As an investor relations manager, communicating with investors is an important part of your job. It’s how you keep them updated on their investments performances.
However, gathering, organizing, and distributing this information can take a lot of time. That’s why most general partners (GPs) and IR managers have established processes for investor reporting.
What is investor reporting?
Investor reporting refers to the ongoing tasks of updating LPs on the performance and status of their investments.
This can involve sharing financial statements, project and asset reports, distribution data, occupancy rate data, and any other relevant documents. The goal is to be transparent about the investment to secure investors’ trust and confidence.
After all, LPs may have a lot of capital at stake. They deserve to know how it is being used and what their returns look like.
Common investor report examples
While investor reports vary from firm to firm, here are some of the most common ones:
Quarterly reports. These are issued every three months to update investors on a property’s or fund’s performance, operational activities, and overall financial health. They can include income statements, balance sheets, and cash flow summaries.
Annual reports. These are issued once per year to provide a comprehensive overview of a fund or property. Among other things, they can include performance summaries, property valuations, and market forecasts.
Capital account statements. These inform investors of their share of an investment over a specified period. For example, they can detail an investor’s opening balance, contributions, distributions, and ending balance.
What should an investor report include?
An investor report can include many elements:
| Property details | Location, size, type, number of units, any unique features |
| Financial statements | Income statements, profit and loss statements, cash flow analysis, cap rate |
| Return metrics | Return on investment (ROI), internal rate of return (IRR), equity multiple, cash-on-cash return |
| Market analysis | Market trends, property comparables (comps), population growth, job growth, average rent |
| Risk assessment | Statistics on potential market downturns, tenant defaults, and unexpected operating expenses |
| Property management overview | Occupancy rates, tenant turnover, and maintenance issues |
| Compliance and legal information | Local building codes, zoning regulations, and other legal requirements |
| Corporate governance | Rules, practices, and processes by which real estate investments are directed and controlled |
| Future projections | Forecasts for future rental income, operating expenses, and property value (appreciation) |
Common challenges in investor reporting
Of course, real estate investor reporting has its challenges:
1. Customization limitations
Many existing reporting solutions lack the flexibility to fully customize reports to meet specific investor needs. This limitation can hinder the ability to present data in the most relevant and professional manner, reducing the overall impact and clarity of the reports.
2. Manual creation for each report template
The process of manually creating report templates for each reporting cycle is not only time-consuming but also prone to human error. This inefficiency can lead to inconsistencies and inaccuracies in the reports, making it challenging to maintain high-quality investor communications.
3. Cumbersome receipt management
Preparing and managing a comprehensive list of recipients who are to receive reports can be a cumbersome task. Sorting and filtering through spreadsheets to ensure every investor gets the correct report adds another layer of complexity and potential for mistakes.
4. Inefficient report distribution
Distributing reports to investors one by one via email or CRM systems is highly inefficient. This manual process not only takes up valuable time but also increases the risk of errors and delays, ultimately impacting the timeliness and reliability of the information delivered to investors.
5. Data management
Commercial real estate investing involves a lot of data. There’s a lot to keep track of across property, financial, market, investment performance, legal, and risk assessment data.
Unfortunately, data can be siloed within different property types, investment structures, partnerships, and departments. Consequently, accessing and organizing it can be challenging.
Furthermore, last-minute changes to property valuations or your company’s financial performance can have ripple effects on other data, requiring swift report revisions.
6. Security
By 2027, the estimated global cost of cybercrime will reach $23.84 trillion, up from $11.5 trillion in 2023. Consequently, GPs must take special care to protect investor data.
This includes using strong passwords, investing in security software, and managing access rights across users internally and externally.
Furthermore, it’s important to double-check and cross-reference data points to comply with reporting requirements. If you’re not careful, an innocent mistake could land you in hot water.
7. Timeliness
LPs want the latest investment updates, so investor reports must be timely. However, creating regular, custom reports can be tedious and time-consuming work, especially when done manually, with a large portfolio, or for many investors.
Best practices for reporting investor updates
To make the most of your investor reports, follow these best practices:
Keep them consistent
Whether you answer to tens or hundreds of investors, keep your reports consistent. This not only fosters accountability and trust but helps optimize workflows. A standardized investor relations report template-even if it is customized to each investor-can save you valuable time.
In addition, maintain a steady reporting cadence. Annual, quarterly, and monthly reports should be delivered on a predictable schedule so investors know what to expect.
Give a complete picture
To further improve your investor reports, make them comprehensive. Each should cover:
| Highlights and lowlights | Report the latest investment milestones and challenges. |
| Financials and KPIs | Summarize the latest financial statements and investment return metrics. |
| Project wins | Share any recent leases signed, renewed, or improved. |
| Key hires | Announce any new team members, such as fund, asset, or property managers. |
| Asks | Request any capital contributions, approval for new investments, budget increases, or changes to the investment strategy. |
How can technology facilitate investor reporting?
Fortunately, modern tech can streamline investor reporting. Here’s how:
Automation
Whether it’s an online report builder or a fully-fledged investor relations management platform, automation tools can be a major time-saver.
For example, they can gather investment data and organize documents for you for each investor’s individual report. Artificial intelligence (AI) and machine learning (ML) models can automate many manual processes.
Communication
With the right investor relations software, you can have reports sent out at regular predetermined intervals, never missing a deadline.
For example, Agora lets you import bulk documents to automatically match and send Schedule K-1s and other documents to investors.
Plus, automating investor communication can reduce human errors that crop up from calculating numbers by hand or relying on scattered spreadsheets.
Document management
Though keeping track of files can be challenging, document management software makes it easy by doing the heavy lifting for you.
For example, Agora lets you upload documents in bulk and then identifies, sorts and assigns them by investor name, document type, and entity. It also lets you quickly find documents with advanced search and filtering capabilities and gives you control over what documents are visible to each investor.
Efficiency
Ultimately, leveraging modern tech can make investor reporting more efficient. The time and effort saved from tedious tasks can then be redirected to other work, such as business growth and development.
Investor reporting trends
Now that you know what investor reporting involves, here are some industry trends to consider:
Investors expect more transparency
In today’s digital age, people are accustomed to abundant information access. Investors are no different. They expect to stay informed on the status of their investment throughout its lifecycle. As a GP, you can provide this information via regular reports and an online investor portal.
Making the case for long-term value creation
Real estate is a popular long-term investment. But now that commercial property values are taking a dip, investors are especially sensitive to investment performance. They want to know that despite short-term losses, their capital will grow well into the future.
A shift towards digital reporting
While real estate has lagged behind other industries in terms of digital innovation, the days of paper reports are quickly dwindling. Many investors now expect to get updates via email and online investor relations portals and dashboards.
How Agora can help with the investor reporting process
Ready to take your investor reporting to the next level? Agora can help.
Our Report Builder is the first of its kind in the real estate industry and makes it easier for firms to create custom reports for investors and optimize back-office processes. The Report Builder is highly customizable, so you can easily create all your investor reports including Distribution Notices, Quarterly Reports, Capital Account Statements, and more on a monthly, quarterly, and annual basis, as needed.
You are also able to create reports with tables, text, images, dividers, and a range of other dynamic fields. Each auto-populates with data tailored to specific investor profiles while letting you further customize the content and appearance to your liking. For example, the report builder lets you add your logo, colors, and style to each report, thereby elevating your professional image and brand.
To see how Agora’s Report Builder can improve your investor relations, consider booking a demo today!
Conclusion
Ultimately, effective investor reporting is part science and part art. Among other things, it requires efficient workflows, data accuracy, and visual appeal. However, with the right investor relations software, you can have all of the above.
