What responsibilities would an IR professional typically have at a PE firm?
This is a difficult question to answer. We have discovered that each firm operates very differently with how their IR talent is deployed. In light of that, we have found some consistent focus areas that firms continue to use to help maximize efficiency across the entirety of the company.
- Fundraising/Capital Formation. This seems to be the most popular answer that comes up when asked what does a typical PE IR professional do. This obviously is a critical part of the role. Going out into the market and committing LP capital, is the lifeblood of PE investing. Pitching and selling the firms investment strategy, demonstrating an ability to find and close deals, as well as the conviction of profitable returns, all of this is extremely valuable. The IR department at a PE firm plays a very active role in this process.
- Fund/Financial Reporting. PE firms are under contractual agreement to send financial reports to their LPs showing their fund performance during the stated period of time, normally both quarterly and annually. Information involved in this reporting could include different financial statements related to the firm, portfolio company valuations, tracking of LP contributions as well as income/dividends earned from existing investments. The IR department overlaps a good deal with the CFO and/or fund finance team who helps derive those numbers. However, where IR creates value here is leading the delivery of this reporting and setting up the quarterly and annual calls to help go over these reports.
In addition, an IR professional at a PE firm will “report” non-performance related information as well to LPs. This can include anything from non-fundraising marketing material, quarterly newsletter highlighting strategy insights as well as GP view’s on market conditions, and social media posts demonstrating success’ the firm has achieved recently.
An interesting development here, firms can use how often and what they report as a competitive advantage to attract LPs. Investors always love transparency and the more information provided, generally the less concerns LPs will have. PE IR professionals take on a large load when dealing with the reporting.
- Investor Services. Investor contact is another key component to a private equity IR department. LP’s will always have questions for the firm regarding their capital, the investment being made, the strategy, etc. The IR group will be the main point of contact to help in most LP situations. This involves offering comprehensive information, answering inquiries, and organizing investor meetings and events. This also will include being the middle man between the LPs and GPs.
One of the main themes here is keeping the relationship strong and helping to keep the LPs happy. Investor education and continued available support throughout duration of investment will contribute to building strong investor relationships and ensuring ongoing investor satisfaction. This is an incredibly high priority for the IR group as well as the PE firm as a whole.
Obviously we are missing some key attributes to the ever evolving IR list of responsibilities. What makes it interesting is how different this can be firm to firm. Some firms have their IR talent handling all the above and more, while some have theirs IR specialize in only one of the above.
So back to the original question, what responsibilities would an IR professional typically have at a PE firm? While on the surface level, it might seem like a difficult question to answer, it turns out the answer is actually quite simple.
There are no typical responsibilities for PE IR professionals. Each firm is very different in how they utilize their IR staff to best serve this investor base and maximize overall firm effectiveness.
