Raising and retaining investor capital is critical to success in the investment management industry. Fund managers must build a compelling case as to why they should be entrusted to preserve and grow a fund’s assets, and by extension the assets of the fund’s investors. Managers have a responsibility to ensure that investors have adequate information to effectively monitor and make informed decisions regarding their fund investments.

Investor relations (“IR”) is a strategic management responsibility that aims to integrate finance, communication, marketing and regulatory compliance.  IR is the face and voice of the manager, working to gain credibility, trust and visibility for the manager in the investment community.  Without these three components, managers may not be able to attract investors or they may be faced with investor retention issues and, consequently, an inability to execute their investment strategy in a convincing manner or to adequately plan.

The elements of IR can be grouped into the four main categories:

• Business development;
• Marketing;
• Investors services (sometimes called “client services”);  and
• Regulatory compliance.

Many of the functions performed by IR professionals involve highly regulated activities.  Because this Guide would be an unreadable tome of regulatory prescription that would be out of date as soon as it was published if it was too specific about the regulations that apply in this area, the Guide is set at a higher level.  However, IR professionals should take steps to educate themselves on the applicable legal requirements that apply to their activities and to keep themselves informed as those requirements evolve over time.

A coordinated effort among all areas of the manager’s team is required to align its activities with the relevant regulations in all applicable jurisdictions. The IR team must work closely with compliance and legal staff to ensure that all interactions – including initial contact, marketing material distribution and written or verbal communications with investors and potential investors – are compliant with applicable regulations. Managers should establish clear guidelines and controls for communication with investors and the public, and for the review, distribution and retention of any materials that are subject to regulation.