A 60% majority of Limited Partner (LP) respondents surveyed in the Brackendale Private Equity Technology LP Sentiment Survey H1 2022, produced in association with AssetMetrix, stated that they would be more likely to consider allocating to a fund, if the fund manager had a tech-enabled partner to outsource their middle and back-office activities to.
The key challenges that LP investors face include finding the ability to efficiently aggregate data, provisions of ESG metrics, and the specific reporting requirements. These requirements include ESG and co-investment specific reporting, according to comments made by surveyed LPs.
A slim 17% of LP respondents stated that they receive responses to ad-hoc requests within a day of the request. Some 68% of respondents also stated that this time is at least partially reliant on manual processes within their GP/LP relationship. This disconnect between LP investor and GP investment managers shows that GPs continue to struggle to handle, analyse, and emit data without external support.
When asked about how they planned to manage pressure to fulfil stringent reporting requirements, 66% of LPs placed the onus on their GP counterparts. A small contingent of LPs, some 17%, are committed to allocating more resources in-house to deal with requirements across their private capital portfolio.
When surveyed on technology platforms that would be of use to monitor investments, 77% of respondents cited the ability to view an entire portfolio with a consistent and clear view of investments. Some 69% also found the ability to slice, dice, and filter data to be of use. Other aspects stated as useful include access to customised reporting portals at all times of the day, and access to a single point of truth for all relevant data.
Fay Margo, CEO, Brackendale Consulting: “Technology is becoming omnipresent in the modern private equity world, and it is encouraging to see LPs becoming aware of the role that technology plays within their investment processes. However, GPs still lag slightly behind in the adoption of technological tools, leaving them with some work to do.”
Gilles Pelosato, CRO, Assetmetrix: “As one of Europe’s leading providers of technological expertise in private markets, Assetmetrix is pleased to see LPs placing importance on the technological tools of their GP counterparts. We hope to see the technological gap between GP and LP continue to close as the adoption of tools continues.”