Limited partners (LPs) are becoming more risk-averse and demanding increased transparency from the general partners (GPs) with whom they work. In turn, GPs recognise the value in strengthening their relationships with LPs, and are more open to using technology to provide LPs with a seamless experience. Angelica Tigan, Director at BlackRock and Global Head of Business Development for eFront Investment Café, discusses the impact that the pandemic has had on LP/ GP relations, as well as recent developments in investor relationship management tools.
During the current pandemic, how has the use of technology evolved when it comes to private equity investor relationship management?
We have observed a shift in the way GPs leverage technology to keep their clients loyal. Our analysis has shown that 75 per cent to 80 per cent of our clients are currently using an investor portal to share analytical data related to the funds’ performance with their investors. This compares to 60 per cent of clients who used this feature pre-pandemic.
Technology now plays a key role in the way GPs relay performance indicators and more extensive data points to their investors; this trend is expected to continue into the future. The investor portal space is moving away from simple document-sharing tools to fully-featured platforms for running a firm’s investor relations throughout the fund lifecycle.
Investor onboarding and an investor self-service offering are becoming a requirement, along with the ability to sync across multiple systems. This structure provides administrator users with seamless processes while end-users get a fully customised and interactive experience. Our GP clients increasingly rely on standard templates and preconfigured dashboards, which will allow them to share fund performance and risk exposure with their investors easily.
As disclosure and transparency become more important, how can GPs overcome the difficulties caused by not meeting in-person?
GPs have been under pressure to bolster their investor relations in an increasing environment of disclosure and risk focus, as well as to overcome the physical distance caused by the pandemic. Due to the absence of business travel and face-to-face networking opportunities, GPs are leveraging technology to a much greater extent for their fundraising activities.
Being able to market their services online has become exponentially important, and technology that can service the fund’s full lifecycle has now become vital. Our clients have shifted from using basic tools like email and data rooms to using fully-fledged fundraising portals with investor onboarding, marketing and newsrooms, reporting, data collection, and due diligence capabilities.
What are the primary benefits of leveraging sophisticated investor portal technology?
The obvious advantage is a streamlined and expedited fundraising process. Fully outsourcing implementation, maintenance, and support means clients save a significant amount of time and resources. This is beneficial throughout the fund lifecycle, not only for fundraising and onboarding but also for investor reporting.
Additionally, data security is becoming a top priority. Although the influx of new fintech vendors on the market is driving technology prices down, these lower-tier platforms could come with less secure and stable infrastructure, as well as limited support and sync capabilities. For this reason, clients are choosing more advanced investor portals that are secure, stable, and come with adequate support services.
How do managers go about choosing a provider or portal?
When selecting a partner in this space, managers must be highly cognisant of their chosen platform’s level of security of standards and the certifications it holds. They need to make sure it is SOC 2-certified and has its ISO 27001. The platform’s support team availability is also critical. Beyond the demo and visual appeal, other factors such as implementation, capabilities or maintenance, and support are even more important.
Some managers may prefer to build their portal in-house. How could they decide whether an outsourced route is more appropriate?
Larger GPs often need to decide whether to build investor portal capabilities in-house or to outsource this task. There are a few factors to consider. Building in-house often comes with a seven-digit initial budget and very high annual costs for maintenance and development. Further, from a data security point of view, if the platform is hosted on the GP’s premises, that creates additional risk. Also, by the time they complete the build and deploy their system, these products are often semi-outdated.
Professionals often complain about having to copy-paste data from a client relationship management system into a portal or from their accounting platform into the portal. Having one integrated technology stack platform helps mitigate this inconvenience.
What differentiates your solution?
The eFront Investment Café solution can be used stand-alone or be fully-synced with any third-party application. This means it is flexible enough to cater to a smaller fund manager that only requires a portal, as well as a larger investment house that uses various technology solutions and third party tools.
eFront Investment Café addresses security or support concerns as a SaaS solution with a minimum of five releases per year. As a white-labelled solution, it allows GPs to tailor the portal and customise content to promote their brand. Additionally, we partner directly with fund administrators to include the Investment Café portal as part of their offering, thus providing their GP clients with a fully outsourced, hassle-free fund administration experience.
Angelica Tigan, Director, Head of Business Development Portals at BlackRock
Angelica Tigan is the global head of business development for the eFront Investment Café solution at BlackRock. She has been with the firm since 2017, when she established and currently manages a business development team focused on the investor portal offerings. Angelica has cumulated 10 years of experience in the fintech space and seven years in retail and private banking.