Guest Feature

Great Communication is Crucial in Baseball and in Investing

By Jeff Wurtz, Chief Financial Officer

Jeff Wurtz

October baseball was alive and well in San Diego. The Padres made the playoffs in a full season for the first time since 2006 and played at home in front of fans for the first time since 2006. (Sadly, the 2020 playoffs took place in front of cardboard cutouts). As a self-proclaimed baseball nerd, I watched a lot of games this year. But even the casual fan who only tuned in for a couple of playoff games would have noticed something different this year. 2022 will be known in baseball history as the year of the PitchCom.

PitchCom is a device that teams started using this year so catchers can transmit calls to pitchers instead of giving visual signs. The set-up is straightforward. Instead of the usual signs (one finger down for fastball, two for curveball, etc.), the catcher presses buttons on his wristband to communicate pitch type and location, which the pitcher hears through a receiver in his hat. Teams were able to tailor the messaging to their specific players, including varying between English, Spanish, Japanese and Korean. (For some humor, you can look up some customized messages catchers programed into their PitchComs).

As crucial as good communication is between a pitcher and a catcher, it may be even more essential between a fund sponsor and its investors. In general, good investor communication helps establish relationships and fosters a partnership environment. It educates and informs and elevates the investor’s knowledge level, so they are a more astute investor.

At Pathfinder, we view our investors as our partners. This partnership is built on and sustained by effective communications. As co-partners, we make a conscious effort to understand an investor’s perspective. We share information we would want to know, and in a way we would want it conveyed to us, if our positions were reversed. We provide timely and regular communications and when the news isn’t good, we put it up front.

Effective communication is a North Star – founded on a set of principles and continually evolving and improved upon, as opposed to a finish line to be reached. While organizations constantly review and evaluate their investor communication efforts, there are a few things that should be constant in their approach. Their three North Star “Be’s.”

Be Consistent

Use apples-to-apples comparisons. Sometimes, metrics shared by an organization vary from one period to the next, making it difficult for investors to accurately gauge performance. Absolute rents, expressed in dollars, aren’t that meaningful unless they’re followed with period-over–period rent growth percentage. Similarly, it’s not sufficient to disclose the amount of the bank loan on a property; we also want to share the key terms (fixed-rate or variable-rate, interest rate, remaining loan term, etc.). Ensuring that the same metrics are used consistently, and the information is comprehensive enables investors to better understand trends and generate trust.

At Pathfinder, we provide detailed quarterly reports for each of our funds outlining the status and performance of each fund property. Included in our reporting, we share investment acquisition cost, debt levels, and fair values, along with property occupancy rates and status of unit renovations (percentage of total units which have been renovated and magnitude of renovation premiums). As noted above, we share these metrics each quarter so investors can easily track progress and hold us accountable to the original business plans.

Be Transparent

Former HP CEO Meg Whitman says her favorite short motto is “Run to the fire.” She figures if you’ve got a tough message to deliver, don’t shrink from it. Address it head on, with a frank assessment of the issue, the reasons behind it, and what’s being done to address it.

An effective communication strategy includes sharing the positives and the negatives with investors. Transparency is critical, and it’s important to be realistic. If it’s going to be three steps forward, and two steps back, go ahead and say so. This year, for example, interest rates have risen dramatically. Fortunately, most of our property loans were structured over a year ago and the vast majority are fixed-rate loans. We do have a few variable-rate loans on non-stabilized properties, and we report on these loans and the new, higher rates, to our investors.

As part of our efforts to be transparent, we audit each of our funds annually and share those audit reports with investors. Additionally, we re-value fund portfolio quarterly and report investor values to advisors and custodians. We also created the Pathfinder investor portal to provide investors with direct access, 24/7, to their Pathfinder investment details (contributions, distributions, values, etc.) as well as historical fund reporting and tax documents, all found in a single, secure location.

Be Clear

Former N.Y. Yankees manager Casey Stengel famously said, “I’ll give you a definite maybe.” Too often, investor communication resembles a word salad rather than a crisp, clear message. Messag es are filled with abbreviations, acronyms, jargon and confusing phrases like “notwithstanding to the contrary.”

SEC Chairman Arthur Levitt championed “plain English” writing in the 1990s. He argued that simpler financial disclosures would help investors make more informed decisions. Warren Buffet wrote in the introduction to the SEC’s “Plain English Handbook”, published in 1998, describing how he writes his famous shareholder letters. “I pretend that I’m talking to my sisters,” he said. Meaning that he aims to make the letter understandable as well as informative, free of jargon.

What a great test. A trap companies can fall into is to assume too much knowledge by their target audience. We have found that investors welcome an honest, straightforward story – they don’t want to be sold to, and they don’t want to be spun to.

Final Thought: Be Quick to Respond

First, be quick to respond to changes in the market. The best companies quickly assess the impact of any potential changes in the market and proactively communicate it to their stakeholders. Having been founded in 2006 anticipation of the Great Financial Crisis, successfully navigated the Covid pandemic and now adjusting in the face of economic uncertainty, we feel strongly about explaining the context behind the changes we’re seeing, having a strong point of view about what to do about them and being an open book with our investors.

Second, be quick to respond to investor inquiries. We take great pride in knowing that many of our investors are invested in multiple Pathfinder funds and have referred friends and family members as investors. We understand that with each investment, they considered their experience with Pathfinder and chose us over other investment alternatives. We are grateful for each of these investment decisions and do not take them for granted. We view each investor inquiry as an opportunity to strengthen an existing relationship and to become better co-partners together.

Follow Your North Star

Film composer John Powell said, “communication works for those who work at it.” As we are purposeful in our efforts to Be Consistent, Be Transparent, and Be Clear, we can better connect with our investors and strengthen our relationships. It’s important work and work that is worth doing right. While not all organizations are perfect in their communication efforts, they should strive to be. We’ll let our North Star and principles guide us.

Jeff Wurtz is Chief Financial Officer of Pathfinder Partners. Prior to joining Pathfinder in 2012, Jeff worked as a CPA focused on real estate and technology clients. He can be reached at

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