Improving the investor reporting process – CFOs & COOs Forum 2021

The pandemic caused a major increase in reporting demands for firms, but that demand resulted in greatly improved processes.

Firms have shifted from emails to using portals to inform limited partner clients of capital calls and general investor information, and it has greatly improved the production and flow of information for clients, said panelists at the CFOs & COOs Forum Wednesday.

The covid-19 pandemic placed some unusual information demands from LPs on their GPs, the speakers said. For a time, everyone seemed to want constant updates on how covid was affecting their portfolio companies.

That led some of the panelists to go through their holdings and assign a risk rating red, yellow and green to each of their holdings in each of their funds. This way the clients could quickly access the problems in six key sectors including health and safety, strategic and investment impact.

In the field of best practices, the panelists agreed that it is important for firms to operate from one data lake or template that would act as the “source of truth” for each fund. The aim: consistent messaging. GPs should avoid giving different answers to the same question at all costs.

Another panelist talked of developing an information template and adjusting the template based on the frequency of customer requests. The advantage of the template is that it can be reviewed and examined by all tiers of an organization.

The general feeling at the panel was that there is increasing demand for two types of information: standard information and bespoke or custom requests. Processes had to be in place to handle both types of requests promptly.

One panelist said that his firm aims to turn around LP client requests within 24 hours, admitting that it was not always possible.

Another speaker spoke of establishing an investor reporting group made of representatives of the deal, IT and client services teams to plan steps and processes to deliver the information to clients. Such a firm-wide effort helps to collapse the silos of information that spring up. The object, the person said, is to spread knowledge and understanding across the institution.

Other firms recounted great success when they pre-recorded and posted their annual meetings and held Zoom meetings for their committees. Two funds reported more viewers of their virtual events than attendees at the normal on-site events. Noting the incredible efficiency of virtual meetings, funds are now looking for some way to combine both on and off-site elements.