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With transaction volumes down by 55% year-over-year, it wouldn’t be an understatement to say that the real estate market is in a significant downturn.

During this uncertain time, many firms understandably exercise caution. However, experienced players for whom it’s not their first rodeo know to seize this invaluable opportunity to restructure their investment management operations from the ground up. 

Restructuring your investment operations – why now? 

Overhauling your operational infrastructure requires long-term strategic planning and research. It also takes an adjustment period. 

These are all reasons why it’s best not to do it on the go when you’re too busy managing and sourcing deals but rather when the deal volume is low and you can devote your full attention to this project. 

By doing this restructuring now, you will be able to jump back into action with a leaner, more efficient operational function while maintaining the agility to scale when needed. 

Outsourcing is a go-to solution for many firms looking to reduce operational costs while maintaining operational flexibility. 

When devising your restructuring plan, it’s essential to determine which operations to keep in-house, which to outsource. But equally important, the questions should be asked – is conventional outsourcing (meaning hiring an external service provider) the best solution?

In-house or outsourcing – are these the only options? 

Real estate firms are no strangers to outsourcing. The first instinct for firms looking to keep their in-house operations lean and efficient is to outsource what they can. 

To improve efficiency and streamline processes, real estate firms are outsourcing more middle and back-office work. This allows for more operational leverage and flexibility. 

But a conventional outsourcing approach usually has some undeniable drawbacks: 

  • No direct control over operational quality.
  • Communication and coordination challenges.
  • You’re dependent on the outsourcing provider’s performance.
  • Limited availability due to multiple projects. 
  • In-house personnel have a better understanding of your business compared to outsourced service providers.

With fundraising, deal management, and investor relations, there is little room for compromise in providing investors with transparency, accountability, and timely reporting.

So how do you combine the benefits of outsourcing while still keeping in-house quality? The key is to keep the added value of the in-house personnel augmented with the help of tech and automation solutions designed specifically to streamline investor relations management and fundraising operations.

A robust and comprehensive solution can automate up to 60% of operations and act as a natural extension of your in-house team for a fraction of the price. 

Moreover, it gives you the agility to maintain cost-efficiency when deal volume is low and scale fast when you need more hands on deck. 

What does an investment management software solution include?

A comprehensive investment management software solution usually includes the following main features and capabilities:

  • An Investor Portal to help investors access information, communicate, view their portfolios, and invest in new deals. 
  • An investor CRM to manage all investor relations and communications. 
  • Fundraising software to automate and streamline the fundraising process with online data rooms and customized subscription flows. 
  • Automated reporting tools to generate and send all types of investor reports (capital calls, distributions, K-1s, and more). 
  • Smart document management, with the ability to automatically identify and sort different document types and auto-assign them to the correct investors/deals. 

Most importantly, all features are part of one cohesive solution rather than separate stand-alone features.

By implementing technology to automate repetitive tasks, companies can enable their teams to concentrate on more significant responsibilities, such as building better relationships with investors, responding to market fluctuations, and seizing valuable opportunities. 

Is a tech solution right for your firm?

There’s no one answer to whether and how companies should outsource part of their operations and what part technology should take in the restructuring. The answer varies from company to company and depends on specific circumstances. 

However, here are some questions to consider when making the decision:

  • What are your current overheads?
  • What will be your core overheads assuming zero deal volume? 
  • Can you dedicate one person to using the tech solution, assuming it will save you time, costs, and human resources? 
  • How many active investors do you have? How likely are they to use direct online access to their portfolios via an online portal? 
  • What is the pricing plan for the tech solution? Is the subscription model based on fixed packages, or is it EUM-based?   
  • What are your current scaling capabilities if the market picks up rapidly and you need to seize immediate deal opportunities?

Smart restructuring – the pathway to ride out the storm and emerge stronger

Restructuring investment operations during a market downturn is a significant strategic move for real estate firms seeking to optimize efficiency and adapt to changing conditions.

While outsourcing offers cost savings and flexibility, it may also present challenges in maintaining control and quality. However, by leveraging a technology automation solution, firms can streamline processes and improve investor relations while keeping the quality and control that come with in-house management. 

By implementing a comprehensive investment management software solution, teams can focus on building valuable relationships and capitalizing on market opportunities while keeping it lean in terms of costs. 

Ultimately, the right approach to restructuring will depend on each firm’s unique circumstances. 

Are you interested in discovering whether an investment management tech solution is right for you? 

Modified Date & Time : 11 Jan 2024, 09:59 am


Gilad is a content manager at Agora. He holds a master’s degree (LL.M.) from Columbia Law School and a degree in Practical Electronics Engineering. Before becoming a content manager, Gilad practiced law as a commercial litigator.


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