How investor demands and growing data sets are brewing a perfect storm for GPs
by Andrés Ramos, Content Marketing Specialist – eVestment Private Markets
Data requests from investors are nothing new for private fund managers. Quarter-end requests for completed templates and ad hoc requests are all part of the job for finance and investor relations teams at GPs across the industry.
For most GPs however, addressing these requests involves spending a lot of time in Excel and accounting systems pulling data or creating one-off analyses for investors. In 2018, eVestment Private Markets found that 72% of requests to GPs followed no standardized template. This approach is neither strategic nor systematic, and it certainly does not scale.
The gathering storm: growing funds & increasing data needs
As funds grow larger both in terms of the number of investments made and the size of their investor bases, the resources allocated to finance and IR teams are unlikely to be growing at the same rate, if at all.
EY’s 2020 Global Private Equity Survey found that asset growth was a top priority for 71% of private equity CFOs while enhancing back-office processes and technology and enhancing investor reporting were a top priority for only 43% and 23% of CFOs respectively (Percentages total more than 100% because survey respondents were allowed to select multiple top priorities.).
While these teams that service investors’ needs remain under-equipped, the data demands of those investors are only growing more complex and customized. A July 2020 survey from Intertrust found that 80% of LPs are requesting performance of underlying assets in each portfolio and more than half are demanding fee structures and risk exposures.
Without adapting their processes to address the growing needs of their investors, finance and IR teams will be overwhelmed by the deluge of data requests. This failure to adapt puts GPs at greater risk for investor churn when raising a new fund. If an investor is not receiving the data they need from their fund managers, they may move on others who are better equipped to meet those needs.
Weather the deluge of data requests with a streamlined reporting process
To address the growing data demands from investors, GPs need a systematic tool that can generate repeatable reports with accurate and up-to-date data with the click of a button. The Excel Report Builder module in eVestment’s TopQ platform is that tool.
TopQ is a performance data management and analytics tool for GPs, helping them to improve accuracy and efficiency in the calculation and analysis of their performance data. The Excel Report Builder’s flexible reporting functionality allows IR teams to configure and save custom Excel reports of portfolio performance data that mirror templates from their investors. Once configured, users can produce Excel-based reports in seconds with the specified data is then populated in a clean, client-ready format.