Latest Research from KPMG and AIMA Describes How Hedge Funds are Improving the IR Model in 2020

Latest Research from KPMG and AIMA Describes How Hedge Funds are Improving the IR Model in 2020

IR1080-1024x597 Latest Research from KPMG and AIMA Describes How Hedge Funds are Improving the IR Model in 2020

BlogKMC-copy Latest Research from KPMG and AIMA Describes How Hedge Funds are Improving the IR Model in 2020

New research from KPMG International and the Alternative Investment Management Association (AIMA) shows that hedge funds are developing operations to become more robust, dynamic, and productive as they continue through the COVID-19 pandemic challenge. The report is conducted in real-time throughout the pandemic and surveys 144 hedge fund managers globally, representing an estimated $840 billion in assets under management (AUM). One of the key findings of this reports relates to the efforts of the majority of the surveyed funds to improve their Investor Relations (IR) function.

The importance of being face-to-face with clients and prospects cannot be overemphasised. During COVID-19 restrictions face-to-face meetings are near impossible and this has led to 58 percent of hedge fund managers taking steps to improve IR digital tools. Virtual meetings have increased in frequency and the expanded communications have helped to strengthen relationships between investors and managers. It has enabled the CEO and CIO to interact more regularly with many more investors. Going “virtual” has in many ways levelled the playing field, in the past small to medium sized funds struggled to persuade investors to travel to events, conferences, and in-person meetings. Now, investors are more open and flexible to such communication. If there is no means to satisfy the need for “in-person” due diligence, most investors would undoubtedly stay with those they already know and this of course favours the larger, more established actors in the market.

Screen-Shot-2020-09-14-at-15.44.45 Latest Research from KPMG and AIMA Describes How Hedge Funds are Improving the IR Model in 2020

“Ultimately, hedge funds will find the right balance of a more decentralized environment with the necessary face to face interaction in the office.” said Joseph Fisher, Senior Partner, Asset Management, KPMG in the US.

However, the absence of in-person meetings has required many managers to reconsider and restructure the way they manage investor due diligence and reporting. Bespoke reporting and services are being utilised and one-in-five say they are working to improve the transparency and risk reporting of their underlying funds. Operational due diligence meetings are happening via extensive video conferences. The decentralized workplace has brought with it new intricacies but the IR function broadly speaking is adapting and becoming greatly enhanced as a result.

“The hedge fund industry has been innovative, agile, and resilient through the pandemic, and our survey bears this out,” said Andrew Weir, Global Head of Asset Management, KPMG International. “They are evaluating their existing operating model and adjusting their core processes, cost structures and work environments so they are positioned to grow and meet the changing needs of investors.”

The report reveals a high level of satisfaction with GP communications, greater transparency and control during this difficult COVID-19 pandemic period. Due to this overt satisfaction we expect to see more bespoke client services offered by fund managers to their investors.

The COVID-19 challenge has demonstrated that hedge fund managers operations’ and services are resilient and dynamic. If anything positive is to come from this period of great disruption it will certainly be the advancement of IR within the investment industry.

Investing in the area of investor relations has shown to not only to forge existing relationships but also help create new business through referrals. As such, first class communication with clients is now seen as competitive advantage for those looking to differentiate and become best in class across all functions. Finscoms has ample experience in the IR sphere and are best placed to help enhance any existing IR model.

Ken Carmody

Chief Operating Officer

Mkt@finscoms.com  

+353 1202 4444

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In the post-Coronavirus economy, where are the smart investments?

In the post-Coronavirus economy, where are the smart investments?

Ben1080-1024x668 In the post-Coronavirus economy, where are the smart investments?

colour544x544-300x300 In the post-Coronavirus economy, where are the smart investments?

The covid19 crisis has turned into a major economic crisis. However, some positive evolutions have been noticed in the last weeks and we can now see light ahead at the end of the tunnel even if the tunnel is still quite long. 

At Finscoms, we are positioned between investor and investee acting for both and as such we have our ear to the ground. This gives us a unique opportunity to share with you what we are currently hearing from our extensive and diverse network. What are our investors seeking? What are the sectors that they believe will present the best upward trends in the coming months? This is not deep market research or investment advice. This is simply a summary of the investment sentiment in our circles over the last few days. We think this could be valuable for you to integrate into your own analysis.

Please react and share your comments with us!

Covid19 has not stopped investors searching for targets and sourcing deals. The PE funds and the wider investment community are cash rich and dry powder has probably reached record highs. Here are three sectors that many are discussing:

  • Telecom / Digital: Covid19 has boosted the use of all kind of digital technologies. From home leisure, home working, but also all social media, digital collaboration, … as well as “digital health”, “security and tracking”, … The move towards a digital era has significantly sped up and will probably remain the norm after the pandemic. This situation has shown that there are bottlenecks in infrastructure where more capacity is needed now, even before IOT and 5G. Netflix and other streaming providers have reduced the quality of their data to reduce the impact on the network. More investments will be needed in this area to strengthen the capacity.
  • Renewable energies: one positive aspect of this pandemic is that it has highlighted very concretely our dependence on the world and nature. The strong demand of investors towards the Energy sector that we had before the confinement has not been reduced. However, it has shifted: Oil & Gas projects have stopped due to over-capacity and some investors have directed their investments towards Renewable Energy “projects”.
  • Hospitality: this sector has been very badly hit … and it will probably continue to be so for the next few months. A recovery won’t happen in the short term, the horizon/timeline will probably be next year. However as soon as a vaccine and confinement is behind us, this industry will probably recover sharply: after months of privation people will spend a lot in the leisure sector. Undoubtedly, it means that many firms will have an urgent need for cash for the next 12 to 18 months, with a positive prospect after this period. Making this sector an ideal target for distressed finance!

On the project side, the impact of Covid19 has now more than ever meant that there is an emphasis on the quality of the project. Like in any difficult period the weakest will die and the strongest will survive. There are of course many criteria to identify and consider which will deem whether a project will survive. Given Finscoms’ positioning, we have noticed that the role of the communication of the value proposition and its uniqueness has become vital. More than ever, projects who want to have a chance to succeed need to stand out of the crowd and communicate a strong message through first class presentation. Given the extraordinary times we are in, the knee jerk reaction is to reduce or even cut out all marketing when the reality is those that invest further in their marketing and communications are better placed when restrictions are finally lifted. Give yourself a running restart.

The projects with a strong vision and a strong team have understood that the communication is key in their efforts to reach their audience (clients or investors): they are still investing to raise their profile. Others, less mature projects, the weakest ones, have made another choice and have reduced their spending … or even stopped their project!

Finscoms.com is a consulting firm helping our clients connect with all kind of financial services suppliers. We are sourcing investments targets worldwide for our investors with a particular focus on Europe. We have a portfolio of around 100 projects (Telecom, space, blockchain, biotechnologies, infrastructure, transportation, logistics,…) and around 300 real estate opportunities.

Benoît Egée, Co-Managing Partner

mkt@finscoms.com  

+353 1202 4444

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