In a private equity firm, investor relations involves communicating the firm’s strengths to existing limited partners investors and potential investors. The goal is to build investor trust in the firm’s management team to keep existing investors relaxed and to support future fundraising efforts.
Thus, an investor relations professional will foster relationships with existing investors through a variety of communications. These can include: investor phone conferences, Powerpoint presentations, quarterly or monthly performance reports and newsletters, letters to investors, press releases and arranging for the principals in the firm to participate in industry conferences.
There is often a blurring of the lines between investor relations and marketing activities. The same professionals will often be involved in marketing-oriented activities such as developing a client- and public-facing positioning strategy for the firm, competitive analyses and benchmarking documents, to support the firm’s performance reports, and developing relationships with the limited partners and institutional investor community.
A look at some of the investor relations jobs listed at JobSearchDigest.com reveals the specific activities and qualifications needed for this type of work. For instance, a more junior position such as an Investor Relations Associate for an international private equity firm based in New York, would be involved in:
– Preparing marketing materials
– Preparing due diligence documentation
– Market research into the investor community
– Managing the client databases
– Producing ongoing investor reports and special projects
Someone at this level would need at least 3 or more years of experience in investor relations for a financial institution, a solid understanding of private equity investments, and outstanding Powerpoint skills.
Moving up the ladder, a manager of investor relations for a British private equity firm would take ownership of the firm’s entire investor relations communications process. He or she would manage the staff who produce the materials mentioned above, while taking a lead role in organizing investor conferences. At this more senior level, you would have considerable face-to-face interaction with clients and would be expected to communicate the strengths of the firm and its performance in a convincing and confident manner.
At the very highest level, a director of investor relations for a global private equity firm, may also take on fundraising responsibilities. He would be meeting frequently with potential investors around the world and helping to raise capital for new funds launched by the firm.
Next time, we’ll look at the role of investor relations within venture capital firms.
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