There are obvious benefits to this level of reporting, but piling on more data and reporting requirements puts a strain on the limited resources of both GP and LP operating teams. Fulfilling the basic recommended reporting items outlined by the ILPA offers enough challenges and administrative work for operations teams. Raising this level of transparency requires technology and automation.
The Case for Data Aggregation and Reporting Software
Given the administrative burden of managing too many GP relationships, some of the largest LPs are reducing the number of GP relationships they maintain. According to a 2012 survey conducted by Preqin, approximately 21% of LPs surveyed expected to reduce the number of GP relationships they maintain due to increased administrative burdens and allocating more capital to high-performing funds.
This begs the question: how do you strengthen your alignment with your LP’s while decreasing their administrative burden?
Through a true software solution.
Realizing the Opportunity in New Technology
By reimagining the way you collect financial and operational data from portfolio companies you can ease the administrative burden for teams involved in reporting and analytics from, portfolio company to LP, and collect much more data.
Many existing reporting systems are rigid and require a major overhaul to add new data points like specific operational KPIs for each company in your portfolio. Chances are, your portfolio executives are tracking these KPIs internally. The information simply isn’t shared freely enough to inform GP’s and LP’s acting as a companies advisor.
