Request for proposals (RFPs), as part of your distribution strategy, are an opportunity to impact the presence you want to project to the marketplace. The RFP process in the institutional investment space has changed drastically over the past five years. There are now more RFPs than ever, longer, more in-depth RFPs and improved technology for handling and processing RFPs. Along with these changes, “the majority of RFPs today are invite only” which means you must pass initial screens in order to make it onto a shortlist, as mentioned in a recent FundFire webcast. Facing these changes can be daunting; however, following a few simple steps can improve your RFP process.
Step 1: Ensure all your data is in databases as soon as possible
Many RFPs have become invite only because investors are running screens or “shadow searches” in databases to filter out managers who do not meet their requirements before issuing the RFP to a designated list. This makes the RFP process easier for them; however, you need to ensure you pass those screens by having all your data in those databases in a timely manner. Ensuring all your data is in a database is one of the easiest ways to increase your chances of passing screens.
Additionally, if an investor is looking at your company profile within a database and they notice that you are missing large amounts of data, they may not bother to reach out to you for that data. Many investors have come to expect database usage as standard, so when they see a manager without data, that may raise a red flag and you may not be invited to the RFP process.
Step 2: Customize and differentiate your responses
In order to handle shorter RFP deadlines and more complex RFPs, it is important to ensure your RFP team utilizes every resource within your company. Your investor relations team may have knowledge or experiences with the investor who issued the RFP you are working on. By using them as a resource, you can customize answers.
Along with using internal resources to customize your answers, outside resources such as publicly available competitive intelligence can be used to make your answers unique. By utilizing this type of outside intelligence, you can make sure you aren’t saying the same thing as competitors and better differentiate your responses.
Step 3: Embrace technology and automation
As competition grows around RFPs, the future of succeeding in RFPs may lie in embracing technology and automation. Many RFP issuers have begun to use technology which lets them compare RFP submissions side-by-side and narrow down which managers they would like to invite to a finals presentation faster. Since issuers are adopting new technology, it is important for RFP respondents to begin to use technology themselves – for example, by automating your database population efforts. By using technology to help populate data points in all major databases, you can spend more time customizing qualitative data for RFPs.