4vco Newsletter - Issue 38 - Q2 2009
Contents
Investor Relations Update
Industry News - Headlines
TheNextRound: client news and London team expansion
Netage Solutions: announces Dynamo 6.0
3i Infotech - Framework: announces new MD and Sales Director
AnalytX: announces PEO for Service Providers
PEARonline: announces version 2
Vantage Software: announces Vantage Insight
Confisys Solutions: the new name for Ravissant Creations Software
Investor Relations Update article
The following article is written by Jeremy Hocter. Jeremy joined 4vco two years ago and is responsible for developing our IR services. Prior to 4vco, he spent four years with Cambridge Associates in Boston where he was instrumental in developing and running management information systems to support PE analytics. His time with 4vco includes a significant assignment with a major London-based pension house where he has designed and managed the delivery of a funds management information service, in conjunction with an outsourced administration service.
With today's scrutiny of PE investing, significant write-downs of portfolio holdings and LP liquidity problems, Investor Relations (IR) has come increasingly under the spotlight. Whether it is due to increased regulation or more demanding questions from investors, GPs are communicating more and are required to promptly deliver detailed information regarding their current state or track record during fundraising. LPs are also taking a more active role in analysing operational risk of their GPs in light of recent fraud cases and often to satisfy their due diligence requirements when making new commitments. Today's systems have evolved in response to these pressures and offer many automated tools expanding on, or integrating with, the client's current platform to increase IR capabilities to meet the increasing demands of investors. Whilst IR demands vary from firm to firm, there are several functional areas that concern most PE firms and that are addressed in various ways by the major PE software vendors:
Financial Reports and Correspondence - The automated generation of fully customisable financial reports (e.g. quarterlies), that generally include accounting data and quantitative/qualitative information relating to the portfolio. Also, other correspondence including calls, distributions, tax documents and firm/deal press releases.
Document Delivery - Secure and traceable delivery methods range from mass emailing tools to web portals (integrated and standalone) where a firm can manage individual user rights to content and monitor a user's activities.
Advanced Interaction - Websites providing a rich user experience including dynamic reporting from an online database, streaming content from portfolio companies or AGMs and secure communication tools to correspond with users or allow them to update their contact details.
Fundraising - (i) Managing fundraising progress through configurable multi-step processes that include maintenance of investor structures, static data, preferences, limits etc. (ii) Provision of standard and ad hoc reporting on a centralised, validated data set to provide slice and dice analysis of track record in response to investor queries.
Event management - Controlling and recording the various stages of an event and further enhancing the centralised data held about investors and related 3rd parties.
Historically, IR has rarely been the main focus when selecting a PE system. As fund sizes increased along with LP allocations to PE, the demands and level of LP sophistication increased in parallel. Centralising IR correspondence and automating delivery is essential for information sharing between the front and back office as well as being the best method for mitigating disclosure risks when communicating to investors. The days and the expenses of faxing and posting correspondence are gone, making way for secure PDFs and automation that helps to reduce the risk of manual error.
GPs today are addressing the elements of IR in a variety of ways with both a systematic approach and dedicated staffing. Many GPs rely on their PE system to automate document creation and email delivery with some also providing a web interface where LPs can retrieve current and historic documents. Some packaged solutions also provide a level of dynamic reporting through interactive web portals enabling LPs to run ad hoc queries on a validated snapshot of their investment history and provide interactive correspondence with individual users. A small number of GPs have built bespoke solutions to achieve the same.
The future of IR is likely to get more sophisticated, especially in a tough market where LPs are analysing each cash flow to provide more in-depth reports to investment committees to justify PE commitments, management fees and to closer align reporting with other asset classes. Investors' demands on GPs increasingly include requests for interim valuations and financial information for prospective deals alongside capital call notices. LP usage of advisors and gatekeepers will increase in line with new fundraising, leading to more in-depth queries and the need for CRM tools to track tasks and interactions in addition to proven reporting tools tied to a solid MI database.
