5 Ways Hedge Funds & Institutional Asset Managers Can Leverage CRM for Strategic Advantage

Michael Boeke wrote this on April 15, 2018

As the alternative investment industry has matured, investor expectations around service and transparency have increased greatly. Funds of all sizes and strategies struggle with how to effectively meet these expectations with the limited resources available on their client relations and fund marketing teams. The good news for those teams? They can leverage client relationship management (CRM) software to meet and exceed investor expectations, and become both more efficient and more effective at their core responsibilities.


1. Grow AUM by closing more opportunities

Every fund needs capital to invest, so growing assets under management (AUM) is the raison d’etre for fund marketing teams. Automating sales activities can go a long way towards optimizing sales teams. By tracking opportunities, prospective investor outreach, and reporting at each stage of fundraising, teams can close more deals with less effort.

A thoughtfully implemented CRM effort can also help client relations and fund marketing teams discover and close new fundraising opportunities with existing investors. Careful tracking enables you to identify which investors would be a good fit for new strategies or follow-on investments in existing funds. Strong relationships with existing clients can make those opportunities easier to close than starting from scratch with new prospective investors.

As an added benefit, accurate reporting on fundraising opportunities can also help the investment teams with capacity planning.

2. Retain investors through the good, the bad, and the ugly

Strengthen investor relationships and identify and address risks early. Performance will always be king, but you have a better chance of weathering the inevitable storms when you’ve built a strong organizational relationship with your investors.

Being responsive to concerns can go a long way to calming an investor’s rattled nerves, but there’s an even better approach. Consistent transparency and proactive communication through the good times can build a reserve of trust that a fund manager can call upon during a rough patch.

Staying on top of regular communication requires the ability to track investor interactions. Your CRM software should help you not only to send your monthly performance updates, but also to track how many times you’ve emailed, called, and met with a key investor. It should also help you to identify the investors you’ve interacted with the least - the ones who may be the most likely to divest. With the right information, you can get in front of these investors early, and work on building stronger relationships.

3. Collaborate better to get more done

Many folks outside of the alternative investment space don’t realize how much hedge funds do with small teams. Firms that manage hundreds of millions of dollars in investments are staffed like many small businesses in other industries. Keeping everything organized is critical for small teams to operate efficiently. That includes the basics, like creating a shared contact book, to more complex tracking of client communications and compliance data. In almost every case, having an organized central repository of client data can save the time and effort of tracking down information from disparate sources.

Storing your investor information in a CRM can also help leverage your entire organization to service and grow client accounts. Client relations and fund marketing teams that work closely can assist each other at every stage of investment, making everyone more effective and delivering a higher standard of service to investors.

4. Expend less time and energy on compliance

Keeping track of the right things is half the battle for fund managers looking to ensure compliance with the SEC, FINRA, and other regulatory bodies. CRM software can make it easier to execute and automate the processes you’ve defined for compliance with GDPR, AML, Blue Sky, ERISA, and more.

Once you’re tracking the right information, robust reporting in your CRM can enable you to see everything in aggregate. Your CRM’s extensive reporting should make it quick and easy to respond to requests during compliance audits and audit prep, saving you time and aggravation during what is often a stressful experience.

5. Improve fund marketing effectiveness

Despite the regulatory limitations on alternative asset management marketing, CRM can improve the effectiveness of your marketing efforts while saving you time and effort. For starters, you should be able to use your CRM to automate monthly performance letters and other regular communications as well as track prospective investors’ engagement with those communications. Some things to consider include gathering data to qualify investors online, simplifying roadshow planning and following up on investor presentations with timely and personalized communication campaigns.

Getting Started

It’s time to get serious about CRM for your hedge fund, private equity fund or traditional fund and there’s no better time to get started. The sooner you start the journey, the sooner you’ll reap the benefits.

If you already implemented something, you may want to consider your options if you fall into one of a couple of categories. First, if you’re using a general purpose CRM, you may get a lot more value from software that was built with asset managers in mind. Second, if you implemented an asset management specific CRM, it’s always good to reevaluate if this CRM is supporting your team’s current operational needs – if yes, then great, if no, then it’s time to see what else is out there.

Whatever you decide, you have more CRM options than ever before. That translates into a real opportunity to differentiate your firm from the competition by building your CRM practices into a strategic advantage for your fund.