How investment firms staff an IR function

In our ongoing discussions with investment firms, whether they're considering their first IR hire or looking to expand their IR team, we're often asked, "How do other firms typically staff a IR function?"

The answer, much like many aspects of IR in this industry, is 'Each firm is different'?

Numerous factors come into play when staffing a IR team - the size of the fund, the fund's investment strategy and the division of investor relations responsibilities among the team members, to name a few.

For instance, a private equity firm with a $500 million fund might find it suitable to have one mid-to-senior level professional, ideally with administrative support. Most of the time, we would see this person do most of the heavy lifting for their firm’s IR function. Leading fundraising and LP services with the help of the senior level deal team members as well as project management side of things sometimes with the help of either administrative, operations or even a junior deal team member.?

Yet, we've also seen firms of a similar size maintain a team of two or three IR professionals, either at varying levels of seniority or operating as peers. We have also seen firms of a similar size not have anyone just dedicated to IR, and their senior deal team members, and/or c-suite executives take up most of those responsibilities. In those situations, firms can rely on placement agents for fundraising and outsourcing companies for other main IR activities.?

It's crucial to ask the right questions to determine your firm's ideal composition. Are the IR responsibilities becoming too much to handle for our current team? Are the fees involved with outsourcing these activities becoming too high for us, budget wise and profitability for our LPs? What are our fundraising targets in the future? Will be need to increase our LP base??

Different strategies could add additional needs to the IR function. Multiple strategies could mean different sets of LP bases. Which would mean different sets of pitch decks and marketing materials, not to mention the fostering and monitoring of new and existing LP relationships. Add to that the potential of co-invest opportunities, which a lot of firms like to offer their investors to stay competitive, IR responsibilities can add up quickly.

In essence, staffing a IR function in PE isn't a 'one size fits all' situation. It requires a nuanced understanding of each firm's unique needs and objectives. This is precisely where Coastal Partners adds value. We maintain a robust network of candidates with extensive experience in these roles and have helped firms create and grow their IR teams.

So, whether you're looking to build out your IR team or considering your first hire, let's connect. We're eager to help.