Why Funds Should Embrace Digitally-Driven Solutions.
The beginning of the year is an ideal time to analyze your fund’s performance and identify the biggest obstacles it’s facing. After all, every challenge is also an opportunity to improve.
According to EY’s “3rd Annual Global Private Equity Fund and Investor Survey,” finance executives and investors see reporting as one of the biggest obstacles they need to overcome in 2017. More specifically, that their reporting procedures and systems cannot handle the volume of data collection and analysis required in private equity.
Traditionally, reporting practices primarily focused around the investor and management. But because of the new legislative initiatives implemented following the 2007-08 crash, fund managers now consider limited partner reporting to be equally aligned with investor and management in terms of importance to the fund.
In light of this, funds have been forced to look at restructuring their reporting frameworks and internal processes.
As indicated by 63% of EY respondents, this reporting emphasis also means that success for private equity funds is effectively all about data — managing it, sourcing it and analyzing it.
“Data is the obstacle. We’re a sophisticated industry with technology options that I feel lag behind other financial sectors. We wrestle with a current patchwork of technology solutions.”
- Western Europe
It’s well understood that private equity firms have been slow to embrace the digital transformation. Less than half are delivering financial and tax information electronically, while more than 75% of investors would prefer to move past paper reports.
To meet investors’ increasing demand for digital access to data, we believe that funds should consider embracing digitally-driven solutions.
Software that delivers enhanced, real-time, data collection and reporting, along with portfolio analysis.
We’ve seen funds who take advantage of such systems harness their data, quickly align with the industry’s changing landscape and thrive. We’ve also seen it drive a fund’s sales, marketing and client communication efforts — positively impacting long-term growth and profitability.