Five Steps to Developing Productive Investor Relations

When a management team finds themselves under the ownership of private equity shareholders, it’s crucial to understand how to navigate this unique relationship effectively. Private equity firms bring their own set of expectations, strategies, and timelines for achieving returns. In this blog, we will explore five top tips for management teams to successfully manage their investor relations and maximize value creation during their ownership period.

1. Understand Your Private Equity Partner:

To effectively manage your private equity shareholders, it is essential to thoroughly understand their:

  • Operating Model: You need to shift to their preferred reporting format asap, give them what they want quickly and efficiently. Every PE house will have it’s own style and approach to investing and supporting their portfolio companies. Some will deploy the Investment Director, who did your deal with a more junior associate, others will offer a bench of operating professionals who will be deployed to assist in value creation, transformation and reporting initiatives.  
  • Fund cycle: PE funds have 10 yr. cycles; 5 years investing, 5 years selling. It’s important to understand where you sit in the fund, are you one of their first or last investments? The percentage of the fund deployed will give you a sense of how long they will hold you. Remember they will be fund raising again once they have deployed approximately 50% of the current fund and they are likely to want to demonstrate they have invested in and exited some of their portfolio before they initiate a new fund raising process.  
  • Track record: Institutional investors expect a 2.5x return on their money so try to understand how your investors previous and more importantly current funds are performing. Where do you sit in their portfolio, in terms of performance?  

Take the time to familiarize yourself with the individuals on your board and the leadership team of the private equity firm. Each firm has its own approach, style, and availability of resources. By understanding their target returns and valuations for your business, you can align your strategies and expectations accordingly.

2. Understand their View of Your Business and Value Creation:

Once the initial investment phase is over, it is crucial to establish a joint view with your private equity partners on the drivers of growth and value creation.

  • Identify the key drivers, create a plan, and set clear goals for achieving them within the limited timeframe of private equity ownership.
  • Ask yourself, “What does the business need to look like at exit and what is the time frame to get here?” . Do you have the right people on the bus and in the right seats to deliver the new value creation plan in the exit horizon? Use the 9-box talent model to map out what development, recruitment, firing and nurturing you might need to do.
  • Analyse and mitigate risks while ensuring your business functions are aligned with the value creation plan.
  • Adopt a cash management mentality and focusing on metrics such as covenants, returns on investment, and cost savings will help demonstrate progress.

3. Build Relationships of Trust and Transparency:

Developing strong relationships of trust and transparency with your private equity partners is vital. Communication should be open, frequent, and data-driven.

  • Establish a reporting structure that provides clarity through key performance indicators (KPIs), monthly updates, and weekly dashboards.
  • Be proactive in sharing information, and do not shy away from admitting uncertainties. Deliver bad news promptly, accompanied by potential solutions.
  • Be very clear on roles and responsibilities for the Board members as well as your direct reports. With your Chair take control and own the board agenda, avoid being led by your investment partners.
  • Over-communicate and foster a culture of transparency from day one.

4. Deliver Reporting Needs, Formats, and Resources:

Understand your private equity partner’s reporting requirements and provide the information they need in a timely manner.

Different private equity firms may have varying expectations, but most have automated basic reporting systems in place. By meeting reporting deadlines and being transparent in your communication, you can minimize intervention from your private equity partners.

Consider dedicating resources to reporting, business information management, and projects to ensure smooth operations and compliance in order to improve your investor relations.

5. Think about the Exit:

While it is important to focus on value creation during the ownership period, management teams should also keep the eventual exit in mind.

  • Ask the buyer, advisors and bidders to provide their (negative) feedback on the business and the process as soon as it is complete:
    • What made them nervous?
    • What did they see as the value drags?
    • Where did they believe the value lay?  
  • From which develop a to do list of what to fix. The lesser issues you can build into your new 100 day plan, the larger more complex problems you can discuss with your new investor in the first strategic planning day.   
  • From the outset, develop a hypothesis about what makes your business attractive to potential buyers, whether they are other private equity firms or trade buyers.
  • Begin building relationships with potential buyers and learn from them what aspects of your business they find appealing. This knowledge will help you refine your value creation plan and make informed investment decisions that align with exit objectives.


Effectively managing private equity shareholders requires a thorough understanding of their expectations, close collaboration, and open communication. By following these five top tips, CEOS can establish strong relationships with their private equity partners, focus on value creation, meet reporting requirements, and strategically prepare for an eventual exit. By aligning goals, maintaining transparency, and delivering results you can optimize your investor relations and improve your odds of delivering investment success.

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