GPs today have to respond faster to investment opportunities, meet expanding investor and regulatory demands, and cater to growing internal and external expectations for visibility and access to data.
To understand what GPs are doing to address these challenges and build stronger investor relationships, we worked with Benchmark Research Partners to survey 97 executives representing a cross-section of U.S. private investment firms in May 2022.
We uncovered four key insights from our findings:
1. Transparency is key to strong investment partnerships
Increasingly tech-savvy investors have come to expect detailed, frequently updated information on their portfolio and prospective investments.
When asked which factors are critical to successful investment partnerships, transparency and visibility into partnership information topped the list of the GPs we surveyed. This was closely followed by other factors that support transparent investment partnerships.
2. GPs use technology to manage investor relationships
Strong relationship management has always been a cornerstone to building successful private investment partnerships. In recent years, the industry has shifted toward an increased adoption of technology to better manage investor relations.
Today, a majority of GPs use a CRM system to keep track of investor profiles and interactions.
Jerry Cain, Managing Director at Slate Asset Management, shared what a CRM did for their organization:
“We work with thousands of institutional investors and need to not only keep up with and track our day-to-day interactions with them, but understand what trends are emerging. With Juniper Square’s CRM, we’re able to look across our customer base to gather insightful data to improve our capital-raising process.”
3. Vendor selection is critical for technology success
While most GPs are using technology to build stronger investor relationships, many have experienced software deployments in the past that failed to meet expectations.
The most common reason software deployments failed to meet expectations? Capabilities were overpromised and underdelivered by some vendors.
This underscores the importance of checking references and customer reviews when evaluating a technology vendor.
Related: Juniper Square success stories
4. High-performing GPs share data (more) freely
While our survey covered investment firms of all sizes, analysis revealed some common patterns among “Growth Multipliers”—sponsors with high AUM growth (>20% YoY), high rates of repeat investors (>90%) and high rates of new investors coming from referrals (>90%).
Overall, this research signaled that the industry is moving towards digitally-enabled transparency. GPs embracing this trend today are seeing a measurable competitive advantage over late adopters.