The AI-Powered GP: Scaling LP Communications Without Losing the Human Touch

AI-powered fund management platforms are helping GPs create more time for meaningful LP engagement.

How have LP expectations changed regarding the way they access fund information and digest fund data?

Kathryn Pothier: LPs are inundated with information requests today, and they're being contacted constantly by GPs, whether that's in search of capital or for direct investments. They're under pressure to create portfolios that consistently outperform the benchmarks they've set, and they're under pressure from their investment committees to manage massive portfolios.

When they need information from us, the GP, it's both a responsibility and a massive opportunity to provide that information in a really efficient way.

I think the substance of the requests hasn't necessarily changed dramatically, but the expectations for the method of delivery and the timeline for those deliverables have absolutely increased across the board.

How can an AI-supported organization ensure those early touchpoints set the right tone for a professional relationship?

Olivier Mangez: We need to accept the fact that expectations from LPs have completely changed over the last few years. They expect real-time information, whereas a few years ago they were very happy with regular, periodic reports. GPs need to adapt to this.

Today, you have platforms like FundCentre AI^TM that allow you to centralize information and provide this real-time data.

Another dimension is the due diligence questionnaire (DDQ). GPs today face a huge volume of DDQ requests from LPs, and most of the GPs we've met aren't necessarily equipped to respond quickly to this volume of incoming requests.

What we've been exploring is how to leverage AI to increase the pace from the blank page to a gray page, so the GP can focus their time on refining, fine-tuning and delivering a high-quality response to LPs.

LPs want more data, but they also need to understand and trust what they're seeing. How do GPs deliver that?

Mangez: It's really a mix of live data. A few years ago, LPs were happy receiving PDF documents, digging into them and trying to extract what they needed. Now their expectation is very different. They really want the data itself.

It's about providing the data and standardizing the data. We now have, for example, the Institutional Limited Partners Association (ILPA) reporting standard that helps put a framework around it so that, as an LP, you don't need to adapt to each GP. You can standardize the way you access data.

Then it's about the workflows you're putting in place and leveraging AI, which has really changed how we can deliver data faster and with greater accuracy. Accuracy is critical here.

As the volume of requests grows, how do GPs manage it?

Mangez: If you think as a GP that you can do this manually, it will just not happen. I was recently talking to a GP launching a fundraising process in the coming weeks. They were expecting one DDQ per day with an investor relations (IR) team of five individuals. How can you manage such a volume of information?

You cannot do it manually. Putting processes in place, investing in your data infrastructure and leveraging new technology are really important to being able to scale.

How much does speed of response impact the momentum of an LP relationship?

Pothier: I think it's essential. As Olivier mentioned, speed is one factor, but speed is no substitute for accuracy.

It's really important that the GP remembers what they have now saved themselves time for. If they're employing AI to help build these DDQs, maybe draft some responses or automate some of the processes that go into that, that's great. But how are you using the time that saves you? Are you using it to refine and fine-tune and make sure that all of the information that goes out is accurate?

That's what builds trust, not the speed of response. Most LPs would much rather have a fully accurate response in 24 hours than a partial response in 30 minutes — and even less so if it's wrong.

The volume of information that's readily accessible is also growing. LPs know to ask for it and know they should be asking for it — and therefore have come to expect it from all their GPs.

In our team, the first time an LP asks for something, we assume that's now going to be a regular deliverable because they need it. LPs don't ask for things they don't need.

They also want information they can interact with. The dynamism of the information, where it used to be more static, is really important for us to keep in mind.

At Epiris, we call that focused transparency. It's about giving the LP the information they need, in the way they need it, in a fashion that's clear and straightforward, but also detailed, thorough and adaptable to the audience.

Proactive is always better. That's the best version of speed. If you're communicating something before it actually needs to be communicated, that's the best you can hope for. After that, you want to be really timely with responses so you're never making an LP wait for something, especially if it's something you already have or could have thanks to technology.

How do permission-based access and AI-driven transparency strengthen investor confidence in GP operations?

Mangez: There's a massive volume of information that can be shared with LPs. The question is: Which information do you share with each LP?

Permissions are key at all levels. When you're sharing quarterly reports, capital calls, statements and other information, you need strong permission controls to make sure you segregate information.

