Raising capital for real estate investments has become more challenging than ever. Economic uncertainty, fluctuating interest rates, and shifting investor priorities have made it harder for firms to secure commitments from limited partners (LPs). As a result, total capital commitments to real estate investments hit a 12-year low in 2024. U.S. pension funds, for example, committed only $31.6 billion to privately managed real estate vehicles—the lowest amount since 2013.*
Many firms that once raised capital with ease now face longer fundraising cycles, stricter due diligence requirements, and increased competition. In this environment, demonstrating strong performance isn’t enough. To stand out, investment managers must understand what investors value most, identify areas for improvement, and refine their approach accordingly.
Investor feedback studies provide a structured way to gather these insights. Managers who have worked with Ferguson Partners on these studies describe the final report as "having all the answers to the test"—eliminating guesswork and allowing firms to address investor concerns directly. This targeted approach helps firms optimize their capital-raising strategies and strengthen investor relationships.
Best Practices for Collecting Investor Feedback
Many firms try to gauge investor sentiment through casual conversations or anecdotal feedback. While these discussions can be insightful, they often lack structure, consistency, and impartiality, making it difficult to drive meaningful change. A more effective approach is a structured investor feedback study conducted by an independent third party, to provide a clear, unbiased assessment of market perceptions.
A well-designed investor feedback study gathers input from a broad range of stakeholders—including long-time investors, new investors, former investors, and even those familiar with the firm but not currently invested. To gain a full picture, the study should also include a mix of investor types, such as public and corporate pension funds, sovereign wealth funds, endowments, etc. This diversity ensures a comprehensive analysis of how the market perceives the firm and its investment offerings.
Investor feedback studies uncover insights that shape investor decision-making. These findings help real estate investment managers understand what matters most to investors and refine their approach to capital raising.
1. What Investors Value Beyond Performance
Strong returns are essential, but they aren’t the only factor influencing investor commitments. Investors also prioritize:
- Transparency and communication – Consistent, candid updates are highly valued, especially during times of market uncertainty.
- Alignment of interests – Fee structures, GP commitments, and governance frameworks play a significant role in building investor confidence.
- Strategic differentiation – Investors want a clear understanding of what sets a manager apart, whether it’s deal sourcing, operational expertise, or sector specialization.
2. Optimizing Investor Engagement
Investor feedback studies reveal whether investment managers are meeting investor expectations in their relationships. Insights can highlight gaps in:
- Face-to-face interactions – Are there enough personal touchpoints throughout the relationship?
- Communication formats – Do investors prefer in-person meetings, virtual updates, or a mix of both?
- Update frequency – Are investors receiving timely and relevant information?
Understanding these preferences helps managers strategically allocate resources to improve engagement and build stronger investor relationships.
3. Understanding Why Investors Decline to Recommit
When investors choose not to reinvest, the reasons often go beyond performance. Common factors include:
- Portfolio strategy shifts – Some investors adjust their allocations away from real estate or specific property types.
- Concerns over firm scalability – Rapid growth can raise concerns about whether performance and focus will be maintained.
- Leadership turnover – Changes in key personnel can create uncertainty and impact investor confidence.
While some of these challenges are beyond a manager’s control, investor feedback studies help identify areas for improvement to enhance investor retention.
4. How the Market Perceives Your Brand
Investor feedback also provides insight into how a firm is positioned relative to its peers. Is the firm seen as a specialist, a steady performer, or struggling to define its identity? Understanding these perceptions allows managers to refine their market positioning, messaging, and overall strategy to stand out in a competitive landscape.
From Insights to Action
Investor feedback studies aren’t just about collecting data—they provide a foundation for strategic improvements. These insights have helped firms:
- Refine investor messaging to better align with LP priorities.
- Enhance engagement strategies through targeted investor outreach.
- Strengthen transparency via improved reporting and governance practices.
- Clarify strategic differentiators to stand out in an increasingly competitive market.
The Advantage of a Third-Party Perspective
Firms conducting investor feedback studies internally may face bias and limited transparency—investors might hesitate to provide fully candid responses. Engaging an independent third party fosters open, honest dialogue and delivers actionable insights.
Investors often express appreciation for the opportunity to provide feedback, as it demonstrates that the manager values their input and is committed to continuous improvement. Additionally, Ferguson Partners' deep industry knowledge allows us to contextualize findings, identify best practices, and provide benchmarking insights.
Gaining a Competitive Edge
The capital-raising landscape is evolving. Firms that actively listen to investors, adapt to feedback, and refine their approach will be best positioned for long-term success. Investor feedback studies provide the strategic intelligence necessary to strengthen relationships, enhance engagement, and optimize fundraising efforts.
Looking to enhance your investor relationships and capital-raising strategy? Our team is ready to assist.
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*Ferguson Partners 2024 Fundraising – Year in Review