Investor Relations and New Investment Processing
June 22, 2023 | David Fisher | Phoenix American
New investment processing is all about efficiency and accuracy and an essential part of investor relations. The ease and speed with which an investor is brought into a fund by the investor relations team is the investor’s first impression of the competence of fund management. Getting it right the first time not only impresses the investor but saves time, reduces costs and benefits your reputation in the industry for effective investor relations. Your investor relations provider should be equipped and experienced to bring in new investments in any of the ways available to a private fund.
•Paper Subscription Documents — Even post-pandemic, many fund sponsors still take in new investments using subscription documents and many investors still prefer the old familiar approach of ink and paper. Your investor relations team needs to be adept at transcribing investor data accurately into specialized systems, retaining scans of original documents and, if necessary, chasing down any missing or incorrect information. The investor or their advisor might have made any number of mistakes. The investor relations team must be the efficient and fast solution to any NIGO (not in good order) subscriptions and never the source of delays in fund admittance.
•Straight-Through Processing – There are currently seven technology providers for electronic investor subscription for alternative investment funds. Your investor relations provider must have systems that are integrated with whichever of these providers you have chosen without complications and at a cost that realizes the savings that should be inherent to electronic efficiency in investor relations.
•API Connection – You may decide an electronic subscription form of your own, available on your website, is the best way to make things easy for investors, but your investor relations provider will have to have pre-existing Application Programming Interface (API) capability with their investor registry to make it work for you. If such connectivity has to be developed for your needs it can be costly and time-consuming.
•DTCC API Platform – Some financial advisors submit new investment information through the Depository and Trust Clearing Corporation (DTCC) Alternative Investment Products (AIP) platform. An investor relations firm able to process these investment must have a pre-existing subscription and investor relations system connection to the AIP platform.
•Mobile Phone App – Generation Z loves their mobile phones and fund sponsors have begun to approach these potential investors by accommodating investments via mobile phone app. To be relevant to this process, investor relations firms have to have the technological capability to get all the necessary investor information into the fund’s shareholder registry securely and with all the necessary compliance from the mobile phone app.
•Crowdfunding Platform – Another form of electronic subscription is the crowdfunding platform. Only a versatile and easily integrated investor relations system with an API connection to the crowdfunding platform can efficiently process investor information and all the necessary underlying data without expensive and time-consuming development.
Phoenix American’s STAR-XMS investor relations software includes controls to minimize manual input errors, compliance checks to satisfy AML/KYC, OFAC, Blue Sky and other regulatory requirements, integrations with every subscription technology and connectivity with entities throughout the industry to accelerate investment processing. Scans of original documents are embedded in account profiles for easy reference. The robust reporting capability of STAR-XMS enables managers to leverage investor relations data to grow new sales success.
For investor relations, STAR-XMS and the Phoenix American service offering gives fund managers the broadest field of options for fundraising and ongoing investor servicing.
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