Your Transfer Agent as a Profit Center
Part 1: New Investors

There are numerous ways that a third-party transfer agent can increase the efficiency of your fund operations, leverage economies of scale and save you money. But it gets better. A truly client-oriented transfer agent can considerably improve fund management’s ability to raise capital, retain investors and cultivate distribution networks. If a transfer agent provider has extensive expertise, is well equipped and is truly aligned with client goals, there are many ways your transfer agent infrastructure can dramatically boost fundraising performance. So, where does new capital come from, and how can a transfer agent help you raise more funds? It starts with new investors.

Distribution Relationships

An experienced transfer agent has worked with many funds deploying many different fundraising strategies. Your transfer agent should be able, and willing, to connect you with private equity marketing firms, managing brokers, digital marketing experts, design firms and others with whom they have long-established working relationships. To optimize your distribution strategy and maximize the visibility of your fund among potential investors, your transfer agent should have a referral network of distribution professionals with whom you can work effectively in conjunction with your transfer agent. The guidance and networking your transfer agent is in a position to provide with respect to fundraising is invaluable.

New Investor Onboarding

The experience of placing a new investment in your fund is the first impression your investors will have of your competence as a fund manager. Your transfer agent is in a position to make this process seamless and simple or frustrating and time-consuming. Your transfer agent should be equipped with the systems and integrations necessary to process new investments in whatever way you and your distribution partners prefer: Paper subscription documents, third-party straight-through processing portals, API connections to your website, mobile phone apps or crowdfunding platforms. There are many ways an investment in private equity and venture capital can be processed. Your transfer agent’s ability to take in investments efficiently and by any channel bolsters your reputation among investors and advisors and substantially helps your fundraising.

Advisor Data

You work hard to establish the selling agreements that will generate your investment capital. But are you current and communicating with all the reps within those firms in a position to sell your offering? Communication within broker-dealer and RIA firms is not always complete and reps move into, out of and into different roles within firms all the time. If your transfer agent can keep your selling advisor roster complete and up-to-date on an ongoing basis you can market to them selling partners systematically and make the most of your selling agreements. A transfer agent partner with an advanced shareholder database system that can track and update your roster of selling reps for your ongoing outreach substantially contributes to your fundraising.

Sales Reporting

The shareholder database system of your transfer agent partner should be able to produce sales reporting that gives you actionable data on your best-performing producers. This is a rarely seen capability but a few transfer agent companies have developed technologies that can provide insightful sales and marketing reporting output from the transaction data in the transfer agent system. With such a system in place, sales teams can prospect for new investments by identifying the most fertile ground highlighted by previous sales success. Which advisers have the strongest track records? Who are the most dependable and long-term investors? Which geographies are the most fertile? What are the demographics of the top investors? A transfer agent system can provide important sales intelligence essential to raising new capital.

Transfer Agent System Sophistication

In addition to sales reporting, specialized transfer agent systems can also help sales by streamlining the back office processes including new investment processing, capital calls, transfers and distributions. Connectivity to industry platforms like AIP and FAN Mail as well as custodians, wire houses and data aggregators streamlines data flow, eliminates avoidable errors and prevents process delays. All of this gives your fund an air of professionalism, your investors a sense of reassurance in their investment choice and advisors confidence in recommending your investment product. Your reputation and a successful and thoroughly professionalized fund manager is a significant factor in driving fundraising.

The return on investment that you generate as a manager is what attracts new investors to your fund. But you should look for the return on investment that you will receive by choosing the right transfer agent. With experience, relationships, sophisticated systems and a dedication to client success, the right transfer agent can do a lot to maximize your fundraising.