Take your CRE fund reporting to the next level

1. Identify your report’s audience and goals, start crafting your story

To support the long-term success of your fund, reporting must fulfill the needs of your investors. While investor reports typically surface from those developed by analysts and portfolio and fund managers for the management team, these must be carefully configured to give investors meaningful information.

Reports should start with the end in mind – a coherent understanding of what you want to achieve. They should provide clear links between a fund’s goals, risks, performance and returns and describe what drives investment fund value – all demonstrating why your fund is the superior choice.

It’s helpful to start by fully understanding your audience — who they are, what information they want, how they want to receive it and how they will use it. Equipped with these insights, you can present information in a way that meets their needs and expectations.

Things to consider:

• What is the purpose of this report?

• Who will use this report?

• What is most important to the report audience?

How to begin crafting your story:

• Develop a compelling narrative – think about the “secret sauce” that makes your fund successful and how you can demonstrate this value to investors

• Determine the data, KPIs and benchmarks that are important to your story – these factors represent the supporting evidence of your story

2. Plan and map data to provide appropriate context and information

Planning this data in an environment that continually generates data is crucial to provide investors with context and information that is of value to them.

Commercial real estate funds gather information from many data points that often speak different languages. Data may come from external market sources, property management systems, accounting system and business units. Errors can occur that lead to inaccurate or poor-quality data.

Data mapping, which refers to establishing relationships between separate data models from disparate sources or systems, is crucial for integrating and making sense of this data.

Things to consider:

• What are investors’ key questions that data can answer?

• What data is vital to the purpose of the report and to telling investors a compelling story?

• Is the data you intend to include reliable?

The ‘good data’ checklist:

• Is it up-to-date?

• Is it unbiased?

• Is it presented in a standardized format?

• Does it come from a reliable source?

• Is it accurate and transparent?

3. Use the right format and template, design for clarity

Since it’s challenging to capture people’s interest with data sets and financial records, the right format, template and design are central to building engaging reports.

Combined with a good story, the right format makes reports accessible, the right template makes them user-friendly, the right design makes them clear and appealing – and all support the bottom line.

Things to consider:

• What reporting format and template lends itself to investor preferences, the data and the narrative?

• Is the report optimized for viewing?

The format

As technology advances and facilitates gathering, analyzing and sharing data, investors’ reporting expectations are shifting. They want more timely information, more detailed information, convenient formats and easy access.

There are three general forms of reports:

• Dynamic / interactive

• Digital

• Static

The template

There is a wide range of standardized templates available for investor reports. It’s helpful to ensure these offer sufficient flexibility to allow you to adapt them as needed. Keep in mind that templates should accommodate the data and metrics your investors want to see and the formats they prefer.

The design

Well-designed reports make it simple for investors to get the information they want. Design should provide visual tools to help people understand complex data, correlations, patterns and trends.

• Are you visually presenting your data story in the best way?

• Do the visuals adapt for viewing on different devices?

• Have you laid out the report elements so they are easy to understand?

• Is the design effective?

4. Manage updates efficiently and effectively

Investors want to be kept in the loop. Providing regular, consistent reports to keep them informed about their investment demonstrates your fund’s commitment and expertise, which builds trust and confidence.

Establish a regular frequency, scheduling updates with not only regulatory requirements in mind, but also investor preferences. Given that reporting is resource and time intensive, it’s important to develop processes and integrate tools that will make report management as efficient as possible.

Things to consider:

• Have you gathered feedback about previous reports?

• Have you minimized the time required to prepare updates by establishing a content framework with the report’s contributors?

• Is your presentation consistent for investors to make comparisons from one report to the next?

Commercial real estate investment funds market themselves on executing on a mandate and delivering returns for investors. Your reports are integral to determining how well you are doing this.

Capitalize on reporting as an opportunity to differentiate your investment fund, reinforce investor relationships and secure your competitive advantage.