From Prospect To Capital Partner: How To Expedite Document Reviews And Signatures With Technology
For general partners managing commercial real estate investments in a private equity deal, fundraising efforts ensure their properties' success. Along with getting a bank loan, they can also seek out funding from limited partners in the form of individual or institutional investors or family offices.
Through these partnerships, GPs own and manage the assets and can allocate capital toward purchasing and developing real estate. Limited partners are passive investors that provide additional capital and receive profits without taking part in the day-to-day operations. They can be eligible for tax benefits such as depreciation and can potentially enjoy strong returns.
Once GPs find interested LPs, they typically send over a subscription agreement — a legally binding document for both parties that details the terms and stipulations around the investment.
This stage, however, is where potential delays and roadblocks may arise, especially if they are relying solely on email correspondence.
Julia Benichou, product marketing manager for real estate investment management platform Agora, said that this paperwork can be multiple pages with complex legal language, and, in the case of institutional investors and family offices, may require more than one set of eyes — all of which can draw out the review process. If there are questions about the document or it needs to be forwarded to another party, it turns into one long email chain and risks miscommunication, which can start the partnership off on a sour note.
Her advice for GPs: Take advantage of technology tools that streamline onboarding and investing and limit back-and-forth communications.
“Having technology makes the entire investing experience much easier,” Benichou said. “If the process requires less effort from investors, it makes them more inclined to participate, which ultimately results in increased capital for the GP.”
Agora’s investment management platform provides GPs with tools that let them view their fundraising status, house and organize documents for LPs, create reports that provide LPs with updates to their investments in real-time and create marketing materials and professional data rooms to attract new investors. LPs can also use Agora’s Investor Portal to view and manage their investments.
When onboarding new investors, GPs can send them their paperwork via the platform’s Smart Questionnaire, which digitizes the agreements and provides guided questions to help prospective investors and their teams fill out the relevant sections of the documents. Some questions involve yes or no answers, while others provide multiple-choice options. Information from repeat investors who have already input their information into the Investor Portal can be auto-filled in future documents, allowing for a quicker, more seamless process, Benichou said.
She said that with the Smart Questionnaire, documents can be sent simultaneously to multiple parties to view on their own time without the need for one party to sign and then forward the document to another party.
“A lot of times with institutional or family investors, the company wants to fill out most information on behalf of the investor and they only want the investor to review and sign since they are managing the investor’s capital,” she said. “Because multiple people can access and fill out this questionnaire, the Smart Questionnaire is a good fit for those more sophisticated investors.”
It also allows investors to quickly correct mistakes. When this happens, Benichou said that GPs can put in a revision request in the portal that details where the mistake was made.
“Mistakes can happen, which is understandable because these are complex documents and investors aren’t lawyers,” she said. “All the investor needs to do is log into their portal, go back to the questionnaire and easily edit the incorrect fields without needing to fill out an entire subscription agreement from scratch.”
Taking steps to expedite the review and signing process can help with building long-term relationships with investors, she said. Keeping documents and communications organized and accessible in real-time on one platform during and after onboarding also helps showcase professionalism and transparency.
“Most of the time, investors commit capital because they trust the general partners and have a strong relationship with them,” she said. “It’s up to the GP to actively manage the deal and deliver a smooth, professional experience throughout the investment life cycle.”
General partners who are interested in learning more about streamlining onboarding through Agora’s Smart Questionnaire can check out Agora’s Turn Prospects Into Investors webinar.
This article was produced in collaboration between Studio B and Agora. Bisnow news staff was not involved in the production of this content.
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