Businesses don't make businesses better. People do.

May 22, 2024

Since its first partnership, the team at LKCM Headwater Investments has understood that businesses don’t make businesses better, people do.

Fast forward to 2024, the firm has raised 6 partnerships plus co-investment partnerships totaling $2.6 billion of capital commitments and has proven itself to be much more than just a capital provider. LKCM Headwater’s core philosophy is to add value through the expertise of their powerful ecosystem of hands-on, strategic investors to transform businesses to be more sustainable, higher cash flowing, and more resilient over the long term. To do so, building strong relationships with their investors is critical.

“Our focus is alignment and partnering with portfolio company management teams to provide relationships, resources and capital to scale and build businesses that best serve their customers.”  says Kim Carter, Partner and CFO at LKCM Headwater. “Our limited partners are very engaged in our efforts. They source new opportunities, sit on boards, serve as operating partners, and bring expertise from having operated and built their own business. I can pick up the phone and call our limited partners with relevant domain expertise to work with our team to help unlock value across our businesses.”

Scale without sacrificing a personalized approach

For Kim and her team, Passthrough has allowed them to maintain LKCM Headwater’s approach of customized communication with their LPs, and enabled the firm to scale its operations without adding more people.

“What Passthrough unlocked for us in digitizing our onboarding process really parallels what we do with our operating companies,” says Kim. “We look for businesses where we believe we have a competitive edge and can create more value. Founding LKCM Headwater Partner, Bryan King believes in an operational, roll-up your sleeves approach, that often requires an investment in technology, software and systems that creates a J-curve to get operating leverage and a step-change to a more profitable, scalable business.”  

Continuing to tailor the onboarding process through individualized messaging and customized ways of sharing information was key for LKCM Headwater to maintain and build personal connections with investors. The Passthrough team had the same collaborative approach and was always willing to listen and quick to test and implement changes that allowed us to best serve our clients. She attributed a huge part to the ease and success of their raise to Ben and the Passthrough team.”There was always a response back from the team saying, ‘Yes, we can do this,’ or, ‘We’ve seen this before. And while you’re suggesting this, I would also recommend you consider options a, b and c.”

A two-way collaboration

Ben Doran, Co-Founder and COO at Passthrough, says feedback from customers like LKCM is a crucial part of constantly improving the product. “We always want to understand how customers are using the platform in order to make it even more useful for them,” he says. “By getting a real-time look into how Kim and her team wanted to work with their investors, we know exactly what we needed to build to get them there, which means the next customer gets that benefit too.”

Security was also a critical factor during the diligence process led by Sarah Topham and the IT team at LKCM. “We needed to give our limited partners the confidence their data is protected,” she says. “Passthrough provides a way to login with a secure link without having to maintain passwords that could be hacked. This was one of the benefits that our IT and security teams identified when they did their diligence, and one that our limited partners really appreciated. We collect and store very sensitive data and confidence that Passthrough took security and privacy seriously was imperative.”

LKCM’s investors were the ultimate litmus test

Ultimately, the success of implementing any investor-facing solution comes down to what LKCM Headwater limited partners think of it.

“Our limited partners were impressed,” says Kim. “Passthrough simplified and made the process easier for them. The ability to start and stop filling their sub documents as they needed and having all their information saved for when they could come back to them, or sharing their documents with additional family members, CPAs or additional users on a single platform was something most of them haven’t seen before. It put control in their hands in a way that even those who were less tech savvy could easily benefit.”

Find out how you can scale your IR operations without losing a personal touch. Speak to one of our team today.


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