In the good old days of private markets fundraising, investors, competing for allocations, would flock to the relatively small number of fund managers, their access to information on the fund and manager tightly controlled by said manager. And all was well with the world.
While some managers still engender this kind of feeding frenzy (you can sometimes spot them by their terms and conditions), for most, it is not the case.
As a response to this new environment, where managers have less control over what investors look at, something interesting started to happen: fund managers began setting up proper websites; they appeared on social media (and not just LinkedIn); they started to voluntarily provide information on their activities to data aggregators and, heaven forfend, the press. "Which is great", you expect me to say - and it is, as long as you, dear fund manager or adviser, have properly thought through what this means.
In a world where LPs conduct their own, self-directed research, fund managers have to do a better job at presenting their right to exist (https://www.mjhudson.com/newsletter/the-goldilocks-principle/ ) and they only get one chance. There is no right to reply. No discussion. No opportunity to develop a point or correct a misinterpretation, regardless how potentially damaging.
To shed some light, we are currently running a study on GP and LP expectations around communications and brand.
Responses will be reported anonymously and in aggregate and the 100+ respondents who have shared their views so.
We are confident the full results will make for interesting reading. Indeed, some of the preliminary findings are already fascinating:
- although the vast majority of GPs know that LPs visit their websites, fewer than half are tracking these interactions (and, presumably, fewer are doing anything about it);
- the majority of GPs already accept that LPs use LinkedIn (both company pages and personal profiles) to research them and their team, and that social media will grow in importance for alternatives in the coming years;
- although 100% of participating LPs, so far, consider an online investor portal a MUST, only just more than half of GPs have implemented one; and
- of those LPs that declared a preference, two-thirds wanted GPs to post more on social media - more than half of LPs think social media is a good way to get the know the personality of a fund manager.
Originally published January 15, 2021
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