Revamping the Investor Journey: A Dual Benefit for Private Funds and LPs through Automation

A seamless subscription process is important, especially amid current funding downturns. Yet, archaic manual compliance procedures persist across many firms, resulting in tedious tasks, high costs, and hindered fund growth.

Conversely, select private equity firms are leveraging automation to alleviate General Partners (GPs) workload and enhance investor subscription experiences. However, should automation extend to cover additional facets of the limited partner (LP) relationship, such as transfers, confirmations, and updates?

Increasingly, private funds are answering in the affirmative. Mutual benefits abound when both parties embrace automation synergistically. Enhancing workflows between LPs and GPs not only expedites deal flow, amplifying margins and returns but also markedly enhances the investor experience.

Fortunately, a tipping point is on the horizon regarding funds' willingness to modernise. GPs are swiftly realising that subpar investor experiences impede fund growth, recognising the inevitability of digital transformation amidst a burgeoning LP base.

Neglecting automation could entail substantial costs. In the current phase of relative stability in funding, some GPs have discreetly implemented automation for client-facing and back-office operations. However, those banking solely on bolstering back-office personnel are essentially doubling down on manual methods, which may impede swift scaling to accommodate an influx of new investors.

Again, ignoring automation may dent a fund's credibility in the eyes of both new and existing investors, who increasingly expect efficient, consumer-centric experiences. As high-net-worth individuals (HNWIs) increasingly engage with private funds, their evolving demands necessitate ongoing communication and compliance interactions, further underscoring the imperative for automation.

The adoption of automation in private markets hinges on several factors. As attitudes evolve and technological advancements continue, a shift towards standardisation and digital workflows becomes imperative. Embracing automation not only enhances margins and improves investor experiences but also ensures preparedness for future upturns, positioning funds ahead of the curve in an increasingly competitive landscape.