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Q&A: How IR teams use the Preqin Solutions platform

David McKenna

David McKenna
Customer Success Manager at Preqin Solutions

In today’s highly competitive fundraising environment, the investor relations function has taken on significant importance. We spoke with Customer Success Manager David McKenna, who has supported IR teams using Preqin Solutions for the past three years, to show how our platform gives them a competitive advantage throughout the fund cycle.

What are the key data challenges faced by IR professionals? How does Preqin Solutions solve them?

There are many challenges faced by IR teams, but I will focus on – based on my experience at Preqin Solutions – two of the most important ones.

Accurate data is crucial to investor relations and fundraising efforts. A fund’s story is told through figures and charts based on analysis, and that story is only as compelling as the quality of the data it’s built on. Our platform empowers GPs to efficiently retrieve all the data points of an asset; the entire firm’s history from investment to exit. When they raise their next fund, this data is key for building trust and confidence with prospective investors.

On the other hand, investors and stakeholders demand more granular data than ever before. In older Excel-based models, it can take a prohibitive amount of time to find specific data and prepare reports for investors and internal stakeholders.

Our system reports can be customized to match any LP information request, with data drawn instantly into the report through our Excel add-in’s refresh function. The add-in also allows quick reference of any data point in the system for ad-hoc reporting needs.

Our clients spend fewer than 10 minutes retrieving KPI and financial data and preparing an aesthetic report to be exported to Excel and distributed.

Which functions/reports do IR professionals use most; standard or tailored?

We have a diverse group of clients in terms of strategy, size and global focus. Depending on the firm’s structure and investment strategies, they use a blend of standard and tailored reports. IR teams use a combination of our out-of-the-box fund performance, Preqin benchmarking reports and our highly flexible, pre-configured LP reports.

Our BI Excel Live Link (BELL) is an Excel add-in which allows users to link their spreadsheets with the Preqin Solutions platform, creating a connection to retrieve KPI values, comments and static data fields into Excel. This data can be used to power highly customized reports and presentations. The market is not completely ready to get rid of the flexibility of Excel, so we give our clients a more powerful interaction with their Excel files using database technology.

Users can choose to keep on working with existing Excel models, or they can adopt one of our ILPA-compliant standardized templates. We help our clients to keep working with the familiar tools they used before implementing our software, but powered by the cloud.

Our tear sheet is another high traffic report. A great performance tear sheet can help make the case for an investment in our clients’ funds, and can also highlight why an investor should stay with the fund through tough times. We designed our standard tear sheet structure following ILPA recommendations, so our clients know they are working with best practices aligned to investors’ demands.

How frequently do IR teams consult our software?

Software use depends on where funds are in their lifecycle. It can be daily for a fundraiser, shifting towards quarterly for reporting on a mature fund. Often, several funds are at different stages of the cycle and have different reporting demands.

During fundraising, I get four times more requests from our IR team clients than at any other time, so clearly, our tool becomes essential and high-touch during this period. When not in fundraising mode, IR professionals use the platform more for internal stakeholder reports or answering investor-specific demands.

How do IR professionals time the adoption of a portfolio management solution?

The most effective approach is to get portfolio companies reporting into Preqin Solutions right from the initial investment. That way, they start building good relationships based on reporting best practices, to enhance data transparency and consistency. We, therefore, have many customers who implement software around the same time as their first deal in a new fund.

Others look to adopt systems as they approach a fundraising cycle, as a means of organizing and refining data. In this circumstance, they can use the advanced analytics and historical performance data to slice and dice trends and ‘what-if’ scenarios to support the LP due diligence process.

To what extent do IR teams leverage performance data into fund-marketing content?

The platform provides clarity to investment programmes, risk, and allocation, but also calculates returns and shows how they stand up to Preqin benchmarks. This approach improves deal tracking, communication, and investment decisions for LPs and GPs. New measures of performance are now commonplace and routinely used.

We power our benchmarking with live Preqin data, for an immediate view of industry-accepted standards of comparison, as well as current trends such as Public Market Equivalent analysis. We also bring in traditional private-market benchmarks, which IR teams tailor to show fund performance achievements against funds with a similar focus.

Interested in learning more? Download our IR handout.  Preqin Solutions - Investor Relations

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