Limited partner (LP) reporting requirements are a constant and important topic in the capital markets industry. LPs themselves leverage investor relations and investment management software to see an in-depth overview of every deal in their pipeline. Cloud-based software is useful for LP investor relations professionals who manage multiple deals at once and rely on data to help them strategize and make decisions on future investments.
According to a recent study conducted by Private Equity International, the “frequency and volume of information flowing from portfolio companies to GPs and from GPs to LPs have noticeably increased during the pandemic… [D]igitalization has and will continue to play a major role in providing transparency across the spectrum and help further strengthen LP-GP relationships.”
Maintaining a strong LP-GP relationship critically impacts a fund’s success. In this article, we’ll discuss how fund managers can upgrade their communications with LP investor relations professionals using an investor communications platform and investor reporting software.
Investor Reporting Software Tracks the Status of Investments
Communication is crucial when working as a fund manager, especially when the LPs the firm works with require constant updates on the stages of their active deals, the status of ongoing negotiations, and due diligence performance. DealCloud, an investment management platform, was purpose-built for professionals who need to be able to communicate their investments’ status in real-time — from wherever they’re working.
Using the Firm Pipeline dashboard (shown below) in the DealCloud mobile app or desktop application, professionals can track the status of each investment and see an overview of active deals filtered by stage (inbound opportunity, preparing for screening, investment recommendation, and more). If an LP or investor relations professional wishes to understand the fund’s deals by type (fund investment, co-investment, real asset, direct investment, and partner deal), they can easily zero-in on that information. This dashboard also allows professionals to prioritize their current deals as well as strategize and communicate future investment plans.
DealCloud Firm Pipeline Dashboard
To further break down this data, simply click on any section in the chart. An interactive table will appear, flushed with real-time information for each deal, including deal type, fund manager, country, investment amount, open date, deal lead name, and the deal team members. This may be particularly useful for a professional who, for example, is interested in seeing the total investment amount in the Final Approval Obtained stage, or who wishes to communicate to an LP investor relations professional which deals are impending. These widgets feature smart calculation capabilities, so it’s easy to see total invested capital, allocated capital, and other important figures on the fly.
LP Relationship Management
In addition to data provided for each deal, fund managers can also track their recent interactions with LPs in either the My Coverage dashboard or the LP Interactions dashboard.
The table (shown below) in the My Coverage dashboard is particularly helpful not only to evaluate your to-do list but also view the email addresses and phone numbers associated with listed contacts. This helps professionals quickly access the correct contact information and avoid sending highly confidential files or data to an incorrect email address.
Tier 1 Not Contacted Table in the My Coverage Dashboard
The Investor Communications Platform Relays and Organizes Essential Data
Limited partner investor relations professionals require vast amounts of data. Purpose-built, cloud-based software helps fund management professionals organize their data and generate valuable reports and other on-demand insights for their LPs.
For each active deal type, you can create a custom Pipeline dashboard (shown below) that automatically refreshes when you update information within your active deals. The software includes a visual dashboard for each deal type (fund investments, direct or co-investments, real assets), and can be organized based on the unique needs of each deal type. For example, a table that shows a breakdown of different strategies (credit, buyout, and or other) may be useful for fund investments; conversely, for direct or co-investments, it may be useful to see a table that shows a breakdown of the different industries (for example, consumer, health care, industrials). This is extremely useful as LPs often require updates and information regarding transactions on a short timeline.
Custom Pipeline Dashboard
These individual dashboards are not only shown at a granular level; all this information, across all deal types, is also summarized and collectively shown in the Firm Pipeline dashboard.
In addition to reviewing the data of active deals, it’s important to review information from declined deals to understand why those deals weren’t closed. Users can create a custom dashboard for their Declined Deals (shown below), which breaks down passed or declined deals by reason (bid rejected or lost, competitive process, price- or risk-reward) and month. Filtering and reviewing declined deals by month helps reveal any historical trends for certain months or seasons. This dashboard also helps professionals review any comments or action items on each of the listed declined deals and helps them communicate this activity back to LPs, even if the deal didn’t actually close.
Custom Declined Deals Dashboard
Investor Relations Requires Transparency
Today’s LPs require on-demand access to complex reports and custom dashboards. Generic CRM platforms simply can’t address the need for real-time data at every stage of the investment lifecycle because they were built for a different business model — one that doesn’t consider an LP’s complex relationship, deal, and funding structures.
DealCloud investor reporting software provides LPs a detailed overview of their deal pipeline, the end-to-end lifecycle of their deals, and all associated real-time data connected to those deals.
DealCloud was built for the complex transactions that LPs execute every day. No matter your unique needs, our core software, integration layer, and third-party data streams — with the assistance of an expert client support team — will help ensure your firm’s success.
To learn how DealCloud can support your limited partnership, schedule a demo.