due diligence documentation. Coupled with an increased goal of diversity in management, hiring, and promotion within the firm, the conversation about portfolio performance has widened to include these indirect factors of value beyond IRR.

More Technology Doesn’t Mean Better Technology

The proliferation of products to solve LP document sharing, data management, and cross-firm reporting issues has not slowed down with firms increasingly determining that they have to move beyond simple CRMs and Excel to be successful (read 10 Reasons Why Using Excel for Fund Management Doesn’t Work). However, the answer is not simple with leaders trying to decide on needs ranging from all-in-one encompassing solutions to one-off programs that handle specific tasks. That, coupled with the increased reporting requirements from LPs and the above trends of high-touch investor relationship means the pain point of how to do this efficiently for the Investor Relations team is coming more to the forefront. IR teams also acknowledge that many systems are not built for their function, but rather for the deal teams who have a more surface-level need for managing data around contacts, companies, and funds. However, the IR leaders acknowledge that since the LP relationship lives with their team, they are becoming more of the conduit and need a seat at the table when determining the software that the firm relies on for success.

 

How is your firm looking at these trends? Let us know.

 

SCHEDULE A DEMO

  1. https://www.bain.com/contentassets/875a49e26e9c4775942ec5b86084df0a/bain_report_private_equity_report_2019.pdf
  2. https://www.forbes.com/sites/georgkell/2018/07/11/the-remarkable-rise-of-esg/#73184ee41695