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In the private equity space, investor portal technology is quickly becoming the norm for managing communications and investor reporting challenges between general partners and their investors.
In this article we breakdown the benefits of investor portals, explain the common challenges that IR teams face when dealing with investor relations, and detail how Allvue’s investor portal software solution is de-risking and streamlining investor communications.
WATCH: A 2-MINUTE DEMO OF THE ALLVUE INVESTOR PORTAL
In today’s fast-moving and tumultuous market environment, it is essential that portfolio managers develop an ongoing communication plan between themselves and their investors. Managers must be proactive in reaching out to their investors and ready to quickly and accurately respond to any inbound inquiries. How that information is transmitted between GPs and LPs, though, is another story.
The default tool most GPs turn to is, of course, email. But, obviously, for LPs this is less than ideal for a number of reasons. It’s not uncommon for a pension fund to have 50-100 private capital GPs in their portfolio on which they need to track and report. For investment consultants, that number can easily be 10 times that. With an inbox full of letters, updates, statements, agreements and the like, the onus is put on the LP to manage their GPs’ communication and it is, to say the least, significant.
But what if a GP could employ a private equity reporting tool that not only helps them organize their investor communications but also helps their LPs in doing the same? This is the promise of an investor portal.
Our survey of CFOs showed that over two-thirds of GPs surveyed use an investor portal to manage LP communications for a variety of reasons. But, clearly a few reasons rose to the top.
The efficiencies GPs gain by using an investor portal are significant. Portals can help GPs to save time and resources by automating many of the tasks associated with managing LP communications, such as sending out reports, tracking document requests, and managing questions and follow ups. This, subsequently, can free them up to focus on other vital tasks, such as sourcing and executing investments.
Cybersecurity is a massive issue today for companies of all shapes and sizes, but the significant capital that flows through private equity attracts special attention.
In fact, it is estimated that the average mid-market private equity fund grapples with over 10,000 cybersecurity attacks per day.
By moving sensitive information out of email, GPs can significantly increase their cybersecurity and better protect their LP’s data.
Now more than ever, LPs are requesting access to detailed reporting and information. Some portals, if equipped with the functionality, can allow LPs to directly access data, allowing them to run their own reports and analysis. This benefit is two-fold. For one, it obviously reduces the workload on the GP. But just as meaningfully, it increases transparency – and thus builds trust – with LPs.
An investor portal provides a centralized location for LPs to access all relevant information, such as performance reports, investment updates, and financial statements. Seeing the data clearly and openly collected helps to improve transparency and accountability, while reducing the time GPs must spend fulfilling requests.
If the investor portal solution integrates with the other tools in a GP’s tech stack, fund managers can significantly streamline their processes and reduce errors. They can connect their accounting technology with their portal to seamlessly initiate capital calls or to send out statements leveraging a single-source of truth data, without having to worry about duplicate entry and the time-consuming, fat-finger errors that often come with it.
Another advantage of LP portals is the visibility they give GPs in knowing which investors have accessed information that’s been shared and when.
If, for example, you are in the process of calling capital, it would be critical to make sure that every investor has seen the communication, particularly if under a time constraint. Knowing which investors have read the communication and which haven’t can help IR be more proactive in getting sign offs and following up. Such visibility into LP interaction with posted information can be invaluable for IR teams and will make investor management significantly easier.
LPs enjoy many of the same benefits from investor portals that GPs do as well as a few others:
Overall, investor portal technology offers a number of benefits for both GPs and LPs. But, of course, those benefits – for both GPs and LPs – can only be achieved if the underlying technology offers certain features, such as:
Allvue System’s Investor Portal software solution combines the best of all worlds: highly configurable, feature-rich dashboards, the ability to securely share K-1s, notices and other documents, and best-in-class LP communication tools to allow your investors to update their information directly in the system.
Our Investor Portal has a handful of distinct features that set it apart from the competition:
Reach out today to learn more about our stand-alone and fully-integrated investor portal options, and to find out why Allvue’s Investor Portal is already accessed by over 90,000 users from the world’s leading institutional investors.
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