The most comprehensive option for handling IR is a fully integrated front-to-back office system capable of reporting on information from its own database and outputting correspondence to an integrated web portal, where user rights and activities are typically managed through the CRM portion of the system. For firms using multiple systems and spreadsheets, a bespoke web portal or some additional development around the existing front office platform may provide the level of integration and automation necessary to meet IR needs. Standalone IR tools can be deployed to any system with the possibility of integration depending on the firm's current state and desire for development. No matter what the solution, it is important to note that the driver for any good IR system is a well-designed and integrated MI database where performance figures can be reported on and delivered using the various methods available.
Jeremy Hocter
Senior Consultant
If you would like to find out more about the options that are available to enhance investor servicing, contact Jeremy to arrange an initial meeting. jeremy.hocter@4vco.com
Industry News Items
TheNextRound: client news and London team expansion
TheNextRound has added 2 new full-time Account Managers to their London office for expanded regional support to their private equity clients. TNR now has 225 clients in 22 countries.
For more details visit www.thenextround.com
Netage Solutions: announces Dynamo 6.0
“Netage is preparing to launch Dynamo 6.0, a web-based platform delivered via Software-as-a-Service. The industry-specific CRM has rich features for deal tracking, portfolio monitoring, fundraising, and investor management. It seamlessly integrates with Outlook, and is accessible via BlackBerry and PDAs. And unlike some other web-based products, Dynamo 6.0 preserves the usability of desktop applications with right-click and drag-and drop capabilities.”
For more information, contact Stuart Sheppard at stuart@netagesolutions.com
3i Infotech - Framework: announces new MD and Sales Director
3i Infotech – Framework has announced the appointments of Elspeth Goodchild as Managing Director and Bulent Osman as Sales and Marketing Director.
Read the full press release at: www.frameworksoftware.com/News/Goodchild-and-Osman-appointment
eFront: new client news
The Ohio Public Employees Retirement System (OPERS) has chosen eFront's FrontInvest solution as its Private Equity and Real Estate Investment management system. More information at www.efront.com/en/news/PR/Opers_Private_Equity_Real_Estate.asp
Advanced Capital, leading alternative investment company in Italy, implemented
FrontInvest to support its Private Equity fund of funds operations. Managing assets in excess of €600 million, Advanced Capital was notably the first asset management company in Italy to launch a Private Equity fund of funds. More information at www.efront.com/en/news/PR/Advanced_Capital.asp
AnalytX: announces PEO for Service Providers
AnalytX has announced the availability of The PEO for Service Providers (PEOSP) to support the increasing demand for alternative asset fund administration.
More details at www.analytx.com/activity_article.php?id=484
PEARonline: announces version 2
New features available in version 2 include:
- Individualised documents - such as the LP’s own capital account or LP-specific capital calls and distribution notices.
- Document type selection - GPs can specify that certain individuals at an LP only receive certain document types, such as capital calls and distribution notices, K1s, or annual financial statements.
- Watermarking downloaded documents.
Simon Thornton, founder, reports that PEARonline is now used by 23 GPs (and 2,000+ LPs) including US and Asian fund managers in addition to the core initial client base of UK midmarket funds.
More details at www.pearonline.com
Vantage Software: announces Vantage Insight
From the press release:
“Vantage Insight gives private investment firms and investors web-based access to data for analysing investment performance activities in a consistent, professional, user-friendly format”.
Read the full press release at: www.vantage-reporting.com/ASSETS/DOCUMENTS/04072009VantageInsightRelease.pdf
Confisys Solutions: the new name for Ravissant Creations Software
M/s Ravissant Creations Software Pvt Ltd, has officially changed its name to:
M/s Confisys Solutions Pvt Ltd.
Bharat Khemka (CEO) adds, “We believe our new name, Confisys Solutions, symbolises our expanding range of products and services in a better way.”