7 Questions on Investor Relations at Scale with Todd Glasson

I have spent most of my career focused on digital investor experiences. My start in private equity was building the Carlyle Group’s website in 2001 right after 9/11. I believe that the technologies your clients touch are the most important technologies, which for private equity GPs is their investor portal. The pandemic essentially accelerated a lot of technology adoption and likely changed interaction preferences for a generation, and it has also illustrated how important investor digital experiences have become. A crisis forces more transparency, which then becomes a standard operating procedure. Portal usage has skyrocketed, and GP information sharing has also significantly increased. The number of logins on our platform increased 44% during the pandemic with 1.9 million unique logins. InvestorFlow is also an email platform and the number of emails sent grew 32% to 2.8 million emails.

InvestorFlow’s clients manage over $2 trillion of assets and our portal platform supports over 150 private equity GPs with $480 billion of assets and commitments. Our clients represent all aspects of the private equity industry, from giant asset managers like PGIM Real Estate to innovative VC’s such as Y Combinator to global fund admins such as the TMF Group.

The legacy of portals in private equity were rather pedestrian: document sharing of capital calls and distribution notices, K-1 distribution, etc. It was a glorified mailbox and was primarily a third-party product with folders or a generic portal provided by an accounting software platform. These portals were never true communication platforms or branded experiences. Your portal is the synthesis of your digital strategy and needs to support more than document distribution. Dynamic capital account statements, fundraising dashboards, investor services tools, deal rooms, portfolio reporting, alerts, wire/ACH instructions, digital signature processes… It’s remarkable how many workflows and information services are adopted and supported digitally today.

We have also built a robust API with many methods and have integrations with Salesforce.com and Dealcloud. InvestorFlow is business partners with Cloud Theory, who we believe is the best salesforce integrator to build robust and enterprise CRM applications for PE and real estate firms. InvestorFlow can integrate with any back-office system through its API. We pull transactions, CRM data, documents, almost any form of content through our API. Through our partnership with PCR, we can also push data and documents directly to investors to be consumed in Addepar. Likewise, we can pull data from multiple custodians through PCR to create consolidated portfolios for LPs. We believe that we are the best-of-breed layer for investor experiences. With APIs, you do not need one monolithic system for your back, middle and front office. It’s remarkable how many systems are from the same vendor and still do not talk to each other. Investor relations professionals can use best-of-breed technologies like Salesforce fully integrated with a best-of-breed portal experience like InvestorFlow.

Clearly the flight across the pond or country to pitch a new fund is likely over or significantly curbed. While there is nothing more important than face-to-face meetings, there are many advantages of virtual fundraising for both LPs and GPs. Virtual diligence creates scale for GPs and increases participation for LPs. Ultimately, the power of technology is one to many. The scale with technology is practically limitless and experiences can be much better than analogue communication tools like documents and pitch decks.

Zoom or Teams coupled with more advanced deal rooms like InvestorFlow’s due diligence module are the most important tools for fundraising. Our due diligence module is a richer experience than a typical deal room. We clearly organize the key diligence documents, and then enhance the experience with interactive PPMs, videos of the GPs, and the ability to indicate interest and start a subscription process. The fundraising process is also happening in the same portal used for investor reporting after the close. We are a big believer in a single portal experience for LPs – all of your LPs, institutional investors, RIAs and HNW investors. I have always loved the phrase “make it easy to do business.” This maxim drives a lot of our philosophy. Why would you have your client log into multiple different portals if they are invested in different funds just because they are managed by different fund admins?

We rolled out a new feature in 2019 which we call Alerts. I started to realize that email was being grossly overused and that certain communications require the assignment of specific tasks to LPs. Alerts can simply be a reminder of a capital call or something highly specific like a request for a regulatory document that needs to be uploaded by an LP for compliance reasons. InvestorFlow has the ability for LPs to share documents securely with GPs too.

There is no need for a separate Dropbox account for you to collect content from an investor. Everything can be done in one branded experience. An alert could also be an invitation to a Zoom, which is then an iCal object which interacts with the LPs calendar.

Alerts were an immensely popular feature during the pandemic as GPs needed to send a lot of information, sometimes daily, and did not want to overload their LPs’ email boxes or get lost in their inboxes. LPs love this feature too as it simplifies and helps them focus on what’s new in the portal, focusing their experience on the content and tasks that they need to complete inside the portal. Again, “make it easy to do business.”

There is a myth that only admins and accountants log into portals. Allocators are big users of our portals: from CIOs to consultants to RIAs. If the experience is not rich and is only used for capital calls, distribution notices and K-1s then the usage will be utilitarian. If you are providing portfolio analytics, unique research, and interactive content for diligence, then decision makers will spend time interacting with your brand online.

Your investor portal is the most important digital brand experience, more important than your public website. Once an LP has a login, they do not go back to your public website. The portal experience then needs to reflect the investment manager’s brand and culture as well as provide updates on the firm that could never be broadcast on a public web site due to regulations. We have built a platform that allows for 100s of configurations and page settings to customize the experience without any coding.

Before InvestorFlow, if you wanted a fully branded investor experience, it would have to be built with the aid of an expensive digital agency. With InvestorFlow, you get the security and scale of a trusted software platform coupled with our configuration engine to make the experience bespoke to your culture, look and feel. We also do not force or couple services such as distribution or marketing with our solution. We are a technology company providing enterprise software. Not a placement agent or a fund administrator providing technology. This provides GPs with significant control and future proofs their own enterprise.

We have many clients who use multiple fund admins and placement agents for different regions. GPs need to invest in their own portal and consolidate their email communications or they will create highly confusing investor experience for their LPs and more importantly miss an opportunity to reinforce their brand and accomplishments.

Security is paramount. We are as focused on security as we are on experiences. We encourage all of our clients to use two factor authentication and encrypt everything at rest. We actually spent an entire year in 2017 not building any new functionality so we could focus entirely on security. InvestorFlow has a 100% rating from Veracode who is the leading software security audit firm. Our model is also very different where we create single tenancy for each client. It is a highly redundant security model. We also outsource our infrastructure to Rackspace who has been an incredible partner and actively monitors all traffic 24×7 in a command center operated by former NSA staff. This allows us to focus on secure software development. We also retained Marcum LP to audit our internal security processes and have implemented DLP. You have to be vigilant and continuously implement best practices.