At our inaugural U.S. Leaders in Private Markets Summit in New York City, Sadrack Belony, Head of U.S. Investor Services at the Aztec Group, hosted a session with industry experts on how GPs could turbocharge their investors’ experience.
We were joined by experts from across the investor services spectrum, who shared their insights into optimizing the investor experience though well drafted fund documentation, standardised reporting, regular, transparent communications, and up-to-date technology.
The panel was made up of David Greene, Partner at Simpson Thacher & Bartlett LLP, Neal Prunier, Managing Director, Industry Affairs at Institutional Limited Partners Association (ILPA), Eran Fabian, Managing Director, Americas, Bite Investments, and Gabi Peic, Head of Marketing and IR, ATL Partners, and together we explored the changing LP/GP dynamics, and how communication, technology and collaboration between LPs and GPs is key to developing the best investor relationships for managers.
1. The age of data-driven trust – LPs are demanding not just transparency but timely and actionable insights. As ILPA’s Neal Prunier said, “sunlight is the best disinfectant.” GPs need to go beyond basic reporting and build trust through proactive communication and data sharing. It’s no longer enough to say, “Here’s your annual report.” LPs want to know, “What’s happening now, and what’s next?”
2. From capital providers to strategic allies – the days of LPs simply acting as check-writers are gone. LPs now want to input into the fund’s strategy, to drive environmental, social and governance (ESG) initiatives, and generally partner with GPs on a deeper level. This means GPs must align with these broader goals and engage in genuine partnerships.
3. Pressure on operational efficiency️ – LPs are now more discerning about the operational infrastructure of GPs. They’re asking detailed questions about risk management, compliance frameworks, and tech integration. This is a great development – it’s pushing service providers toward better standards and more resilient investment models.
4. Adapting to market volatility – the economic shifts of recent years have heightened LPs’ focus on risk mitigation and strategic allocation. For GPs, this means being more agile, transparent, and equipped with strategies that can pivot with market conditions.
1. Deliver clarity and certainty for your LPs through well drafted fund documentation – this includes drafting and negotiating the Limited Partnership Agreement (LPA) and other key fund documents, ensuring clarity on strategies, fees, and governance, and aligning the interests of LPs and General Partners (GPs). Tailored terms and side letters can accommodate specific requests and address unique concerns, while robust procedures for capital calls, distributions, and clawbacks support smooth and efficient operations.
2. Keep investors informed on performance in line with best practice – maintain transparency and trust by adhering to reporting standards, providing timely and actionable insights, and going beyond basic reporting to build trust through proactive communication and data sharing. Investors want to know not just the annual performance but also what is happening now and what is next. This proactive approach helps in aligning with investors’ broader goals and engaging in genuine partnerships.
3. Build and maintain LP trust and confidence through IR – effective communication and strategic alignment includes communicating with new potential LPs for the first time, ensuring that the GP’s IR team liaises with LPs rather than the deals team, developing a strong working relationship between the two teams. It’s important to communicate using language that both parties understand, as terminology can differ between GPs and LPs. Additionally, different profiles and generations of investors may engage through different channels, so it is crucial to adapt communication methods accordingly.
4. Enhance the investor experience through technology – technology now allows for seamless investor onboarding, providing information on demand through portals, and ensuring an end-to-end investor experience. Technology integration helps in building a world-class operational infrastructure, increasing reliance on specialized service providers and outsourcing, and powering it all through seamless, integrated technology solutions. This approach not only meets the growing expectations of LPs but also helps in maintaining a competitive edge in the market.
Keeping investors informed with timely and actionable insights, while building and maintaining trust through proactive communication, and enhancing the investor experience with advanced technology provides a foundation upon which to build long-term, mutually beneficial partnerships. For investor relations teams a holistic approach that encompasses fostering transparency, trust, and strategic alignment is pivotal to success in a market where best-in-class partnerships are replacing service providers.
To discuss any of Aztec’s ‘top gun’ solutions to deliver excellent investor services, please contact Sadrack directly.
To discover for yourself what makes us the bright alternative and how we can support, please contact Sadrack Belony, our Head of Investor Services.
