The last few years have transformed the way private capital firms interact with their limited partners (LPs).
Virtual communications are now the preferred mode of engagement for many LPs, offering greater efficiency for coordinating global meetings. Reducing travel also has clear environmental benefits as both GPs and LPs sharpen their focus on monitoring and managing the impact of their operations.
In October 2020, Nordic Capital closed a €6.1 billion buyout fund remotely, with no face-to-face meetings – a feat that was
achieved in just six months. This was a clear indication of the industry shift towards virtual fundraising and investor relations.
The efficiency technology provides goes beyond virtual meetings. LPs have welcomed the opportunity to access materials on their own terms and in their own timeframe. In response, GPs are turning to pre-recorded videos to deliver polished presentations on their investments.
The phrase “send us a link”, has become a common request from LPs. This has multiple benefits for all parties, including:
“Transactional Video Content”
In 2020, 52 Digital started producing “transactional video content” for several mid-large cap GPs. Since then the videos have evolved to cover a variety of functions and topics:
- Introduce fundraising decks
- Portfolio company and exit case studies
- Sector or thematic showcases
- Origination and due diligence overviews
- Deal announcements and bolt-ons
- Co-investments
- Announcing new hires, offices, partnerships or acquisitions
Working closely with investment and IR professionals, we have observed a clear trend and realisation; transactional video content enables firms to save time while enhancing the quality and consistency of their IR and communications. Consequently, the use of this content is growing.
Pre-recorded video communications offer private equity firms the ability to reach wider audiences. Sending a single link to multiple companies results in quicker responses while saving investors time too. The streamlined process allows LPs to assess investments, indicate interest, and then set the stage for more natural follow-up conversations. This in turn creates additional LP coverage, generating more long-distance, international relationships, where future video updates can be watched conveniently across all timezones.
While this enhanced accessibility allows companies to communicate more effectively, it does not eliminate the importance of in-person interactions. Annual Investor Meetings and crucial moments in the investment process will always require real events and face-to-face meetings. That said, and although travel is regaining popularity – for everyday communications, initial or urgent presentations of investment opportunities, well-produced recordings save time, increase reach and improve results by being sent simultaneously to all parties.
This article was written by Mungo Park, a Partner at 52 Digital. 52 Digital is a digital and content specialist for private capital firms.