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How hedge funds can create an excellent LP experience

Insight 20 January 2022

How hedge funds can create an excellent LP experience

Hedge fund General Partners (GPs) are looking to demonstrate their firm’s value-add to investors from both a performance and investor experience perspective. With the right solutions and service providers, hedge funds can create an excellent LP experience that takes every opportunity to anticipate LP needs and add value.

Although consistent, outsized returns are important, Limited Partners (LPs) are looking for funds that offer effective communication, secure technology, and instant access to their investment details. As in-person meetings are few and far between and the need for intentional, virtual communication has increased, hedge managers are paying close attention to their client experience.

The most important steps hedge fund managers can take to improve the LP experience are centered around facilitating smooth and secure access to information, proactive communications and reporting, and seamless exchanges with GPs. Choosing the right service providers and solutions to meet investors’ evolving needs plays a large role in the LP experience.

Consistent communication is more important than ever. Top-tier funds use personalized email communications to build trust among LPs. Managers can start by identifying stages of the fundraising process and beyond to connect with investors. For example, LPs will find value in information regarding fundraising milestones, thought leadership, the fund’s investment focus, partner news, portfolio company performance, curated content suggestions, and announcements of upcoming webinars and events.

Post the pandemic, communication needs to go deeper than regularly scheduled updates. Consider scheduling one-on-one time with investors to convey detailed information about performance and reinforce your investment strategy’s success. The power of partnerships and building string relations is a key differentiator.

The ability to provide an effective reporting solution will help hedge fund managers stand out from the crowd. Technological advancements are driving expectations; investors are demanding more sophisticated and frequent reporting that extends beyond traditional investor statements. Such reporting requests range from trading and performance data to risk parameters and ESG.

Although content and timeliness of reporting to investors should be consistent, such that all investors expect to receive the same information at the same time, some investors may ask for more information, or the same information in a different format. If the manager deems these requests reasonable and fair, they need the right technology to efficiently fullfil such ad hoc reporting requests.

Managers must have the data strategy and systems to deliver the right level of detail to investors in their preferred format by partnering with a fund administrator that has robust service and reporting capabilities. To adhere to investor demands, the expertise to understand data strategies intimately and present data effectively is needed. Hedge managers can engage forward-thinking, progressive fund administrators to provide the flexibility to adapt reporting over time and evolve with the fund’s needs.

While frequent outreach and reporting are important, LPs expect secure access to reports and dashboards, putting the applications they require at their fingertips. Modern investor portals can deliver the reporting and application access investors expect and optimize the user experience.

A portal brings together data, reporting, analytics, applications, and documents in a single location. Plus, portal solutions available today have features that make processes extremely efficient and cost effective. Look for a solution with benefits like:

  • Live access to reports directly from multiple data sources, including back-office systems;
  • Fully customizable reports and dashboards that enable real-time decision-making;
  • Customized feeds according to LP interests and communication preferences; and
  • Responsive design optimized for use across desktop, tablet, and mobile devices.

Not only does a portal improve the LP experience, but it also replaces much of the costly and time-intensive work associated with frequent, ad hoc communications and manual reporting previously performed by accounting and investor services teams.

Sanne’s GP and Investor portal, Sanne.Live includes these attributes and more, including fund and portfolio monitoring, integrated workflows, document management, investor communications, and KYC collection. Securing investor data is a top priority and therefore Sanne.Live has built in multi-factor identification for additional security, and a self-service password reset.

Meeting and exceeding investor expectations requires a high level of attention to detail, operational efficiency, industry information, and market knowledge. Specialized expertise is needed to manage the day-to-day operations of the fund, including the LP experience.

As a fund manager grows their assets under management, the right fund administrator can be a long-term partner that helps scale their operations by providing a sophisticated service solution for evolving investor needs. As solutions and technology become a significant differentiator, fund managers should look for a fund administration partner that has a breadth of services, world-class technology and reporting, and a team with hedge fund expertise.

With the right solutions and service providers, hedge funds can create an excellent LP experience that takes every opportunity to anticipate LP needs and add value. Over time, this builds trust and leads to repeat investments. If hedge fund managers prioritize communication, reporting, and delivering expertise, they will attract and foster successful long-term relationships with investors.

How Sanne can help

We provide institutional quality solutions that investors have grown to rely upon, while delivering a boutique approach. By outsourcing fund administration to us, hedge fund managers benefit from reduced costs and risk, increased efficiency, and optimized operations.

Our team of hedge experts can provide you with full coverage of your middle-office, hedge fund accounting, investor servicing and regulatory reporting requirements.

Reach out to Adrian directly to learn more about Sanne’s hedge services.

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