The three commandments of web reporting

By now, most LPs are downloading their quarterly reports off the web (those that aren’t are most likely requesting hard copies of their capital calls be mailed to their retirement home in Florida or Spain). Many firms have some variety of web-based reporting system in place or are plotting one in the near future. The drive toward online reporting has naturally led to a mob of service providers for GPs to choose from, and a dizzying array of options in designing these sites.
The best way to choose a vendor and a design is to take a step back and remember these sites are still only a means to communicate with the LP, and their effectiveness should be judged by the quality of that interaction. The first and most important commandment (more details are below) in setting up these systems is to know your LPs; poll for their preferences, soft launch the site to a few for feedback, and finally, monitor their usage of it. Next, firms should link their systems to whatever CRM (customer relationship management) system they use to insure that the site has the most up to date LP contact data, and that they can easily send emails concerning new postings. The third and final commandment is to know the limitations of the system. These systems make the information available, not necessarily understood. That responsibility still falls on the shoulders of the GP.
First commandment: Know thy LPs’ preferences. For those firms plotting their first web reporting system, it’s best to chat with a few investors first, as chances are, they’re already using some system and have preferences or recommendations from their own experiences.
However, GPs should be careful to talk to the right person within the LP’s organization. “The LP that arrives at the annual meeting may share what their priorities are for what data gets posted,” says Tom Kerr of the Pennsylvania-based Hamilton Lane, “But our data manager actually downloads the info from these sites and they’re going to have a far more sophisticated opinion of what makes a top notch site.”
If there’s a wide range of opinion in terms of what should be posted, Kerr suggest erring on the side of more information with the flexibility in what to download: “By servicing the highest-maintenance LPs, you’ll find you’ve addressed the rest of the investors as well.” After polling a few LPs for their preferences, several service providers suggest a “soft launch” of the site, where a few investors test the site and share their thoughts. “This allows some further refinement before you launch to the entire investor base,” says Krassen Draganov, the CEO of Netage, a service provider that offers the InvestorDynamo Online Reporting system.
However, gathering feedback on the site should be an ongoing process, and fortunately, many systems facilitate this by tracking which user downloads what. “We believe we have an effective communications strategy, which we are continuously re-evaluating based on LP feedback and what’s being read on our site,” says Karla Popper, VP of investor relations at New York-based CCMP Capital Advisors.
Second commandment: Link thy system with thy CRM. “The time-savings generated by moving from paper-based reporting to online reporting are enhanced when the portal is integrated with your CRM software,” says Draganov. “Duplicate data entry is eliminated, and the ongoing maintenance of both systems is simplified.”
Shannon Dolan of SunGard Investran notes that the CRM data should be updated before making any efforts
to feed it into the reporting system. “If your contacts aren’t current or organized, that can slow a launch, and more importantly dull the system’s effectiveness.” Many IR directors use the CRM to send out emails when new items are posted on the site, noting the time saved by fully integrating the two.
Third commandment: Know thy system’s limitations. Whatever ease or efficiency such systems bring, LPs and IR professionals agree that its value is only complementary to old stand-bys of phone calls, emails and meetings. “We don’t rely on the system exclusively, just sending emails to announce a new posting,” says Jim Rutherfurd, managing director of IR at New York-based Veronis Suhler Stevenson. Rutherfurd explained that in some cases the adoption of so many web reporting systems had become a burden on LPs. “With so many different login sites, LPs are left to manage dozens of passwords, so in certain cases we end up emailing quarterly reports to select LPs.” As much as web reporting may save time and grant LPs greater convenience, the only real rule governing these systems is that they are only as useful as their audience, the investors, find them to be.