POINT OF VIEW
PRIVATE EQUITY
REPORTING REVOLUTION: PRIVATE EQUITY
DATA MOVES BEYOND THE PDF
Private Equity
Whether coming from investors, regulators or internal
stakeholders, the pressure is on for private equity general
partners (GPs) to enhance their reporting capabilities.
But with the days of paper statements already long behind
them, and online portals now the norm, how can GPs take
data to the next level – past even the trusted PDF?
As far as reporting to limited partners (LPs) is concerned,
most GPs tend to observe the same hierarchy of priorities.
First come the essentials: fundamentally, every GP has the
responsibility to deliver financials to its investors on at least
a quarterly basis, and will also frequently need to issue capital
calls and distribution notices. Today, the standard medium
for these communications will be an online portal for the
sharing of and access to documentation: a solution which,
at the very least, must be compliant, stable and secure.
Beyond meeting these basic requirements, portal technology
has already given GPs the opportunity to improve and add
value to their reporting processes. In our digital age, firms
might, for example, start looking at how to increase
efficiency and reduce some of the risks inherent in investor
reporting. This could be a case of automating the creation
of reports or incorporating investor accounting and
customer relationship management capabilities into their
portal. GPs may also see the portal’s potential for building
their brand, using its look, feel and layout to reflect their
distinctive identity. But even these innovations are only the
start of what’s possible for private equity reporting.
Private equity reporting comes of age
As technology itself has evolved, so GPs have increasingly
explored its capacity to enhance reporting. In the last 20
years, we have seen paper statements and reports replaced
first by email and then by more secure solutions, culminating
in the first generation of investor portals in the early 2000s.
Now, portals themselves are evolving fast – at a time when,
in fact, reporting is more important than ever.
The global financial crisis placed front and center the need
for transparency in reporting. When times were good and
returns healthy, investors were less concerned about the
details of their portfolio and the figures underlying its
performance. In today’s more competitive markets, investors
are increasingly active. And with LPs asking more questions
about their investments, the ability to share data has become
fundamental to a healthy working relationship between
GP and LP.
For GPs, however, the reporting challenge doesn’t begin
and end with LPs. In other words, enhanced reporting can
meet a range of additional requirements for the modern
private equity firm, both internal and external. In the current
investment climate, firms face demands for information
from not only investors but also internal stakeholders, who
need to understand investment performance in ever greater
detail, including the exact source of their returns. And
externally, of course, auditors and a growing number of
regulatory bodies are making easy access to a wide range
of data all the more critical.
With many varying reporting requirements now applying
to different jurisdictions, there will be many overlaps in the
data needed to fulfill all these reporting needs. So, a highly
structured approach to data management is becoming
essential for effective reporting.
JONATHAN BROCH, HEAD OF PRE-SALES AND
PRODUCT STRATEGY, FIS’ PRIVATE EQUITY BUSINESS
Private Equity
The interactive information generation
In a perfect storm of reporting challenges for GPs, the latest
generation of reporting portals provides an ideal response
– by offering not only accessibility but also interactivity.
Rather than just storing static PDFs, an interactive reporting
portal gives investors and internal stakeholders the
opportunity to access real-time data on demand, then slice
and dice it as they see fit, to the level of detail they require.
This self-service approach to sharing information both frees
up LPs to get information as and when they need it, and
makes the reporting process more efficient for GPs.
In turn, GPs can also use their portal as something of a
relationship management tool, to monitor their clients’
concerns and better meet their needs. As private equity
matures as an asset class, interactive reporting therefore
has the potential to strengthen relationships between GPs
and LPs, showing a willingness on the part of the former
to invest in its infrastructure and offer a differentiated
client experience.
Notably, recent research shows that while 70 percent of
GPs believe it is important to provide LPs with interactive
reporting, only 23 percent currently offer this capability
to investors1. But the technology is both well developed
and widely available – and GPs on the whole are well
placed to take advantage of it. Most have already made
data management a high priority, structuring investor and
transactional data for rapid, easy access. Their efforts in
this regard make the interactive portal not a lofty ambition
but a logical next step – to new levels, if not a higher state,
of reporting, analysis and service.
SOURCE 1: TABB GROUP – TRANSFORMING DATA INTO INTELLIGENCE, JANUARY 2014
When times were good and
returns healthy, investors
were less concerned about
the details of their portfolio
and the figures underlying
its performance.
About FIS’ Investran
FIS’ Investran is an integrated application suite that
automates front-, middle- and back-office processes
for private equity and alternative investment firms.
Investran helps improve business efficiencies to facilitate
collaboration, support deal flow and automate accounting.
Firms rely on Investran’s integrated capabilities to help
meet their needs in the entire investment life cycle, including
relationship management, reporting, monitoring,
accounting, fund raising and deal pipeline management.
About FIS
FIS is a global leader in financial services technology,
with a focus on retail and institutional banking, payments,
asset and wealth management, risk and compliance,
consulting and outsourcing solutions. Through the depth
and breadth of our solutions portfolio, global capabilities
and domain expertise, FIS serves more than 20,000 clients
in over 130 countries. Headquartered in Jacksonville,
Florida, FIS employs more than 55,000 people worldwide
and holds leadership positions in payment processing,
financial software and banking solutions. Providing software,
services and outsourcing of the technology that empowers
the financial world, FIS is a Fortune 500 company and is
a member of Standard & Poor’s 500® Index. For more
information about FIS, visit www.fisglobal.com
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