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Expectation vs. Reality: Three reasons why running portfolio analytics on spreadsheets fails to meet GP’s expectations

From years of working with GPs and LPs across the private markets, we’ve had a behind the scenes look of many tech stacks and processes. While most have implemented specific software for fund accounting or CRM capabilities, portfolio performance data management and analysis is still left to non-specific tools: spreadsheets or generic business intelligence software.

We often see this approach accepted due to the “perceived benefits” of spreadsheet-based processes: it’s “good value, flexible and scalable.”

While these are certainly key benefits required in a tool for private fund performance analysis, the expectations of achieving these using spreadsheets never actually translates into a reality.

What’s more is that the volume, complexity and value of the data that is often confined to spreadsheet-based processes is only increasing: in a shifting macro landscape, LPs are using deal-level return attribution to help guide their decisions and pressing more questions on GPs. To the same extent, GPs can harness their data to guide future fund strategy, uncover new insights on the portfolio and proactively use it to evidence valuation creation skills and build investor trust and confidence.

Within an ever-evolving marketplace, GPs can no longer rely on yesterday’s technology to help them today.

Struggling to turn potential benefits of a spreadsheet-based process into the reality is inherently challenging. Dive into the structural reasons of these challenges and how our portfolio intelligence tool, TopQ, can help you realize the operational gains you need to stay competitive.

Three Reasons Why Spreadsheet-based Analytics Expectations Reality

EXPECTATION #1

Flexibility

You can store a huge amount of granular data and your organization can choose exactly how to build your templates and models for use.

THE REALITY

Spreadsheets are Manual & Error-Prone

Without being purpose-built for dealing with private fund performance calculations it is a hugely manual effort to build and update analysis, which is neither efficient or protected against human error. Each team member has their own way of working and no consistent process is defined. Questions arise over quality and confidence in the output without a truly repeatable process and when one of the team leaves, the template has to be re-built.

You store years of historic track record performance data in separate files, each with hundreds of rows of data that becomes unwieldy and cumbersome to manage and actually draw insights from. There is no ability to easily view data across time periods and drawing insights or responding to requests takes hours of manual labor that could be spent on higher-value tasks.

HOW TopQ DELIVERS ON THE EXPECTATION

A Single Source of Truth with Fully Configurable Analytics

TopQ combines the best of both worlds: an automated performance calculation engine to provide a truly standardized and repeatable process, alongside a suite of fully configurable and customizable analysis tools built for the intricacies of the private markets.

Link historic performance data to easily view changes in the portfolio over time, and create a single source of truth across your firm.

Analyze deals, funds and portfolios with incredible efficiency using a wide range of tools. Gain greater confidence on the integrity of the underlying data being safe from corruption or unintended manipulation.

EXPECTATION #2

Accessible

Everyone in your organization can have access to it, theoretically enabling everyone to make use of the data and insights – whether deal teams, finance & operations, or investor relations.

THE REALITY

Spreadsheets are Restrictive

The complexity of the level of analysis of private fund performance means an organization usually has a small handful of Excel experts that are relied on for the work. Without knowing how the analysis has been built, and for fear of users inadvertently changing data, the sheets are now locked down. Leadership or Investor Relations have to route requests through a dedicated function to service requests, and can’t self-serve or quickly draw insights, creating inefficiencies and burden on specific teams.

HOW TopQ DELIVERS ON THE EXPECTATION

Intuitive Data Visualization and User-Friendly Tools

A full suite of purpose-built analytics are available out-of-the-box, all designed within an intuitive and easy-to-use interface. No longer are insights only available to, or owned by, a small subset of “power users” within a firm.

Finance teams can be confident in opening access to portfolio data to other teams to self-serve without the risk of manual data manipulation impacting the accuracy of output. Teams can now be more responsvie to internal or external stakeholder requests for information on specific deals or subsets of the portfolio.

Detailed audit trails of who has accessed performance data, when, and for how long, supports your data governance efforts and provides peace of mind that sensitive information is only being seen by the right people.

EXPECTATION #3

Cost Effective

It’s a tool you already have at your disposal and so will be a cost effective way to produce calculations and analysis.

THE REALITY

Spreadsheets have Hidden Costs

A growing number of data points and increasing complexity of your portfolio requires technical Subject Matter Experts dedicated to managing the process. Other users attempting to navigate the spreadsheets do so inefficiently, eating into time that can be spent on other high-priority tasks or increasing the time it takes to service internal or client requests. Any new analytics have to be developed in-house and risks lagging behind industry trends, or being caught off-guard by investor requests for metrics not currently being produced.

Building an internal system doesn’t allow for easy integration with other external platforms or data sources and limits the potential of leveraging your own data.

HOW TopQ DELIVERS ON THE EXPECTATION

Return-on-Investment

Gain from the “wisdom of the crowd” and take advantage of new analytics and technology developed based on other clients’ feedback, and never have to worry about managing in-house technology or development teams. Quickly recoup the cost of your investment and generate “return” through the significant amount of time saved and new insights gained.

Benefit from our partnerships with Preqin & PitchBook to facilitate quartile benchmarking on your funds within the platform. Gain additional context to your performance using our Public Market Equivalent module to compare returns against listed indices, with all leading calculation methodologies included and a feed of over 200,000 available public market indices to choose from.

Use our dedicated, industry-leading client success team for training and data management assistance to help expand your team’s own resources and realize even more operational efficiencies.

See TopQ in Action

Watch our <10 minute showcase to learn more about why GPs are moving beyond Excel and to see three of the key use cases for TopQ in action.

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