Why Investors Want You To Invest In CRM

Mar 22 2010 | 1:45pm ET

By Bob Guilbert, Managing Director, Eze Castle Integration -- It is no secret that investors are demanding more information from their hedge funds than ever before. Disgraced financiers like Bernie Madoff have made investors cautious and controlled when it comes to where, and with whom, they place their investments. Today’s investors hold funds to a higher standard and demand that they maintain efficient operations that promote greater accountability.
Resonating most with hedge funds and investment firms are requests for increased transparency and reporting. Customer relationship management tools are becoming increasingly popular avenues through which funds can provide their investors with accurate information in a reliable and comprehensive format, as well as give themselves a competitive edge in the hedge fund market.

What is a CRM System?

Customer relationship management applications, or CRMs, were designed to support companies looking to easily and efficiently track customer information. CRMs have evolved in recent years, and many companies now offer hedge-fund-specific CRMs that support the unique hedge fund workflow and serve both the fund and the investor.
As a tool that supports investor relations, a hedge fund CRM application gives funds the ability to centralize all of their investor data, including contacts, documents and correspondence, while also allowing investors to access critical fund information at any time, including transaction history, account balance statements, performance estimates and other investment data.
In order to become more accountable to investors and provide them with greater transparency and reporting, funds require investor account management capabilities, which can be found within hedge fund CRMs. Firms can easily track investor transactions, centralize subscription documents and monitor expected inflows and outflows, all within one comprehensive application. No more sifting through spreadsheets and multiple back-office systems. Hedge fund-specific CRMs give funds the unique ability to manage all investor relations from a single portal, making business more efficient and satisfying investors at the same time.

CRMs Are Not Just For The Big Boys

Many firms, particularly smaller funds, think that CRM applications are out of their league and are only for larger firms. But the truth is that funds of all sizes need an efficient system that can easily and completely manage their investor relations. Whether the number of a fund’s investors can be counted on one hand or add up to the triple digits and beyond, a CRM solution is a valuable tool for investment firms. On top of that, investors are choosier than ever, which means firms need to go above and beyond with exceptional investor relations if they want to be successful.
More so than ever before, investors are interested in each fund’s operational infrastructure and back-office management, which includes investor relations. An investment-focused CRM might be what sets a firm apart from competing hedge funds. These applications are built specifically to support and work within a hedge fund workflow, and often have the ability to integrate with fund administrators and other relevant parties, generating greater efficiency and reducing the time funds spend communicating with multiple parties.
Hedge fund CRMs have the ability to scale with a fund, can support firms with five people or 500 and can track relationships with thousands of investors. While generic CRMs are readily available to businesses of all kinds and can easily manage customer data, a hedge fund CRM leaves nothing to be desired. All features and functionalities relevant to an investment firm are built in and readily accessible.

Key Features 

Integration is one of the most important features of any CRM. These applications should not create more problems or require more time than employees at a busy investment firm have to devote. CRMs generally come fully integrated with key applications, i.e., Microsoft Outlook, which lends to more flexibility and less time and money spent on coordination between multiple applications.
CRMs also act as great sales and marketing tools for hedge funds. Most applications come with mass e-mailing capabilities, which allow funds to quickly and easily communicate with all investors and potential investors, while also giving investors the immediate information they require. Funds can also manage their sales pipeline, identifying the best prospects and new products based on the investor’s preference and past investment history.  Fund specific CRMs may be configured to automatically create investor-facing reports, automated statements, and performance estimates, among other things, all from one platform.

Another increasingly popular feature within CRMs is an investor portal or Extranet – a secure site where investors can log in to download specific reports made available by the fund. By giving investors easy access to relevant documents and reports, funds can increase confidence and satisfy growing demands.  Fund managers can also log into their CRM application from smart phones and the Internet while traveling to review and add contact and fund information, and send e-mails to their investors.

CRMs also assist during the audit processes, as they provide a complete history of information changes including what, when and by whom records were changed, added or deleted from the system.  As hedge fund regulations are undergoing changes, this feature may become more popular with compliance-sensitive firms.

In today’s marketplace, when competition for investors is more difficult than ever, a CRM might be just the thing an investor is looking for in a fund. It can be seen as a true investment in a firm’s business, appearance and professionalism. When it all boils down, operating with a hedge fund CRM and eliminating disorganized spreadsheets and Word documents could be what sets one firm apart from the rest.

Bob Guilbert is managing director of marketing and products at Eze Castle Integration. With more than 20 years of IT experience, he is responsible for leading all of Eze Castle Integration’s marketing, partnership, and product development functions. Prior to joining Eze Castle, he was vice president of business development at Virtual Iron Software, a venture-backed startup offering enterprise-class data center virtualization software. At Virtual Iron, Bob developed and oversaw all facets of business development and channel management. He has also held senior marketing and business development positions at Double-Take Software (formerly NSI), EMC Corporation and Digital Equipment Corporation.

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