A large-cap global buyout house, looking to increase the size of its next fund, needed to improve the ratio of current LPs that re-upped. Our client was confident that it already had a relatively efficient communications programme but the investor relations team recognised a need to take a more considered approach to LP communications and understand how it could improve its performance in the future

In order to provide our client with a relevant benchmark, the first stage was to identify what LPs constituted best practice and to evaluate how our client’s current investor communications initiatives (and those of its peers) measured up. Using proprietary data and our knowledge of the LP community, we identified 40 LPs and gatekeepers from Europe, US and the Asia-Pacific region that were known to invest in large-cap buyouts, but also had exposure to other strategies. We then carried out in-depth interviews with these LPs focusing on three principal themes which we considered key to the project:

• LP communication practices of our client and its peers measured using IE Consulting’s proprietary eight channel LP communication model
• LP ratings of the relative importance of these eight channels
• Considered best practice in the management and execution of fundraising programmes.

Based on the results of the examination, we were able to demonstrate what LPs were looking for and how the client could improve its current investor communications practice:

• The study confirmed that our client’s performance was excellent in those channels considered to be of high importance. However, issues were raised about the structure of its annual meeting and we were able to provide practical examples of changes that could be made.
• Although by no means the weakest group in terms of direct contact, some investors were unhappy with our client’s formal one-to-one contact with LPs. Based on the findings of the study we were able to identify ways in which our client could better structure and improve the effectiveness of its communication through this channel.
• LP feedback revealed that our client’s peer groups were considered much more innovative and sophisticated in the marketing materials they produced. At the same time, however, LPs expressed concern that some GPs spent too much money on what they perceived to be ‘less important’ activities. Our analysis enabled us to advise our client on how it could implement some quick wins in its marketing strategies without diverting focus away from more important communication channels