The New Build vs. Buy: The Debate Asset Managers are Facing Today

Rob Shakhani wrote this on March 22, 2018

Effective client relationship management is top of mind for asset managers in today’s increasingly volatile environment. More than ever investors in traditional funds, hedge funds, private equity funds, and other alternative asset classes require greater transparency into their investments, capital activity, and their fund manager’s outlook on the markets. All this leaves investor relations professionals wondering how they can satisfy a continuous influx of information requests.

build vs. buy

 As a result, many firms are taking a step back and reviewing their Investor Relations strategy and associated processes. Client relationship management is often an overlooked and under-invested function within asset management firms. Although this department isn’t necessarily bringing in the firm’s capital or managing investment strategies, it is essential to any fund manager's long-term success. The client relations department is tasked with the challenging responsibility of keeping existing investors happy and helping to retain their capital. Often, these departments are understaffed or lack the proper software to complement their daily workflows.

This past February, at the Opal European Family Office Forum, the keynote on Early Stage Venture Investing touched upon the advantage CRMs that cater to specific industry verticals provide their users. Customer Relationship Management tools that focus solely on addressing the use cases in a niche market such as investor relations are inevitably better suited to satisfy users’ unique functionality and workflow requirements.

Many asset management firms try to get by using generic CRM systems to help them interact with prospects and service their investors. In most circumstances, fund managers choose generic tools based on sticker price alone, failing to take into account the added burden and expense associated with configuration, support, and training. Although they appear to be cost-effective on the surface, generic CRM systems almost always take more time and cost more money to implement than an industry-specific product. This reality is exacerbated in the medium to long-term. Without substantial ongoing investments in tools, training, and staff, a generic CRM will not fulfill an asset managers’ needs out of the box and often leads to tedious workarounds or costly customizations.

Most asset managers using generic software hit an inevitable point where they need to start a customization project for the business to reap benefits from the software. As indicated, this significantly increases costs as additional financial and human capital resources as well as time are required to morph the product into a viable solution. Additionally, the focus of the IT department may be diverted away from its core objective of supporting the revenue producing activities of the business. The last thing an asset management firm should be dealing with is a prolonged software development project that does not directly support its core competency.

As industry and regulatory requirements evolve, industry-focused CRMs like Clienteer are continuously customized to support them. That simply isn't the case with generic tools designed with other industries and use cases in mind.

For example, aside from managing daily interactions with investors, client relations teams need the ability to keep track of all capital activity relating to their investments. This requires a CRM system that can keep tabs on more than just contact information and pipeline activity. Investor relations teams need to be able to track capital commitments, subscriptions, redemptions, transfers, and more for investor accounts held in complicated onshore and off-shore fund vehicles. Not only that, they need to be able to effortlessly import data from fund administrators or internal accounting platforms to keep up with investor level returns and balances. Having this detailed information at their fingertips empowers IR professionals to answer on the spot questions like, “What was my performance last month and life-to-date relative to the fund's reported number?” and “What’s my year-to-date balance?”

This type of native functionality dramatically eases burden associated with monthly reporting and account-level report distribution to investors and interested third-parties. In just a few short steps with an industry-tailored solution, an investor relations team can import finalized monthly balance and transactions data, prepare personalized reports, and securely distribute them to investors via email or an integrated web portal. Try doing that with a generic CRM!

The systems you implement will not only affect the way your business operates but also directly influence its success. As such, it is essential to carefully weigh all your options when deciding to invest in investor relations technology. Clienteer CRM rises above the crowd because it is purpose-built to fit the needs of asset management firms. Put differently the product speaks your language in ways general purpose software never will. Furthermore, being an industry-specific provider with nearly twenty years in this market means that our people speak your language, too.

To learn more about how Imagineer’s Clienteer CRM solution addresses the needs of asset managers, please reach out.