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Investor relations teams attract LPs

The presence of an IR team at a firm could sway an LP’s decision to invest with a GP, according to advisory firm Stevenson James.

More than half of limited partners believe investor relationship management should be handled by a dedicated team to avoid distracting investment managers, according to a survey.

Fifty-three percent of respondents to the survey conducted by Stevenson James also said the presence of a well-regarded IR team would be the deciding factor between competing general partners, if all other factors were equal.

At the same time, 80 percent confirmed they believe the investor relations function to be either valuable or extremely valuable.

“Our experience suggests there is a correlation between the presence of a dedicated IR function and the success of a firm, particularly with respect to fundraising,” Stevenson James said.

The presence of an investor relations team is particularly useful for ensuring a GP’s timely delivery of accurate information, and the ability to responding promptly to queries and requests for information.

“This is important given 81 percent of LPs confirmed an increase, either marginal or substantial, in the amount of information now required, citing increased regulation and scrutiny as key drivers,” the survey said.

LPs said there are firms that must improve the quality of the communications they produce and the timeliness of its delivery.

Transparency also remains a key issue with some LPs, who said the information pertaining to the underlying portfolio companies is still too light and too thin.