How do you report your progress to limited partners?

1 Why report your progress?

Reporting your progress to your LPs is essential for several reasons. First, it shows that you are accountable and responsible for managing their money and delivering returns. Second, it helps you communicate your strategy, vision, and value proposition as a fund manager. Third, it enables you to share your insights, challenges, and opportunities in the market and the portfolio. Fourth, it allows you to solicit feedback, advice, and support from your LPs, who may have valuable connections, expertise, and resources. Fifth, it fosters a long-term relationship with your LPs, who may be interested in investing in your future funds or co-investing in your deals.

2 What to report?

The content and format of your progress report may vary depending on the preferences and expectations of your LPs, the stage and size of your fund, and the frequency and timing of your reporting. However, some common elements that should be included are a fund overview, portfolio update, market analysis, fund news, and LP engagement. The fund overview should provide a summary of performance and key metrics such as IRR, MOIC, and NAV. The portfolio update should highlight progress and performance of each portfolio company. The market analysis should demonstrate how you are adapting your strategy in response to trends, opportunities, threats, and competitive landscape. Fund news should share any relevant news or events that involve your fund or portfolio. Finally, LP engagement should acknowledge LPs for their trust and support while inviting them to participate in activities or events of interest to them.

3 How to report?

The mode and frequency of your progress report may depend on the preferences and expectations of your LPs, the stage and size of your fund, and the timing of your reporting. However, some common methods and best practices you should follow include emailing a clear and concise subject line, using a friendly and professional tone, attaching a PDF file, and providing a link to a secure online portal. Additionally, you should consider scheduling a call with your LPs at the end of each quarter or year, preparing an agenda, allowing time for Q&A and discussion, and following up with a summary and action items. Finally, it is recommended to arrange a face-to-face meeting with your LPs at least once a year, prepare an interactive presentation that showcases progress, highlights portfolio companies, and demonstrates value. By following these tips and best practices for progress reporting, you can strengthen your relationship with your LPs.

4 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?