But when you're leveraging AI technology and large language models (LLMs), how do you make sure the AI model will only use the information that should be available to one specific LP or another?

When you design and deploy the technology, you need to make sure that this level of permissioning also applies to all the tools you're deploying. If you're not very careful, it's very easy to leak information simply because a tool has access to information an LP shouldn't have access to.

Is a high-quality LP experience becoming a competitive advantage for GPs?

Pothier: Without a doubt. The LP experience is fundamental to their decision-making.

That experience is founded on multiple things. It includes the performance of the product or products they're considering and the GP's overall track record. It also includes the slightly more intangible aspects that are really key to making that decision: the team, the perception of the stability of that team and the relationship management approach the team takes to helping the LP get comfortable with what they're offering.

Whether it's a re-up or a brand-new LP, it should be the same sort of high-touch approach that makes the GP a helpful resource.

At the end of the day, there's never an obligation for an LP to invest in any fund. What I need to do is make sure I make the case as compelling as possible for them to consider it and then be available to help them through the entire process and make it easy, because there are always going to be competitive options in the field.

It's our job to prove our differentiation, and the experience is the underpinning of all of that.

Whether you continue to take care of your LPs during a cycle versus just when you're fundraising is a huge piece of information those LPs now use to ask, "Do I want to continue backing this GP? Do they really show that they care in between funds? Or do they consider it to be an episodic fundraising exercise where they're coming to me for capital only when they need it?"

There's now a much more well-rounded playing field for them to look at. Technology and what it enables is one piece of it that the LP is going to consider probably more than they have before.

Are you seeing a difference between GPs embracing technology and those still relying on manual processes?

Mangez: Of course. As Kathryn mentioned, LPs judge you based on how you communicate with them.

Nowadays, usually the first touchpoint that an investor will have with a GP is actually a digital touchpoint. This is how they'll assess the GP. The first impression matters a lot.

Being digital when you're a GP is the base of what you need to do. It's not optional anymore. I don't think LPs expect any GP today to have manual processes, manual reporting or manual communication.

They expect a portal. They expect processes to go fast and to get access to their data quickly. It sets the bar a bit higher nowadays for GPs, but the technology exists to achieve this.

Pothier: I think you have to have both. On the digital and analog front, we as GPs have to have both because that's what's going to deliver the best version of what we do to our LPs.

They want everything to be really buttoned down and well-articulated, with high-integrity data processing, but they also want the analog, human approach. So far, there isn't a tool that even approximates that.

You have to be careful not to conflate technology with actual client service and support. It's not the same thing. It is the support for the support. The support is us. It's us providing what we do to them.

How we use technology is one piece that can make us even better at doing it with way more data than we've ever had. But it's on us to use it well.

Is that combination of technology and human support becoming the industry standard?

Mangez: As Kathryn mentioned, digitalization of the process doesn't mean that we put people aside. LPs still want to have a white-glove approach, but they also want to be able to consume data much faster than they were in the past.

GPs need to manage this dual approach. It's key. We're not putting people aside.

What advice would you give a GP that still relies heavily on manual processes and hasn't invested in its tech stack?

Mangez: I think they should jump in. It's not so difficult. You need to do it.

At Intralinks, we're also here to help our customers. We value the personal touch and provide more than technology. We have teams that help our customers deploy their technology.

You need to start step by step. Probably you won't deploy AI right away, but having a portal is the first step you can take. Then you move step by step and structure your data. There is a path forward.

Pothier: It's never too late to make an investment as a GP in something that you've determined is the right next step to make.

There's commonly a temptation among GPs to be reactive to what's going on in the environment around us. That's tempting for lots of good reasons because we need to be seen as responsive. But we also need to actually be responsive to what's happening and react in the right way.

It comes back to being really clear about what it is we're there to do and what it is we're delivering and then building everything from that standpoint.

In doing so, you get a chance to be more proactive and ask, "Is this what we think is going to help us do this even better?" You can justify every decision as you make it.

You've got the support of your team, you've got the support of your investors, and you can say, "This is why we're investing in this tool. It's going to lead to this, which is going to lead to that."

You've spent the time, you've done your homework and you've picked the tools. And if you are late to the party, maybe it's for a good reason. But it's never too late.

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