Putting on the Annual Show

As the year comes to an end, many firms will be preparing for their Annual Investor Meeting. The annual meeting is one of the core tools firms use to communicate with their limited partners. Often, it may the only time in the year that you meet with your LPs face-to-face, so it is imperative to make the most of this opportunity.

Unlike a public company that interacts with their investors and the public through quarterly conference calls, earnings announcements, investor conferences and the financial media, the investor relations toolbox in private equity is bit more limited. However, I believe emulating the level and frequency of communications provided by a public company is necessary to some degree given today's environment of increased demand for transparency and frequent updates. With most PPMs requiring private equity funds to hold an annual investor meeting, this truly is one of the most important tools available for GPs to make a positive impression.

The annual meeting is a chance for management to personally present its version of the state of the company’s business results. It provides an important platform for validating investors' decisions to commit to the current fund. Most importantly, it serves as an unofficial, yet vitally important, catalyst in the inevitable march to the firm's successor fund. The annual meeting also provides the opportunity to underscore, in a sophisticated way, a firm's strategy, institutional values and institutional philosophy.

While there is not one specific prescription for every firm to follow in putting together a successful and meaningful annual investor meeting, there are some general guidelines that are universal. Here are some tips to make the most of that once-a-year event:

• Preparation. Annual meetings are not the time to improvise. Once the required formalities are complete, make sure you are prepared to deliver a well-scripted speech, along with a dynamic, rehearsed Power Point presentation or slide show. Using a tele-prompter (such as the President uses) is a great way to enhance the professional look and delivery of your presentation.

• Start and end on time. Late starts are sloppy. Demonstrate that you value the attendees’ time. Also, end promptly so that you do leave time for a Q & A session. Offering a discreet way for LPs to ask questions -- i.e. via text or e-mail -- during the meeting is a great way to encourage dialogue. The CEO, chief financial officer and other significant managers should be available to answer questions.

• Provide an overview of the past year and define your vision for the future, including all aspects of growth.

• Show unity. Displays of internal conflict will undermine management’s credibility.

• Be frank. Address the impact of negative forces and events your company has experienced.

• Be on the offensive.  Meaning, be forthright about your challenges. If you are upfront about your challenges, you won’t have to be defensive if an irate investor decides to voice his or her dissention.
  

• It's not just substance - style matters too. Humans are programmed to respond to anecdotes, not data. IRRs and multiples are important statistics, but more compelling is the story about how you identified a specific issue, how you worked through it and how that contributed to the bottom line. This is certainly a better way to make your facts more memorable. 

• Ask for help.  Whether it is for graphical support, logistical expertise, presentation training or a pair of eyes and ears that knows what to look and listen for, there are skilled professionals who can help ensure that you take your presentation to the next level.