I recently had a conversation with one of our investors, and he paid us the nicest compliment. He said “I want you to know that the communications I get from Wildhorn Capital are the best and most professional communications I’ve ever seen. I’ve sent them to other operators as an example of how it should be done”. After we got done blushing, I thanked him for the compliment and we wrapped up our conversation.
I’ve gone back several times to reflect on that comment, and the feeling is always the same. We put a lot of time, energy and resources into our investor communications. Hearing a comment like that has us doubling down on our efforts and reinforced that as a key pillar to our company–we will always deliver best in class communications. When you consider the source–an experienced, savvy investor with over 50 passive investments in his career–it carries even more weight to us.
Perhaps it’s my background in marketing and subsequent default to communications, or just our simple belief that our investors own these deals as much as we do, but I’m shocked when I hear these comments. Just this past week another investor responded with gratitude (and almost astonishment) when she got a prompt reply from me after sending over a question about an asset she was invested in. The more positive reinforcement we get from investors, the more it drives us to continue. And, the more I wonder why the bar is so low for investors related to deals they’ve invested their money in and how they are kept informed.
Below are a few of the strategies, investments and tactics we utilize on a regular basis to keep our investors informed. Given the conversations we’ve recently had, don’t expect any of these to change.
Provide an online Investor Portal.
In today’s technology age, this may seem like a given. But I’m consistently surprised when we hear from investors who not only a) give us rave reviews for the portal we have but b) lament the fact other investments of theirs don’t have a similar reporting mechanism. We’ve previously touched on our portal and our growing number of investors. Having a secure place for every investor to see new opportunities, but more importantly review their investments and the performance of those investments–and quickly and easily access all documentation they might need–has been a very worthwhile investment, and really should be a cost of doing business for any operator of private investments these days. It makes our life easier and provides value for our investors–the definition of a win-win.
Monthly Communications.
For all of our assets, we send out a monthly update email with key highlights of the last month. I call this our qualitative update. Then, once per quarter (coinciding with distributions) we provide a detailed financial report with charts, graphs and pure raw numbers highlighting performance–our quantitative update. Two things stand out to us here, based on regular feedback we’ve gotten:
- Consistent and regular communications from operators is not the norm. We’ve had multiple pieces of feedback saying how refreshing it is to get the monthly updates, and how rare it is. Many investors have reported how they rarely, if ever, hear from some of their other investments and have to chase down their sponsor to know what’s going on. I know we experience that with some of our passive investments and certainly share in their frustration.
- Being candid is appreciated. In our reporting, we share the good, the bad and the ugly of current operations. We treat our investors like the owners they are, and keep them informed of everything happening onsite. I personally write all our updates, and share information that really only the asset manager knows. If we’re having staffing issues, we share that. If we’re seeing consistent water leaks, we share that. If we’re fighting with the county about our property taxes, we share that. Those are all real world examples of details we’ve shared in the last couple of months. The transparency and intimate details we provide keeps our investors connected to the property, and up to speed about what’s happening with their investment. Each update is customized, rather than having a formula to just report the bare bones.
As part of our monthly communications, we recently had to put our commitment to best in class communications to the test. Our investor portal provider had just rolled out a new communications tool–whereby you can send email communications to all of your investors. We reviewed and tested it as we explored the possibility of using this channel for our monthly updates. As we vetted it we thought it was pretty good–but there were a few things it didn’t quite to do. At the same time, our existing email platform changed their structure and pricing, and we were going to have to start spending a lot more money each month to continue with that service. This was the perfect storm–and test of our mettle and values. Move everything to our portal, where we could provide an 80% experience at no cost to us; or stick with our current provider where (we think) we can deliver a 100% experience but increase our cost. I hope you already know the answer: we chose Option B and upgraded our plan to continue providing the best experience possible.
As we continue to build Wildhorn Capital and bring on more and more investors–we just crossed over 500 active investors–we’re staying committed and focused on keeping our investors front and center of everything we do. We’ll keep looking for ways to “surprise and delight” them, even if that is something that takes extra time or costs extra money. If you’re a passive investor and not getting the communications you deserve, I challenge you to ask for, and demand, regular and detailed information.
Andrew Campbell is a native Austinite and Managing Partner at Wildhorn. He is a real estate entrepreneur who first broke into the business in 2008 as a passive investor. In 2010 he transitioned into active investing and management of a personal portfolio that grew to 76 units across Austin and San Antonio. He earned his stripes building and managing his personal portfolio before founding Wildhorn Capital and focusing on larger multifamily buildings. At Wildhorn, he is focused on Acquisitions and maintaining Investor Relations, utilizing his marketing and communications background to build long-term relationships.
