DiligenceVault recently attended Private Equity International’s Investor Relations, Marketing & Communications Forum 2022 in New York, where we had the opportunity to speak and listen to many leading private equity IR professionals. There were a number of insightful topics and conversations to be had around the current fundraising environment, how IR is managing ESG data requests from investors and how GPs can best present themselves to LPs. Some notable takeaways:
1. Both GPs and LPs are as busy as ever, with as much as 50% more meetings than pre-Covid days as hybrid (in-person + virtual) meetings have become the norm
2. LPs are asking for more information from managers, with those requests being more and more customized, ad-hoc, or event-driven – driving the need for GPs to create more content for LP engagement – both pre and post commitment. Leveraging technology has become an important factor in developing operational efficiencies to address these additional workloads for IR teams.
3. The fundraising environment has become difficult with re-ups no longer guaranteed. Performance is good across the board, so IR teams need to find new and creative ways to differentiate including:
a. Being hyper-responsive to LP requests
b. Externships with LPs
c. Developing more educational content for investors
4. When presenting to a prospective LP – whether in-person or virtually – be prepared and have a strong command of your message and the content you are sharing. Ask questions of the prospect and be able to understand how you can potentially solve their particular problems.
5. LPs are asking a tremendous amount of questions of GPs around their ESG and DEI efforts. Not every GP is going to have every answer to every question but LPs understand that. The important thing is to continuously grow and evolve your ESG/DEI efforts over time, rather than trying to be perfect today. Investors understand the industry as a whole is trying to take steps forward with these efforts and it will take time.