This month we sat down with, Mrs. Dasha Waller, CGI’s Director of Investor Relations. We asked her to discuss CGI’s methods that she believes will keep our investors coming back and referring friends.
Q: What are the best practices for Investor Relations personnel when working with the high net worth investment crowd?
DW: Investor relations executives should value the trust and credibility that is built with their high net worth investors equally in comparison to returns that are produced from investments. The investors are the most important component to a firm’s success and so they should be provided with a single point of contact who is always creating an environment of transparency.”
Q: How do you build that environment of transparency? Can failing to do so sabotage the relationship to a point where it does not work?
DW: Providing quarterly reporting, which is an industry-wide standard, creates transparency because the investor is routinely aware of results and updates related to their investments. Many companies now also provide access to web portals housing these reports that can be accessed by investors or their managing parties at any time. Most importantly, providing an investors relations contact is key, because it opens up the channels of communication between the firm and the investor who may naturally have questions related to reports or one-off requests and inquiries. Being consistently late with reports or difficult to contact can definitely affect relationships with investors.
Q: What are investors looking for when deciding to invest in Multifamily and Mixed Use real estate?
DW: Investors tend to be attracted to multi-family or mixed-use investments because many times there is the cash on cash opportunity from income producing properties or the value-add upside potential if the manager has development and management expertise that can increase rental rates and impact NOI significantly.
Q: Is it easier to “sell” investors on traditional Multifamily properties or has Mixed Use become the more popular investment?
DW: I think “selling” an investor is more dependent on the opportunities presented and the track record of the firm and its team, as well as the goals of each individual investor. At the end of the day, investors want to make favorable risk-adjusted returns while believing in the strategy and expertise of the manager.
Q: Have investors expectations changed over the years?
Most High Net Worth and Institutional investors are aware that real estate is cyclical and understand that expectations for returns can shift with the market. Investors often look for managers that have a niche focus because they want to know that their investment is in the hands of someone who understands select markets and property types extensively. A successful manager may look at secondary markets for example if there is a high employment growth trend or proximity to transient avenues. Many times, individual investors make the mistake of seeing good investments in places where they would want to live instead of where the value-add opportunities could be.
Q: What can you do when investors make the mistake of only wanting to invest in places they want to live? How difficult is it to make them see the big picture?
Managers can back up their strategies with evidence of proper vetting efforts that led them to focus on select markets. Communicating how they expertly compared variables such as those mentioned above at both the macro and micro level before narrowing their radar onto some markets can help investors see the big picture.
To learn more about investing with CGI or to refer a friend, please contact Dasha directly: DWaller@cgistrategies.com