In down[ward] markets, communication becomes part of the investment process. Managers who handle these moments well preserve relationships, maintain allocations, and position themselves for recovery.

The following article comes from Abbas Hashmi (pictured below), ABFP, who is program leader at Columbia Business School’s Family Enterprises and Wealth program. He is also a regular contributor to Family Wealth Report (see previous examples of his writing here and here). His article is aimed at the task that investors have when parsing financial results – as is happening right now as firms, such as banks, issue their first-quarter 2026 figures. When geopolitics and macroeconomic stresses are also in play, the task of assessing results becomes even more important. 

The editors are pleased to share these ideas; the customary editorial disclaimers apply to views of guest writers. To comment and get involved in conversations, email tom.burroughes@wealthbriefing.com and amanda.cheesley@clearviewpublishing.com

Abbas Hashmi

Investor relations faces its hardest moments when results fall short. Drawdowns, delayed distributions, redemption gates, and falling net asset values trigger reactions shaped more by perception than by data.

Behavioral finance helps explain this. Loss aversion sharpens the impact of negative news. Recency bias pulls attention to the latest decline. Uncertainty reduces the ability to process detail. Under stress, investors look for simple signals of control, clarity, and intent. At that point, investor relations either steadies the mandate or speeds up redemptions.

Timing comes first. Investors should hear difficult news early and directly. Delay raises perceived risk. When communication lags, investors assume that the situation is worse than reported. Early communication sets expectations and limits speculation.

Structure comes next. Each update should follow a clear sequence.

Start with the facts. State what has happened. In a private credit fund, this may mean saying that distributions are pausing due to slower borrower repayments. In a semi-liquid real asset vehicle, it may mean confirming that a redemption gate is in place after requests exceed liquidity. If NAV has declined in a growth strategy, quantify the change.

Then explain causality. Link outcomes to observable drivers such as market liquidity, borrower stress, refinancing conditions, or geopolitical constraints. A direct lending portfolio may be seeing delayed payments due to tighter credit markets. Keep the explanation tied to data and process.

Then define control. Specify what is within the manager’s authority and what actions are being taken. This may include tighter underwriting, closer borrower engagement, covenant enforcement, or selective exits. In a real estate income strategy, it may mean slowing asset sales and focusing on cash flow. These steps give investors a sense of order.

Address the path forward. Provide timelines, milestones, and decision points. If distributions are paused, explain when they may resume. If a gate is in place, define how and when it will be reviewed.

Close with visibility. Commit to a reporting cadence. Regular updates reduce uncertainty. Language matters. Keep the tone neutral. Avoid excess detail. Use direct statements. Precision builds trust.

Neuroscience sharpens delivery. Manage cognitive load. Under stress, investors process less. Keep communication clear and segmented so key points are absorbed. Framing shapes interpretation. Present absolute numbers with percentages. Place declines in a broader time frame. A 12 per cent NAV drop in a growth strategy reads differently when seen over a multi-year cycle.

Prediction error drives reaction. When outcomes diverge from expectations, responses intensify. Reset expectations early. Use ranges instead of fixed targets. Signals of certainty matter. Consistent language, structure, and timing create stability.

Tone carries weight. A calm, measured approach lowers perceived risk. Urgency increases it.

Memory is selective. Investors recall the opening and the close. Begin with the core fact. End with the forward plan and next update.

Certain situations need added care: When distributions are paused, investors may see a break in the contract. In a private credit fund, explain how retaining cash supports borrower stability and long term recovery. 

When redemption gates are introduced, concerns center on liquidity and fairness. In a semi liquid vehicle, explain how the gate prevents forced asset sales and protects all investors. When NAV declines, avoid defending valuations. In a growth portfolio, show how values are set and what assumptions have changed.

When the fund is losing money, silence creates risk. In a distressed strategy, separate market-driven losses from asset-specific issues and explain what is being done. Consistency builds credibility. Investors do not expect perfect results. They expect clear and steady communication.

There is also a social element. Investors watch each other. If one exits, others reassess. Equip key investors with clear information so that they can interpret the situation in their own circles.

Investor relations is not only about reporting. It is managing perception in uncertain conditions.

In down[ward] markets, communication becomes part of the investment process. Managers who handle these moments well preserve relationships, maintain allocations, and position themselves for recovery.

About the author

Abbas Hashmi, ABFP, is program leader at Columbia Business School’s Family Enterprises and Wealth program and a global capital formation strategist focused on private markets, family offices, and cross-border investment. Hashmi holds the Accredited Behavioral Finance Professional designation, reflecting formal training in how psychological factors shape financial decision making. His work sits at the intersection of neuroscience and investor relations, focusing on how investors process risk, uncertainty, and loss in real time.

He previously held senior roles at Goldman Sachs and AIG, where he led initiatives across wealth management, institutional distribution, and growth strategy. He also led the largest and oldest community of single-family offices through the Institute for Private Investors, working closely with some of the world’s most established family enterprises.

Hashmi has been appointed Honorary co-chair of US Trade Missions to Saudi Arabia, Bahrain, and the UAE, supporting bilateral capital dialogue between global investors and the Gulf region. He is also co-founder of Superpower. He is based in New York and works with family offices, wealth managers, and institutional investors across the US, the Middle East, and Asia.