by Joseph Campbell, PEF Services and Mark Heil, PEF Services
The fashion world will tell you that a staple of every business person’s wardrobe is a blue suit. With it, you are “dressed for success”. To impress an investor, you need to don your best: solid returns, sharp marketing materials, state-of-the-art technology, smart investor relations and a strong back office.
A portal should be a staple of a fund’s investor relations program. The mere presence of a portal connected to your website tells investors that you care about them and are up to speed on industry best practices.
While portals were initially valued for their security, limited partners have now come to appreciate their convenience, efficiencies and accessibility. “I love investor portals because I can easily find the materials I need; otherwise, I’m slogging through the knee-high pile of documents on my floor or suffering under the tyranny of Outlook’s “search” functionality to find what I need,” says Chris Douvos of Venture Investment Associates, a fund-of-funds with $1 Billion in AUM.
In today’s competitive environment, when a record number of PE firms are seeking capital, it is important for firms to align with the needs of their investors. Firms without a portal look out of fashion and behind the times.
“During fundraising, being able to offer a high-quality investor portal helps reassure potential investors and gives them confidence that they will receive timely, transparent information when they invest with us,” notes Frank Galioto, Partner at McNally Capital, an advisor to over 350 family offices and a manager of a private equity fund-of-funds.
The portal should be an extension of your firm’s client relations program. It should be connected to your webpage, have your logo and use your colors. It should not be an advertisement for your vendor, but help your fund build your brand and investor loyalty.
Some portals do more than just offer secure access. They have workflow features which create efficiencies, provide quality control and track activity for compliance. For instance, they may help the fund manager automate the distribution of documents into the right folder. It can also be set up to require a quality control review process be conducted prior to the documents becoming visible for the investor. While the workflow features may not eliminate every error, it certainly decreases them, leading to a more harmonious relationship between our clients and their investors.
Portals are not just important to large institutional investors. High net-worth individual investors and family offices often have multiple advisors (investment advisors, tax accountants, lawyers) that need access to their investment information. These individuals can be permissioned to have access to the information within the portal. When the relationship ends with an advisor and starts with a new advisor, the permission to the old advisor can be easily terminated and created for the new advisor. Plus, the new advisor will have access to all the current and historical data.
Portals can also help fund managers to manage the fund. For instance, fund managers can learn who has viewed their K-1s, the latest capital call or, prior to a distribution, updated their banking information. The portal can also store key documents for a fund’s auditors and tax preparers and eliminate multiple people at those firms requesting the same information.
Portals also help keep funds in compliance with State and Federal Government which are passing laws to raise the standard for safeguarding investor information. Recently, the Commonwealth of Massachusetts passed an investor privacy law to help protect investors from having their confidential information included in an insecure e-mail. More states are expected to pass similar laws.
At PEF Services, we know it is our job to make our clients look good to their investors. In this highly competitive fund raising market, strong returns with a high level of service can give a fund the edge it needs with investors. We designed our portal, the Investor Library, to not only be eye-catching to investors, but functional and efficient for our clients. The Investor Library distributes key investor information in an efficient, secure and investor friendly manner. Our workflow technology largely eliminates embarrassing and costly errors. If you would like a demonstration of the Investor Library, contact us.